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Tuesday, January 26, 2016 Vol. 11 No. 110
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HE Philippine government now has an additional source of funds to jump-start or fast-track the implementation of public-private partnership (PPP) projects with the launch of a regional multidonor trust fund, dubbed as the Asia-Pacific Project Preparation Facility (AP3F), on Monday.
TALES FROM SERGIO BUMATAY III
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| TUESDAY, JANUARY 26, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana
A BRONCOS WIN
AN in-form Victoria Azarenka (below) breezes into the Australian Open quarterfinals at the expense of Barbaro Strycova. AP
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ELBOURNE, Australia—Victoria Azarenka couldn’t get off court quickly enough to check the score after reaching the Australian Open quarterfinals. To her elation, it was a Broncos win. The two-time Australian Open champion had just beaten Barbaro Strycova, 6-2, 6-4, in the fourth round on Monday—continuing a three-year sequence of wins against the Czech player that started in the second round in 2014 and included the third round last year—when she wanted to know the result of the American Football Conference title game. “Can somebody please tell me, did Broncos win?” she said, taking over her on-court TV interview. When she heard the Denver Broncos had beaten the New England Patriots, 20-18, she shouted “Yesss!!”—stepping back and raising both arms, “I’m so happy now.” “I was so nervous the whole morning, I didn’t watch. I didn’t want to know the result,” she said. “As you can see I’m a crazy sports fanatic, so I understand you guys when you get all nervous and stuff, because I felt that.” Peyton Manning’s Broncos will face Cam Newton’s Carolina Panthers in the 50th Super Bowl. Azarenka has already shown some allegiance to Newton and the Panthers, doing her version of the “dab” in her victory celebrations.
Told the Panthers were well ahead of the Cardinals in the National Football Conference decider, Azarenka said, “Well then, it’s going to be my dream final, I can’t wait to see that.” Azarenka is coming off two injury-interrupted seasons, but is returning to the kind of form that took her to the No. 1-ranked and back-to-back Australian Open titles in 2012 and 2013. She won the Brisbane International leading into the first major of the season and dropped only five games in her first three rounds at Melbourne Park. Strycova, who beat third-ranked Garbine Muguruza in the third round, took six games off Azarenka. “She’s such a tough opponent. I’m just so happy I went through,” she said. “I played smart, I played aggressive, I took my opportunities and I really kept my composure.” Next up she faces No. 7 Angelique Kerber, who beat fellow German Annika Beck, 6-4, 6-0, in the preceding match on Rod Laver Arena. Kerber, who saved a match point in her first-round win over Misaki Doi, is into the quarterfinals for the first time in Australia. “Maybe it’s a good omen. But, yeah, I was in the first match, match-point down. I was with one foot in the plane back to Germany,” she said. Gael Monfils had a 7-5, 3-6, 6-3, 7-6 (4) win over Andrei Kuznetsov to reach the quarterfinals for the first time in 11 trips to Melbourne Park, thrilling the Margaret Court Arena crowd with his acrobatic tumbles and dives. He will play the winner of the later match
between fourth-seeded Stan Wawrinka, the French Open and 2014 Australian Open champion, and No. 13 Milos Raonic. In the night match, No. 2 Andy Murray, a four-time finalist at Melbourne Park, was set to face No. 16 Bernard Tomic. Novak Djokovic, meanwhile, was looking everywhere for answers, even in the crowd. The top player in tennis, who won 27 of a possible 28 matches in Grand Slam matches in 2015, had the number 100 in the unforced errors column after his 6-3, 6-7 (1), 6-4, 4-6, 6-3 win over Gilles Simon late on Sunday. The win secured his spot in the quarterfinals for the 27th consecutive major, equaling Jimmy Connors at No. 2 in that streak and trailing only Roger Federer’s record of 36. Yet Djokovic still thought it was a forgettable day. He was dissecting the match in an on-court interview on Sunday when a burst of laughter from the crowd caught his attention. “Sorry, everybody is laughing. I just want to hear, what did you say?” Djokovic said, looking into the stands. The answer came back loud and clear: “No more drop shots.” “OK, thanks buddy,” Djokovic deadpanned. “I hate to say, but you are absolutely right.” A handful of ill-advised and poorly executed backhand drop shots by Djokovic made up the most glaring of his unforced errors. “I don’t think I’ve had any number close to 100,” he said. “In terms of the level that I’ve played, it’s the match to forget for me.”
TIGHT FINISH IN DUBAI A
BU DHABI, United Arab Emirates— Rickie Fowler puffed his cheeks and shook his head. What looked like being a procession to the Abu Dhabi Championship title ended up being a squeeze for the American on Sunday. It needed two moments of inspiration in the final round to seal a one-shot victory— and spark more talk about Fowler’s place in golf’s current elite. Dressed in his trademark Sunday orange, Fowler rebounded from a double-bogey at No. 7, which helped trim his lead over a congested pack of challengers from four strokes to one, by chipping in from 30 yards for eagle from a bunker at No. 8. Then, at No. 17, Fowler holed a chip from just off the green for a birdie that shook off playing partner Thomas Pieters, the Belgian who emerged from the bunch to chase Fowler all the way down the stretch. “It was not how it was planned,” a smiling Fowler said of the tight finish, “but
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Henrik Stenson (67) tied for third. There was satisfaction for Fowler with claiming his fourth win worldwide in nine months, after victories at The Players Championship, the Scottish Open, and the Deutsche Bank Championship in 2015. This win will move him from No. 6 to No. 4 in the rankings, for a first-ever spot in the world’s top five. The so-called “Big Three” of Jordan Spieth, Jason Day and McIlroy may need to be enlarged. “I want to be part of the crew. It would be a pretty good foursome,” Fowler said. “I think I mentioned through the summer at some point, I said I was a sneaky fourth. We’ve got to take care of a major and then maybe I can join the crew.” The win was extra special for Fowler, considering Spieth (No. 1), McIlroy (No. 3) and Stenson (No. 5) were in the field—arguably the strongest the European Tour will have this year. Spieth tied for fifth—five shots behind Fowler—after a 68 and acknowledged after his final round that he was “beat up, mentally and physically,” having played in South Korea, China, Australia, Bahamas, Hawaii and now Abu Dhabi
the par-5 18th and found a greenside bunker with his approach. Pieters gave himself a putt for eagle, which he missed left by an inch. Fowler had two putts to win and he needed them both, with his winning effort from 2 feet. “I didn’t do much wrong today,” said the big-hitting Pieters, who moved to within one shot of Fowler with a birdie on No. 13 but only parred his way to the 18th. “Next time maybe some more putts drop, that’s it.” This is the first time Fowler has won during the first four months of a year. He has made a fashion statement this week by wearing high-top golf shoes and ankle-tight jogger pants, but he’s sent out a golfing message, too. “Nice to have the game where it’s at right now going into the season, instead of trying to work on things,” he said. “I’d say this is really the first time in my career I’ve had that.” It was another near miss for McIlroy, who adds a third place to his four runner-up finishes in Abu Dhabi at what is always his first event of each year. AP
ADB fund to jump-start PPP projects in Asia Pacific The $73-million AP3F, to be managed by Manila-based Asian Development Bank (ADB), covers project structuring, capacity-building and creation of PPP policy C A
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PIA’S MOMENT Miss Universe Pia Alonzo Wurtzbach waves to well-wishers taking photos with their mobile phones during her welcome parade on Monday. The country’s third Miss Universe arrived home on January 23. ALYSA SALEN
ROPERTY developer Megaworld Corp. expects rental income to grow 20 percent by the end of the year to about P11 billion with the completion of more office towers, malls and commercial centers. The projection placed the company’s leasing income this year at P9.16 billion, which is 29 percent higher than the P7.07 billion it achieved in 2014. The company’s rental income comes mostly from office and mall revenues. It will, however, start its hotel operations by the middle of this year with the opening of Belmont Hotel in Resorts World Manila in Pasay City. Hotel revenues will form part of the company’s recurring income. “We are on track in strengthening our office and mall portfolios, as we continue to experience robust demand for spaces, both office and retail, in our townships. Both our offices and retail C A
Cheap fuel means 1M more pax for Cebu Air in 2016 GOKONGWEI: “We always had a good balance sheet. Now is the opportunity to strengthen it further.”
BMReports PHILIPPINE TELCO GIANTS LAG BEHIND PEERS IN ASIA PACIFIC
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A BRONCOS WIN
The two-time Australian Open champion Victoria Azarenka had just beaten Barbaro Strycova, 6-2, 6-4, in the fourth round on Monday—continuing a threeyear sequence of wins against the Czech player that started in the second round in 2014 and included the third round last year—when she wanted to know the result of the American Football Conference title game.
$73 million
Megaworld rental income seen rising 20% this year
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ADB fund seen to boost rollout of PPP projects n
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G Summit Holdings Inc. expects its Philippine budget airline to carry a million more passengers this year, as decade-low prices for crude oil flow through to cheaper fares. Cebu Air Inc. will probably carry more than 19 million passengers this year, up from more than 18 million in 2015, President Lance Gokongwei said in a January 20 phone interview. JG Summit, which also owns 27 percent of the Manila Electric Co., thinks power
PESO EXCHANGE RATES n US 47.8570
use will rise, as cheaper fuel drives down electricity costs. The conglomerate’s petrochemical unit, which runs on feedstock from refined fuel, also will be more competitive, Gokongwei said. Cheap fuel “is positive for us, since we’re a transportation, manufacturing and industrial group,” said Gokongwei, 49. “We always had a good balance sheet. Now is the opportunity to strengthen it further.” Cebu Air rose 0.5 percent to P76.40 as of 10:19 a.m. in Manila trading, while
JG Summit gained 2.2 percent to P61.30. The Philippine Stock Exchange Composite Index advanced 1.4 percent.
Some drawbacks
GOKONGWEI said the drop in fuel prices does have its downsides. “First is that fuel surcharges have been removed, so that has reduced yields” on Cebu Air flights, he said. “Second, it’s a manifestation of weaker economic growth
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Second of three parts
HE Philippines is struggling to be as competitive as its neighbors in the Asia-Pacific region in developing its own digital economy. Unfortunately, its efforts have not been enough to compete head-to-head with its peers due to inadequate infrastructure and the unbalanced allocation of broadband spectrums to local players. Several studies conducted by Internet metrics providers showed that the Philippines has one of the slowest Internet speeds in the region. In a study published last year, Ookla listed the Philippines as the country with the second-slowest average download speed among 22 nations in Asia, with an average speed of 3.64 megabits per second (Mbps). The Philippines ranked 176th out of 202 nations around the world. Philippine broadband speed, the study noted, is also eight times slower than the global average broadband-download speed of 23.3 Mbps. Separately, Cloud services provider Akamai Technologies found C A
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n JAPAN 0.4029 n UK 68.2728 n HK 6.1447 n CHINA 7.2747 n SINGAPORE 33.4781 n AUSTRALIA 33.5909 n EU 51.7047 n SAUDI ARABIA 12.7578
Source: BSP (25 January 2016 )
BMReports BusinessMirror
A2 Tuesday, January 26, 2016
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PHL telco giants lag behind peers in Asia Pacific 176th A
that, while the Philippines might have improved its connection by a percentage point, its overall ranking in Asia still remains at No. 13 out of 15, or the third-worst connection in the region. National Telecommunications Commission (NTC) Deputy Commissioner Edgardo V. Cabarios said this hinders the Philippines from realizing the true potential that the digital economy has to offer, underscoring the importance of new technologies in driving growth to a country’s GDP. There is a direct correlation between broadband access and the growth of a country’s local output, he said. For every 10-percent increase in broadband penetration, the economy grows by 1.23 percent. Doubling the speed of the connection also results in a 0.3-percent rise in the GDP. “The industry has a huge potential of contributing largely to economic growth. Hence, the need for adequate infrastructure in telecommunications,” he said. “The digital economy is happening all over the world, and the Internet will help our entrepreneurs be more competitive in a global landscape.” With trade agreements already in place, Cabarios said the Philippines must be prepared to develop the broadband sector. National Economic and Development Authority Director General Arsenio M. Baliscan agreed, saying that there is a need for the Philippines to play “catch-up” with its neighbors. “For our economy to sustain its rapid growth of 6 percent to 7 percent in the coming two to three decades, the period when we need to catch up with our neighbors, we would need to invest aggressively and massively in infrastructure, and ICT [information and communications technology] is one of them,” he said. The government has poured in
roughly P5 billion to develop the ICT sector in the past two years. The year 2015 saw the government spending about P3.18 billion to develop the sector, roughly 81 percent of the P1.76-billion budget in 2014. The state has earmarked more than P4 billion, with the aim of further driving growth in this sector this year. Note that not all of it will be used to enhance broadband access in the country. Such a budget also is not enough.
‘Completing digital strategy impossible this year’ THE telecommunications industry in the Philippines is largely dependent on private investments. Over the past decade, the two largest players in the country—the Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc.— have jointly invested roughly P700 billion to grow their businesses. Credit watcher Fitch Ratings has predicted that the industry will invest P85 billion this year to aggressively roll out high-speed mobile and fixed-line broadband networks to offer better services. Globe Spokesman Yolanda C. Crisanto said her company will be spending about $800 million in capital expenditure this year. “The bulk of this will be devoted mostly in enhancing bandwidth capacity to enable us to stay ahead of the curve amid growing proliferation of smartphone and dataintensive multimedia applications,” she said. Its rival, the largest Filipino telco today, will likely keep its capital requirements elevated this year, despite hitting record highs in 2015 at around P43 billion. “We have not issued a formal guidance yet on our capital for 2016, but indications are that this year’s capital expenditures will be at levels similar to those of 2015,” PLDT
Cheap fuel… globally, especially with concerns about China’s weakening economy. There are also currency fears in emerging markets.” Daniel Lau and Edward Xu, analysts at Morgan Stanley, said 2016 could be a better year for carriers in the Asean. “We think that Asean airlines are likely to enjoy margin expansion, albeit on varying levels, as we do expect lower fuel prices to drive price competition, as rivals pass on fuel cost savings to passengers,” the analysts wrote in a report dated January 24. “We are raising our estimates for Asean airlines across the board as we adjust for lower fuel prices, offset by lower pax yield.” Morgan Stanley is cutting yield growth expectations for low-cost carriers in Asean, given that the airlines will take the opportunity to pass on some fuel cost savings to passengers or reduce fare growth to entice air travel, it said in the report, which doesn’t mention Cebu Air specifically. Cebu Air, which was unprofitable in the third quarter of 2015 due to fuel hedging and currency losses, is reviewing its fuel-purchase strategy and will consider adding more hedges to take advantage of the current low fuel price, Gokongwei said. Whether it can expand its fleet will depend on demand and the airline’s ability to add new destinations, he said. Jet fuel bought at an average of $75 a barrel will account for about 25 percent of Cebu Air’s fuel needs this year and 18 percent in 2017, Gokongwei said. That’s an improvement from 2015, when it paid more than $100 a barrel for
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30 percent of its fuel needs.
Two to contango
“THE market is in severe contango and that’s something we have to consider,” he said, referring to a situation where the spot price of fuel is lower than the forward price. “If I fix the price for 2017, am I going to pay $10 more to hedge compared to the spot price?” Spot prices of jet fuel cargoes loaded from Singapore fell to $37.66 a barrel on January 21, their lowest since Bloomberg began compiling the data in 2011. Cebu Air, which will sell four jets this year and receive five new ones, doesn’t plan to increase its long-haul f leet for now, Gokongwei said. Slowing global growth, market turmoil and weakening currencies, including the Philippine peso, are risks for Cebu Air, Gokongwei said. The airline generates revenue in pesos, but about 75 percent of its costs—and almost all its debt—are in US dollars.
Mideast concerns
OXFORD Economics in December 2014 named the Philippines, which imports almost all the oil it needs, as the economy set to gain the most if crude fell to $40 a barrel. With fuel now at $30, though, pain among Middle East oil producers could hit the Philippines, which sends about 2.5 million citizens to the region for work. “We haven’t seen any weakness yet, but we have to anticipate a potential slowdown in demand for travel and overseasworker traffic to the Middle East,” which is a big market for Cebu Air, Gokongwei said. Bloomberg News
Philippine ranking out of 202 nations worldwide in global average broadbanddownload speed of 23.3 Mbps
₧5B
Amount the government has poured in the past two years to develop the information and communications technology sector Spokesman Ramon R. Isberto said. But for Cabarios, the correct approach to developing the market is for the government to jointly invest in the said endeavor. “It should be a multistakeholder approach. We can’t rely on private investments, and we can’t rely on government spending. We have to do it together,” he said. At the onset of the Aquino administration, the government crafted the Philippine Digital Strategy, a five-year plan that spelled out the requirements and targets of the country toward the adoption of new technologies to be more competitive in global trade and promote inclusive growth. Under this document, the government aims to provide 80 percent of the population with Internet access with at least 2 Mbps of speed; reduce the prices of broadband Internet by at least 5 percent annually; and increase the development of infrastructure by 10 percent every year through 2016.
The plan also aims to curb the digital divide, which is a roadblock to economic development and social inclusion since a large number of individuals are still unable to access high-speed Internet. Unfortunately, most of these have yet to be realized. “The Philippine Digital Strategy is still there, but given that it is already 2016 and we are still far from achieving our goals, maybe we will have to move the time frame to achieve the goals of the plan. Right now, it is impossible to achieve them,” Cabarios said. Hence, the full realization of the plan will be largely dependent on the willingness of the next administration to implement it. “We will have to move the time frame to another five years—maybe, it will be attainable by that time, especially that the plan has been further polished,” he added, citing the recent efforts of the government to provide free wireless access in public places. The problem with the plan is also largely caused by the lack of government investments in the broadband sector. Currently, the government has no specific funding tool for telco-related investments, aside from the ones allocated to the Department of Science and Technology. “We need a universal access fund to finance investments in the digital space. We had hoped that this Congress could pass this law, but with only a few sessions left, it might be too hard for them to do it,” Cabarios said. “So maybe by the next Congress, we will have this funding mechanism for broadband development.”
Need for detailed broadband plan
THE Philippines is one of the few countries in the region where the government has yet to fully engage in investing in telco infrastructure. Neighboring countries in the Asean have already started to implement
national broadband plans, earmarking billions of dollars to develop a government-owned backbone for the information superhighway. In Thailand, for example, the government has invested $114 million to improve the Internet service or availability. The fund is part of Bangkok’s economic policy. The Vietnamese government owns two of the three largest telecommunications companies in Ho Chi Minh City. Investments mainly come from the government. Malaysia has now spent a total of $4.5 billion over a 10-year period to lay fiber-optic lines to every home in the country’s urban area. Other developing and developed economies are investing billions of dollars to improve Internet access in their countries. Cabarios said the Philippines has to craft a clear-cut National Broadband Plan to provide a clear direction for the government to ensure that all Filipinos will reap the benefits of broadband, address challenges and accelerate broadband deployment. A National Broadband Plan will provide detailed physical targets and strategies to effect nationwide broadband deployment and widespread use. Such a plan would analyze existing and planned government and private-sector deployment, and address supply and demand gaps by recommending policy and nonpolicy related actions. “The plan should be ready by June so that the incoming administration can implement the National Broadband Plan. We have to have one for medium term, which is for the next five years, and for the long term, which is for the next 10 years or so,” Cabrios said.
Government intervention
WHAT the government has do is to pinpoint the areas on which it should pour in money, the sphere on which it will help the private sector,
and the fields that are better left with private investments. “The problem with the Philippines is that broadband growth is largely concentrated on larger areas where competition will survive— mainly the cities. What happens to the others? They are left without Internet access. As the government, we have to do this,” he said. He cited, for example, countries like the US and New Zealand, where the government intervenes in developing telecommunications infrastructure in so-called missionary areas, provinces which are considered markets with very low demand. “The strategy of the United States is this: Where competition thrives, the telcos are left alone. For areas without connection, the government encourages the providers. But if there really is no appetite for a market, the government has to intervene,” Cabarios said. He added: “Similar to that, we have to identify where the government should invest, where the government has to subsidize and where the government will leave the market to the private sector.” “The government of New Zealand even created a funding company for four to five telcos owned by the government to develop the infrastructure. The principle is this: For as long as there is no telco service in a certain area, the government will operate, until companies are willing to buy in.” In the case of the Philippines, these areas may be found in the mountains, far-flung provinces and war-torn zones. This is where the universal access fund will be critical. “It is crucial because it will provide funding for the development of infrastructure in missionary areas. It’s a big requirement. But you cannot do it overnight. The fund will increase every year, hopefully. You keep on increasing the penetration and move further until every and all villages are connected,” he said. To be concluded
Megaworld rental income seen rising 20% this year… C
spaces enjoy a very high occupancy rate of around 99 percent across our developments,” Jericho Go, the company’s senior vice president, said in a statement. At least 10 office towers in Uptown Bonifacio, McKinley West, The Mactan Newtown and Iloilo Business Park will be completed by year-end. These new office towers will bring in a gross floor area of 287,500 square meters. The company by year-end will have a total gross floor area of more than
650,000 sq m. Currently, the firm has more than 150 companies in its portfolio of office tenants, mostly from the information technology and business-process outsourcing (BPO) sector, such as Accenture, Wells Fargo, HP, IBM and United Health Group. Around 11 malls and commercial centers, on the other hand, will be completed in McKinley Hill, Uptown Bonifacio, McKinley West, The Mactan Newtown, Iloilo
Business Park, ArcoVia City, Southwoods City and Makati by yearend. These new developments will have a gross floor area of around 371,000 sq m. “Our malls and commercial centers primarily cater to our growing residents and BPO workers in our townships. Megaworld offers a ready market to our r wetail partners. In McKinley Hill, for example, where we have around 80,000 BPO workers and 12,000 residents. They are the
primary customers of Venice Piazza, Tuscany and the upcoming Venice Grand Canal Mall,” Go said. For the three quarters of 2015, Megaworld’s rental income rose 24 percent to P6.44 billion, from the previous year’s P5.19 billion. The company’s net income dropped to P8.35 billion for the nine months of 2015 ending September, or less than half of the previous year’s P19.03 billion income, which included huge one-time gains. VG Cabuag
ADB fund seen to boost rollout of PPP projects C A
and framework, as well as monitoring and restructuring of individual deals. “Through this facility, we are further assisting the public sector to structure PPP green field projects to make them viable and bankable. Uniquely, this facility also supports ongoing brown field projects where public sector needs to monitor their progress, and to restructure them if the projects are not on the track as initially planned,” ADB Office of Public-Private Partnership Head Ryuichi Kaga told the BM in an e-mail. The ADB facility is similar to the Philippines’s own Project Development Monitoring Facility (PDMF). For her part, PPP Center Executive Director Cosette Canilao told the BM that the launch of the AP3F also means additional financial resources for the government’s line agencies, particularly in PPP preparation.
“It will increase the avenues by which implementing agencies or the government can get help in terms of project preparation,” Canilao said. Canilao added that project-preparation financing for PPPs can be obtained from various sources, such as the national budget, the PDMF and multilateral and bilateral agencies. She said the departments of Public Works and Highways and Transportation and Communications have recently obtained funding from the International Finance Corp. and the US Agency for International Development for the project-preparation needs of some of their PPPs. Having additional sources of funds for preparing PPP projects would help jump-start key infrastructure projects as both the PDMF and the budget of line agencies are limited. The PDMF is a revolving fund that helps in financing feasibility studies and other studies needed
in project preparation. In a statement, the ADB said the AP3F is a multi-donor trust fund that seeks to help developing Asia and the Pacific prepare, structure and place bankable PPP projects in the market. The facility is funded by commitments from the governments of Japan, Canada and Australia to contribute $40 million, CA$20 million and AU$10 million respectively. ADB added that it will also contribute $10 million to the facility. The Manila-based lender said more donors are expected to contribute to the fund. The facility’s primary objective is project-preparation support for governments, including due diligence and advisory work covering technical, financial, legal and regulatory issues, as well as safeguards. It can also provide capacity and policy-development support and project-operation support, including monitoring and restructuring work
for existing projects. “AP3F exemplifies ADB’s broader role as a development partner to governments that goes beyond the financing of Asia’s infrastructure,” the ADB said. The new facility will prioritize PPP i n f r a s t r u c t u r e p r o j e c t s with regional cooperation, sustainable development and climatechange elements. The ADB’s efforts parallel those of the Group of Twenty (G20) nations and the Asia-Pacific Economic Cooperation (Apec) forum, which both stress the importance of attracting private-sector participation in infrastructure as a means to promote growth, expand trade and improve livelihoods. In 2014 the G20’s finance ministers endorsed the Global Infrastructure Initiative which is aimed at increasing long-term private investment in infrastructure. AP3F is also part of Apec’s 2015 Cebu Action Plan.
BMReports BusinessMirror
news@businessmirror.com.ph
Tuesday, January 26, 2016
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Consolidated CMTA up for ratification $227B
THE Manila North Harbor, like other ports in the country, usually experiences congestion due to the inability of the government to modernize the sea gateways. ALYSA SALEN
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ONGRESS—doing its best to meet a self-imposed deadline—is set to ratify this week the final version of a reconciled bill updating the Tariff and Customs Code of the Philippines (TCCP), a long-awaited move “modernizing” customs procedures to facilitate trade and increase revenue collections.
“It will be submitted for final ratification [by the Senate and the House] on Wednesday,” said Sen. Juan Edgardo Angara, chairman of the Senate Committee on Ways and Means and chief sponsor of Senate Bill 2968, embodying the proposed Customs Modernization and Tariff Act (CMTA). In a brief interview, Angara disclosed on Monday that the consolidated CMTA bill is now being circulated for signatures by members of the bicameral panel that met for two days to reconcile conflicting provisions on the Senate and House versions of the measure. Angara admitted that the timely approval of the CMTA bill before the current Congress finally adjourns sessions next week was being “pushed heavily” by the Department of Finance
PHL urban-resilience project to cover more LGUs near ‘critical watersheds’
and the Bureau of Customs (BOC), as well as the Palace. Angara acknowledged the steppedup Palace lobbying efforts to get the bill enacted into law soonest “kasi po-pogi ang Pilipinas sa businesscommunity worldwide.” “We will look good with the international community as a businessfriendly destination,” Angara told the BusinessMirror. The soon-to-be-enacted law amends the existing TCCP to fully comply with the Revised Kyoto Convention (RKC), considered a blueprint for “modern and efficient customs procedures” of the World Customs Organization. According to Angara, the proposed CMTA is not seen to result in any revenue loss to the government, citing projections that its early implementation would even lead to an estimated 10-percent increase in customs collections. He explained that the CMTA was crafted to “simplify, modernize and
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HE Philippine government is scaling up its initiatives to make the country more resilient to the effects of climate change, specifically in areas near “critical watersheds.” This was confirmed to the BUSINESSMIRROR by Asian Development Bank Southeast Asia Department principal climatechange specialist Ancha Srinivasan in an interview at the sidelines of the Workshop on Urban Resilience to Climate Change and Green Growth in Critical Watersheds of the Philippines on Monday. “I was just talking to Secretary [Emmanuel] de Guzman [of the Climate Change Commission]. He wants to scale up [the project] because he just visited our work in Davao Oriental and he was impressed with the type of capacitybuilding activity going on in LGUs [local government units]” Srinivasan said. The ADB and the Japan Fund for Poverty Reduction (JFPR) extended $2.5 million in grants to finance the Demonstrating Ecotown Framework in the Up-
per Marikina River Basin and Protected Landscape (UMRBPL) and the Climate Resilience and Green Growth in Critical Watersheds projects, respectively. But Srinivasan said the two projects were only able to cover 14 LGUs in three watersheds. Scaling this up means covering 11 or 12 more LGUs with barangays in the area of critical watersheds. If the government intends to further expand this project to include LGUs in the other 15 critical watersheds, this will require a significant amount of funding. These watersheds include Magat, Abulog-Apayao, Angat, Pantabangan, Jalauar, Maasin, Salug, Muleta-Manupali, Andanan, Allah and Buluan-Alip. This funding, Srinivasan said, could be obtained through loans—not grants—from the ADB or other sources since the country, being a middle-income country, can afford to pay them. “If the government considers that this is in the long-term interest of the people and the community, in terms of protecting their investments from future impacts of climate change, it could be [a] loan,” Srini-
vasan said. “[But] we believe it will be a blend of grant and loan investments if we really want to scale up [the project].” The ADB-funded project aimed to create a “green growth road map” for the UMRBLP and prepare an inventory of greenhouse-gas (GHG) emissions, as well as assess the vulnerability to climate change of ecosystem services. The project also aimed to identify priority interventions to respond to the impacts of climate change and trigger green growth; develop local climatechange action plans that can be integrated into comprehensive development plans of the concerned LGUs; and pilot select adaptation and greengrowth measures. The JFPR-funded project, on the other hand, sought to demonstrate climateresilient green-growth options in critical watersheds in the lower Marikina River basin, Camarines Sur and Davao Oriental. The project also aimed to strengthen the capacity of LGUs to mainstream climate-change concerns into development planning.
Customs revenue leakage from 1960 to 2011 that Congress hopes to plug through the CMTA
claim gifts or packages which are stuck at the ports.” He notes that the CMTA also envisions the use of information and communications technology and other appropriate applications to “reinforce the BOC’s functions toward simplified, secured and harmonized trade facilitation.” Foreign businessmen have been urging the 16th Congress to ensure the approval of the CMTA, aside from ensuring the transparency of transactions at the BOC. European Chamber of Commerce of the Philippines President Guenter Taus said having the CMTA in place will allow the Philippines to be compliant with international trade commitments and regulations. “[CMTA] will accelerate the automation of customs procedures and the full implementation of the National Single Window, thus, preparing the Philippines for the Asean Single Window,” Taus told the BusinessMirror. “At the policy level, [CMTA] will align customs procedures to the Philippines’s commitments under the Revised Kyoto Protocol of the World Customs Organization and the Trade Facilitation Agreement of the World Trade Organization, with the condition that provisions on Pre-Shipment Inspection are not included,” he added. Taus said the passage of the proposed CMTA would send a signal to the European Union (EU) that the Philippines is “serious” about strengthening its economic ties with the 28-member bloc and in pursuing a free-trade agreement with the EU. “The enactment of CMTA will significantly improve market access to the Philippines and the ease of exporting Philippine products. It is an important measure to strengthen the competitiveness of the country vis-à-vis other Asean member-states and the wider global market.”
BCCP’S NELSON PAINTS ROSY OUTLOOK FOR PHILIPPINES–BRITAIN SME TRADE B C N. P
THE Pangtabangan Dam is one of the 15 critical watersheds identified by the government. NONIE REYES
align the country’s customs procedures with global best practices” by introducing amendments to the TCCP. In crafting the CMTA, Angara confirmed that lawmakers also wanted to overhaul and modernize the BOC, “long been perceived as one of the most corrupt and underperforming government agencies in the country.” The senator noted that “approximately $277 billion in revenues was lost by the government from 1960 to 2011 due to technical smuggling, according to a 2014 study of Global Financial Integrity.” Angara added that the CMTA was also crafted to increase transparency and simplify procedures in the BOC, increase the de minimis value, raise the tax-exemption ceiling for packages sent by balikbayan and returning residents, and provide harsher penalties for smuggling. He explained that de minimis covers small items that are usually minor or lacking importance. The senator said the CMTA also carries a provision raising the tax-exempt value of balikbayan boxes from P10,000 to P150,000, and the de minimis value from P10 to P10,000. “Tax-exempt and de minimis values may also change every three years. Donation and relief goods will also be duty- and tax-free during times of calamity,” he added. Angara asserted that the bill also “clearly defines the exercise of customs police authority, customs jurisdiction and customs control.” The senator recalled that during the public hearings on the measure, BOC officials told lawmakers they anticipate a 10-percent increase in revenue collection once the bill is enacted into law, with the BOC pegging revenue collection at P369 billion in 2014. In a separate statement, Senate President Franklin Drilon acknowledged that upgrading the current customs systems to electronic processing would make the BOC’s importation and exportation procedures faster, more effective and more convenient, especially for the public. Drilon said the modernization envisioned under the CMTA will “benefit millions of ordinary Filipinos who suffer from the inefficiencies in the handling of incoming and outgoing goods, especially during holiday seasons, when Filipinos endure the cumbersome process of trying to
HE British Chamber of Commerce Philippines (BCCP) on Monday expressed confidence that it could attract more British small and medium enterprises (SMEs) to the Philippines, especially in food, beverage and retail businesses. Chris Nelson, BCCP chairman, painted a rosy outlook for Philippine-British trade in the incoming year, citing what he described as the sustained interest of Britain-based SMEs in the country. “The key for British companies is that they see the opportunities here; and they’ve seen their colleagues seize the opportunity. The focus now will be on what [had] happened [in the past year]. I think the retail sector, especially those in food and beverage, have done well,” Nelson said during a luncheon conference with reporters. Interest in trade in goods and services remain high, given the success of the UK retail chains, such as Waitrose and Costa Coffee, Nelson added. The two British brands have already closed distribution agreements with local companies to establish presence in the Philippines last year. Other areas of interest to British SMEs are in software, engineering services and pharmaceuticals. “What we want to do is more sector-specific in our promotions. There’s a really wide interest level in sectors in [the Philippine] market,” Nelson added.
The key for British companies is that they see the opportunities here; and they’ve seen their colleagues seize the opportunity.”—Nelson The BCCP, through its Business Support Service (BSS), has already assisted 20 British companies to find local partners since the year began, with most of the firms engaged in the distribution of pharmaceutical products. Some of these firms are Bruntys Cider, Allied Pharmaceuticals and Rosemont Pharmaceuticals. Since the BSS started in 2014, the BCCP has facilitated the entry of some 700 British companies in the local market. For outbound promotion, Nelson said he is poised to make a pitch to UK firms at the British Chamber of Singapore’s Trade Mission event in the city-state in February. A major event in the pipeline is a joint promotion effort with the UK Trade and Investment Office in June this year, and to host British companies in the sectors of power and renewable energy. According to the BCCP, UK exports to the Philip-
pines grew by 44 percent in the first half of 2015. Based on data from the Department of Trade and Industry, total trade between the Philippines and Great Britain (the UK and North Ireland) has amounted to $586 million from January to August 2015. Bilateral trade has averaged around $1.8 billion annually, the BCCP said.
A4 Tuesday, January 26, 2016
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Where’s the money? Malacañang must tell the families of the slain SAF commandos how the reward money was shared.”–Duterte
Former President Fidel V. Ramos (from left), Interior Secretary Mel Senen S. Sarmiento, President Aquino, National Police chief Director General Ricardo Marquez and Special Action Force commander Director Moro Lazo say a short prayer for the eternal repose of the SAF commandos who perished during a botched anti-terrorist operation in Mamasapano, Maguindanao, on January 25 last year. This years National Police anniversary celebration was held on January 25 in commemoration of the first year of the death of the 44 commandos. The ceremonies were held at the at the National Police general headquarter's Multi-Purpose Center in Camp Rafael Crame, Quezon City. NONOY LACZA
Aquino blames ‘breach of procedure’ for killing of SAF 44 in Mamasapano
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RESIDENT Aquino on Monday met with the families of the 44 members of the Special Action Force (SAF), who died in the Mamasapano operation against an international terrorist a year ago, and promised a speedy justice for the deaths of their loved ones.
Aquino said that he himself is frustrated by the pace of how government authorities are building up a case to prosecute the perpetrators of the massacre of the 44 SAF commandos in the botched Mamasapano operation. Ma lacañang sa id t hat t he impromptu meeting started at around 11 a.m. after the commemoration ceremonies in Camp Crame on Monday for the first anniversary of the deaths of the 44 SAF members, and is the third meeting between Aquino and the surviving families of the SAF 44 members, the first two being in January and February 2015. However, contrary to his earlier pronouncement that he takes the blame as commander in chief for the deaths of the 44 SAF members, Aquino appeared to pass the buck to a “breach of procedure” committed by police officers in charge of the operation. “You can count on this, that along with the giving of support for the families of the SAF 44, the government is striving hard to achieve justice. Our call on Congress is this: let us examine the National Police law and determine the provisions that hinder the immediate rendering of punishment for officials who are remiss in their duties. We do not want a tragedy to happen again just because of a breach in protocols,” Aquino said in his speech at the first year commemoration ceremonies at Camp Crame. He was apparently referring to the National Police Board of Inquiry (BOI) report on the Mamasapano operation, and how it went awry. Former SAF Chief Director Getu-
lio P. Napeñas Jr., now a senatorial candidate under the opposition party of Vice President Jejomar C. Binay, was blamed by the BOI as having breached certain police and military operation protocols in the planning and actual execution of the Mamasapano operation to capture international terrorist Zulkifli bin Hir, alias Marwan. The said report also tried to absolve Aquino from liability for not deploying the reinforcements, pointing instead to Napeñas as the brainchild of the “time-on-target” strategy to keep the operation as a secret until the actual target had already been engaged by the police on the ground because he believed that intermarriages between military personnel and the local people in Mamasapano could compromise the operation and endanger the lives of those who would actually carry it out.
said, adding that he would like his message to be relayed to the authorities and the operators of the raid who killed Marwan, the 44 SAF commandos. He said Malacañang must “tell the families of the slain police commandos how the reward money was shared.” “While the families of the victims in the Mamasapano massacre could not be eased by material things, the members of the raiding team must share in the reward money, because more than anybody else, they made the supreme sacrifice,” he said The US government offered $5 million reward for information that would lead to the capture or killing of Marwan, who was listed as one of the top international terrorists for his involvement in the deadly 2002 explosion in the Indonesian resort island of Bali that killed and wounding scores of foreign tourists, most of them Australians. He said the reward money for operations like the Mamasapano raid to get Marwan “is supposed to be given only to the informants, but in actual practice, it is usually shared between the informant and those responsible in carrying out the operations.” “While government operatives are not supposed to get a share of the reward money, the reality on the ground is that police operatives also get to claim part of the reward in an arrangement made among the participants of the operation,” he said.
Where’s the reward money?
‘Speculative’
DAVAO CITY—Mayor Rodrigo R. Duterte on Monday urged operators of the Mamasapano, Maguindanao, raid last year “to disclose who claimed the $5 million reward offered for the capture of Marwan and how it was divided.” Duterte issued the challenge in a meeting on Sunday in Zamboanga City with the wives of two of the 44 police commandos, who were killed in the raid, as he disclosed that he was with Aquino and then Interior Secretary Manuel A. Roxas II in the command center at Andrews Air Base on January 25 last year, the day the Mamasapano raid was conducted. “Where’s the money?” Duterte
NEWLY Appointed Justice Secretary Emmanuel L. Caparas branded “speculative” the alleged new evidence that will be presented before the Senate when it reopens its investigation on the Mamasapano massacre. Caparas said the justice department would have to wait for the supposed new evidence to be presented before the Senate before it can pass on its validity and decide whether it can be subject for investigation by the department. “That is speculative. Let us wait. I don’t know what additional evidence that is. Let us just wait,” Caparas said. Earlier, Sen. Juan Ponce Enrile vowed to show proof that Aquino
“actively and directly involved himself in the planning and preparation of Oplan Exodus.” Meanwhile, retired Chief Superintendent Diosdado T. Valeroso said during a news conference that he has in his possession a digital audio recording of a conversation between a ranking government official and a lawmaker about the January 25 Mamasapano encounter last year. The conversation, which he said took place a day or two after the Mamasapano carnage, appears to be between two persons talking about an attempt to cover up the Mamasapano incident to avoid its possible effect on the passage of the Bangsamoro basic law (BBL) in Congress. The Mamasapano inquiry is being reopened by Senate Committee on Public Order and Dangerous Drugs, chaired by Sen. Grace Poe, upon the request of Enrile. Caparas also denied that the Department of Justice (DOJ) is delaying its resolution on the Mamasapano case which has been submitted for resolution by a panel of procecutors following preliminary investigation. While it has been a year since the death of the SAF 44, Caparas insisted they are not sitting on the Mamasapano case and promised that a resolution will be out soon. “You are talking about many, many witnesses, you are talking about several defendants, and when you put that all together, you sum it all up, an investigation like that can take a very long time,” Caparas pointed out. A total of 90 respondents belonging to the Moro Islamic Liberation Front (MILF), its breakaway group Bangsamoro Islamic Freedom Fighters (BIFF), and local armed groups have been charged before the DOJ for the complex crime of direct assault with murder for the death of the 35 of the 44 SAF members belonging to the 55th Special Action Company (SAC). On the other hand, the factfinding team failed to gather evidence that would point to those responsible for the killing of the other nine members of the 84th SAC. State Prosecutor Alexander Suarez, one of the members of the
five-man preliminary investigation panel earlier said only four out of the 90 respondents responded to the subpoenas they issued.
‘What cover-up?’
TOP police and interior department officials denied on Monday reports about the alleged previous attempt by the government to cover up for the Mamasapano massacre. “Cover-up, there is no coverup,” Interior Secretary Mel Senen Sarmiento said about the reinvestigation into the massacre of the 44 members of the SAF while on counterterrorism operations in Maguindanao a year ago. “But I don’t want to comment on something I don’t know, but hearings have been conducted and this issue already went through the process,” he added during the 25th National Police Foundation Day anniversary celebration at Camp Rafael Crame in Quezon City. The celebration was highlighted by the awarding of medals to the slain 44 police commandos, including two Medal of Valor. The awards were received by family members of 38 of the killed policemen and classmates of two of the slain policemen. The four others did not have any representative. “As far as we are concerned, there was no attempt to cover up the investigation. I heard during the executive session everyone was given the chance to talk freely. Hindi ko alam kung ano pa iyong sinasabi nilang audio [recorded] conversation,” said Director General Ricardo Marquez, National Police chief. “When we have heared that [audio recording]…that’s the time maybe that we can comment,” Marquez added. Sarmiento and Marquez were reacting to reports about the recording that was reportedly in the possession of retired Chief Supt. Diosdado Valeroso. Valeroso, former deputy commander for administration of the Metro Manila police command, claimed he received the recording through an e-mail. He said copies of the recording will be distributed on Wednesday during the Senate hearing. Earlier, Enrile said he has evidence that would point the direct
responsibility of Aquino in the killing of the commandos by fighters of the MILF and the BIFF. Marquez said he is waiting to have a copy of the supposed recording, which he had already asked from Valeroso, his classmate at the Philippine Military Academy, but was turned down. “I asked him if I can be given a copy. He told me, it will be distributed simultaneously,” Marquez said.
Justice
LAWMAKERS on Monday urged the national government to finally bring justice to the 44 SAF troopers who were brutally murdered by Moro rebel forces and lawless elements in Mamasapano, Maguindanao. Speaking on the first anniversary of the massacre, Speaker Feliciano Belmonte Jr. asked the government to expedite the cases against members of the MILF and the BIFF who killed the 44 SAF commandos. “It’s time for us to move on but also time for the prosecution people to do their job thoroughly, justice must be done, but as a people, we need to move on,” Belmonte told reporters. Dismayed by the national government’s inaction on the incident, Party-list Rep. Gary Alejano of Magdalo noted the stark contrast between the hurried efforts to pass the proposed BBL while wheels of justice turn ever slowly on the Mamasapano case. Alejano assailed the slow investigation on the massacre, citing that the charges against perpetrators— who include MILF and BIFF commanders and combatants—were supposed to be filed several months ago, but no meaningful development has taken place up to now. “The government has not been aggressive in pursuing justice for the slain SAF troopers. It would appear now that this administration has been deliberately silent and complacent in seeking justice for SAF 44. On the other hand, they are determined in pushing for the passage of the BBL and rewarding the MILF in the process by serving them on a silver platter the control of the would-be Bangsamoro government,” he said. David Cagahastian, Joel San Juan, Rene Acosta and Jovee Marie N. dela Cruz
AseanTuesday BusinessMirror
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Najib defends security laws amid growing terror threats
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ALAYSIAN Prime Minister Najib Razak defended more stringent security laws that were passed last year, saying they are needed to combat terrorism, even as critics warn they could be used against government detractors. The threat from the radicalization of youths and religious extremism “is very real,” Najib said in a speech at an antiterrorism conference in Kuala Lumpur on Monday. Malaysia will not wait for an attack before putting measures in place, he said. Malaysia, like other Southeast Asian nations, is grappling with the challenge of Islamic State (IS) and its citizens going to the Middle East to fight. An antiterrorism law passed in 2015 allows suspects to be held for years without trial, bringing back security measures repealed in 2012 that were used mostly against the government’s political opponents. “It is right to talk about striking a balance between civil liberties and national security” but IS doesn’t care about such social norms, Najib said. “The best way to uphold civil liberties is to ensure the safety of the nation. I make no apology for taking every step to preserve that safety.”
Recruitment target
THE government has said the laws are needed because Malaysia has become a target, as well as a source of recruitment for potential militants. The measures—which have drawn critics, including the Malaysian Bar and Human Rights Watch —allow for the jailing of suspects without trial, bypassing judicial reviews on detentions and putting offenders on a registry. “When other countries have come under attack, some have expressed their dismay that they do not have legislation which allows them to deal with the problem promptly and early,” Najib said. “I will not allow Malaysia to be so open to infiltration.” In the past two years, Malaysia has detained dozens for suspected links to terrorism groups, prevented its citizens from traveling to Syria and arrested those who returned after fighting there. Counterterrorism police are holding seven people captured in a three-day operation across states in West Malaysia, Inspector General of Police Khalid Abu Bakar said in a Twitter post on Sunday. Indonesia plans to revise its existing antiterrorism law and will bar Indonesians joining IS from reentering the country, the government said, after militants linked to the group killed four people in a gun-and-bomb assault in central Jakarta this month. Southeast Asia, home to about 15 percent of the world’s 1.57 billion Muslims, has also seen local militant outfits carry out attacks over the years in Indonesia, southern Thailand and the southern Philippines. A new and more comprehensive approach is needed to tackle terrorism and radical activity in view of its constantly changing nature, Malaysia Deputy Prime Minister Zahid Hamidi said at the same conference. Methods and approaches toward the rehabilitation of terrorists and extremists must also be reviewed, he said. Human-rights activists have slammed a law implemented last year that revives detention without trial, and another law approved last month that gives sweeping powers to a council led by the prime minister. Police earlier said the IS group had posted a video that warns of attacks over the arrest of its members. Bloomberg News, AP
Tuesday, January 26, 2016 A5
Vietnam PM makes last-minute comeback in leadership battle
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IETNAM’S pro-business prime minister, who last week appeared to have lost a power struggle in the ruling Communist Party, has made a lastminute comeback and will know on Monday if he can reenter the contest for the top job in the country.
Using a loophole in party rules, supporters of Prime Minister Nguyen Tan Dung on Sunday proposed that his name be added to the list of candidates who can contest for membership to the Central Committee, one of the two pillars of the ruling establishment. If Dung makes it, he will stand a good chance to be elected to the committee, and then would be in a position to challenge his rival, General Secretary Nguyen Phu Trong, for his job. The party general secretary is the de facto No. 1 leader in the collective leadership that governs Vietnam. “Dung is a skilled and determined infighter and most people agreed there was still a remote chance that he would try to mount some sort of comeback,” said Murray Hiebert, a Southeast Asian expert at the Center for Strategic and International Studies in Washington. Trong has for years been trying unsuccessfully to sideline Dung, and while contests for the top post are not unheard of, they are usually settled well before the party congress, which take place once every five years to choose new leaders. This year the rivalry between Dung and Trong has gone down to the wire into the party congress that began last Thursday and will end this Thursday. But regardless of who wins, the fundamental makeup of the government or its policies will not change radically, according to analysts. Dung has built a reputation for promoting economic reforms, and being bold enough to confront China in its territorial aggression in the South China Sea. But even if Trong, a stolid party apparatchik with closer leanings toward China, manages to sideline Dung eventually, it doesn’t mean the economic reforms would stall or Vietnam will capitulate to Chinese maritime aggression in Vietnamese waters, according to observers. “Ideologically, there isn’t a yawning gap between Trong and Dung, although most people believe that the pace of economic reform might slow a bit if Trong remains at the helm and Dung is ousted,” Hiebert told the Associated Press.
1,510
Number of attendees to the Communist Party members that will choose the 180 Central Committee members, who, in turn, will elect at least 16 members to the all-powerful Vietnam Politburo. For now, the road to the top is paved with hurdles for Dung. He faces the first one later Monday on the floor of the Communist Party congress that is being attended by 1,510 delegates behind closed doors. The delegates will pick 234 candidates for an election to the 180-member Central Committee. Of these, 199 people endorsed by the outgoing committee are guaranteed to be picked. The remaining 35 will be chosen from the 62 politicians proposed by some of the delegates, which includes Dung’s name. If he does get chosen, he will still need to win an endorsement from the floor to make it to the final 180 in an election on Tuesday. After that, they will elect at least 16 members to the all-powerful Politburo, which handles the day to day governance of Vietnam. It is possible that the Politburo will be expanded to 18 members this year. Of the Politburo members, one will be chosen the general secretary, the country’s top leader. Three others will be chosen, in respective order of seniority: the prime minister, the president and the chairman of the national assembly. Dung, who has risen through the ranks of the party and has held senior positions, is a two-term prime minister. This means he can’t be the prime minister for a third term, leaving only the general secretary’s post as a viable option. AP
A MEMBER of Malaysian military patrols outside a shopping mall in Kuala Lumpur, Malaysia, on Monday. Malaysia’s leader has defended strict security laws to fight terrorism as the Islamic State group warned of revenge over a crackdown on its members. AP
IN this May, 20, 2013, file photo, Nguyen Phu Trong (left), general secretary of the Communist Party of Vietnam, and Vietnamese Prime Minister Nguyen Tan Dung walk to the mausoleum of late President Ho Chi Minh in Hanoi. AP
A6 Tuesday, January 26, 2016 | www.businessmirror.com.ph
AustraliaDa A BusinessMirror Special Feature
Australia Day 2016: Celebrating #First70Years with the Philippines
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B A A G
FEEL very fortunate to arrive in the Philippines in time to celebrate Australia Day 2016 and also at this most dynamic period in our bilateral relationship.
In 2016 the Philippines and Australia jointly commemorate the 70th anniversary of our formal bilateral relations—although our friendship goes back further than this. We are celebrating what President Aquino describes as a long legacy of cooperation. In World War II 4,000 Australian soldiers fought side by side with Filipino and allied soldiers, and 96 Australians gave up their lives for the cause of freedom. Rewind even further to the late 1800s, when skilled Filipinos traveled to Australia and were instrumental in the establishment of the pearldiving and trading industry of Northern Australia. In fact, the pearl is an apt metaphor for the Australia-Philippines relationship in that it has evolved in an organic way over time resulting in something that is precious and valuable. Our modern relationship is deep and broad, reflecting our shared values and common interests. The signing of the Joint Declaration on Philippines-Australia Comprehensive Partnership on November 18, 2015 by Mr. Aquino and Prime Minister
Malcolm Turnbull marks a new era. The Comprehensive Partnership affirms our commitment to cooperate across a broad range of activities, including on trade, development, defence, education, counterterrorism and transnational crime. As a key development partner, Australia is committed to work with the government of the Philippines to promote prosperity, reduce poverty and enhance political stability. Threats that ignore geographic boundaries cannot be managed by one
country alone. We greatly value our strong and effective collaboration in maritime security, border control, people smuggling and counterterrorism. Education ties continue a steady growth and I would love to see even more Filipinos studying in Australia. In my short time in the Philippines, I have already met a number of people of all ages who have studied in Australia. And Australian students are studying in the Philippines under Australia’s New Colombo Plan. These experiences
forge bonds of understanding and affection that last a lifetime. One of the most exciting aspects of our bilateral relationship is the increasing economic ties. There are over 200 Australian companies (employing over 30,000 Filipinos) in the Philippines across a wide range of sectors—from business processing, finance, professional services, oil and gas exploration, manufacturing, resources and infrastructure. Representatives of these companies tell me that they see great potential in
the Philippines and I am pleased to see that they are contributing to the communities that have welcomed them in very meaningful ways. There are also Philippine companies exploring commercial opportunities in Australia. And the 250,000-strong Philippine community in Australia continue to make a very positive contribution to my country. I am looking forward to a year of celebrations of the 70th Anniversary and I warmly encourage others to join in.
It is a fitting time for us to recall the official message from then-Australian Prime Minister Ben Chifley to incoming President Manuel A. Roxas on the eve of Philippine independence in 1946—a message that resonates today. “It is my conviction that, if we maintain the friendship forged in war, we will never again see our liberties in peril. As free people, we now willingly cooperate in a joint effort to achieve a better world.” Happy Australia Day and Mabuhay!
ay2016
www.businessmirror.com.ph | Tuesday, January 26, 2016
A7
TRADE TIES BOOST 70TH ANNIVERSARY CELEBRATION
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USTRALIA prides itself with having strong trade ties with the Philippines developed over the years through mutual cooperation and exchange. The two-way trade ties between Australia and the Philippines are valued at approximately A$4.15 billion per annum. There are more than 200 Australian companies in the Philippines significantly contributing to the country’s economic well-being. The companies’ commercial and economic contributions include employing thousands of Filipinos; paying local taxes; buying local materials and goods; and hiring the services of domestic companies and individuals. The following global Australian companies have thrown their support behind the Australia Day celebration this year:
Cardno
CARDNO is an ASX-200 professional infrastructure and environmental services company, with expertise in the development and improvement of physical and social infrastructure for communities around the world. Cardno’s vision is to be a world leader in the provision of professional services to improve the physical and social environment.
Crone Partners
Qantas
FOUNDED in regional Queensland in 1920—as the Queensland and Northern Territory Aerial Service— Qantas is one of Australia’s most iconic brands and has played a central role in the development of the Australian and international aviation industry. Today the Qantas Group is a diverse global aviation business, comprising Qantas Domestic, Qantas International, the Jetstar low-cost carrier group and Qantas Loyalty.
CRONE Partners is an international design and consulting firm working in markets across Australia, China, Asia, India and the Middle East. Its mission, based on innovation, creative thinking and a sustainable environment, continues to lay the important foundations for the well-being of the global community and its environment.
QBE Group
ANZ has been in the Philippines since 1990 and today services institutional and retail customers from its branch in Makati City. ANZ Philippines is a fully licensed universal bank providing domestic and foreign-currency lending, trade and supply-chain services, payments and cash management, foreign exchange, commodity and interest-rate hedging products, debt-capital markets and retail-banking services.
IDP
IDP is a global leader in international student placement and co-owner of the world’s most popular English language test. IDP Philippines has been involved in education services for the Filipino people for almost 30 years. The main office is in Makati City, with another branch in Cebu.
GREENSTONE Resources Corp. (GRC) is a registered Philippine company and an affiliate of Red 5 Ltd., a Western Australia-based gold-exploration company whose shares are traded in the Australian Stock Exchange. GRC has interest in the Siana Gold Project (MPSA 184-2002-XIII) and the Mapawa Gold Project (MPSA 280-2009-XIII), both in Surigao del Norte.
Aurecon
Macquarie
SMEC
ANZ Bank
AS one of the world’s leading engineering, management and technical services consultants, Aurecon is focused on adding significant value to clients’ businesses and ensuring reliable and effective delivery of infrastructure and projects. Aurecon’s Philippines office was established to support its international development business across the Asia-Pacific region.
Austal
AUSTAL is an Australian company that specializes in the design and construction of aluminium vessels. Its main products include passenger and freight ferries, luxury yachts and military vessels.
Australian International School
THE Australian International School is a multidisciplinary academic institution that specializes in bringing best practices in international education to the Philippines. Its goal is to have all its offered programs lead to or earn international certification or recognition.
MACQUARIE Group is a global financial services provider. It acts primarily as an investment intermediary for institutional, corporate and retail clients, and counterparties around the world. Macquarie’s diverse range of services includes corporate finance and advisory, equities research and broking, funds and asset management, foreign exchange, fixed-income and commodities trading, lending and leasing, and private wealth management.
Meat and Livestock Australia
MEAT and Livestock Australia Ltd. (MLA) delivers marketing and research and development services for Australia’s cattle, sheep and goat producers. MLA creates opportunities for livestock-supply chains from their combined investments to build demand and productivity.
OceanaGold
OCEANAGOLD is a significant multinational gold producer with four operating gold mines and a portfolio of development and exploration assets in the South Island of New Zealand and the northern Philippines.
QBE Insurance Group Ltd. is Australia’s largest global insurer. It provides insurance services mainly to Australia, America, Europe and Asia-Pacific region. As of 2014, it has over 16,000 employees in 52 countries.
Greenstone Resources Corp.
SMEC is recognized around the world for providing high quality, practical solutions for physical and social infrastructure projects. SMEC aligns technical expertise with local knowledge to address the needs of its diverse client base. SMEC has 5,400-plus employees and an established network of over 75 offices in more than 40 countries across Australia, Asia, the Middle East, Africa, and North and South America.
Telstra
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A8 Tuesday, January 26, 2016
The World BusinessMirror
Editor: Lyn Resurreccion • news@businessmirror.com.ph
After emerging from blizzard, East Coast still faces difficult commute
ANGELO DELACRUS (right), 15, of Passaic, who came from the Dominican Republic recently, shovels snow in the middle of Van Buren Street in Passaic, New Jersey, on January 24. KEVIN R. WEXLER/THE RECORD OF BERGEN COUNTY VIA AP
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EW YORK—The blizzardblanketed Eastern US will confront a Monday commute slowed by slick roads, damaged transit lines and endless mounds of snow, after a weekend of sledding, snowboarding and staying put. Authorities cautioned against unnecessary driving; airline schedules were in disarray; and commuter trains will be delayed or canceled for many, as the work week begins after a storm that dumped near record snows on the densely populated Washington, D.C., to
New York City corridor. The last flakes fell just before midnight on Saturday, but crews raced the clock all day on Sunday to clear streets and sidewalks devoid of their usual bustle. Ice chunks plunging from the roofs of tall buildings menaced peo-
2 Chinese killed in LaoPDR suspected bombing
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EIJING—Two Chinese citizens have been killed and one injured in a suspected bomb attack in central Lao PDR, China’s official Xinhua News Agency reported on Monday. A mountainous area that in recent months has seen an increase in violence and in years past was the scene of clashes between government forces and the Hmong ethnic minority. The incident took place about 8 a.m. on Sunday in the province of Xaysomboun (pronounced Sai-sum-boon) when the victims, one of whom was employed by a Chinese mining company, were riding in a vehicle, Xinhua reported. Chinese diplomats have visited the survivor, identified by the surname Zhou, and have requested a swift investigation, Xinhua said. An official contacted at the Laos Embassy in Vietnam, the country’s closest ally, said he was unaware of the report. China is a major investor in Laos’s rich abundance of minerals and other natural resources and shares its one-party form of authoritarian communist government. A special Chinese presidential envoy, Song Tao, is due to visit the country this week, Xinhua said. Since November there has been an increase in violence in the province, though the perpetrators have not been identified, nor has the tightly controlled state press provided any details. In a notice posted on its web site, the US Embassy in Laos last November prohibited
its employees from traveling to Xaysomboun province due to what it described as nighttime shooting attacks by unidentified assailants. It said one person was killed on November 17 and another wounded on November 18. The Hmong fought on the side of a pro-American regime during the Vietnam War, and after the communist Pathet Lao took over in 1975, many fled abroad or hid in the jungle. Until a few years ago, there were several small bands of Hmong resisters who continued to hide in the jungle and occasionally clash with security forces, but most eventually surrendered. The US government-funded news service Radio Free Asia (RFA) has reported additional attacks in November, December and January, citing unnamed police and other sources. In the latest reported attack, a bus came under fire on January 14, leaving about a dozen passengers hurt but none killed, RFA said. While RFA’s reports could not be independently confirmed, it has a record of being well-informed about Laotian affairs. In a report forwarded to The Associated Press earlier this month, Hmong sympathizers gave their own version of the recent violence, saying that from mid-November until the end of December, there had been six attacks by government forces on groups of Hmong, killing at least seven and wounding 21. AP
ple who ventured out in Philadelphia and New York. High winds on Manhattan’s Upper West Side kept the snow from entirely swallowing the tiny Mini Cooper of Daniel Bardman, who nervously watched for falling icicles as he dug out. New York Mayor Bill de Blasio encouraged people to leave their plowed-in cars covered with snow all week after a one-day record of 26.6 inches (67.6 centimeters) fell in Central Park. Treacherous conditions remained as people recovered from a storm that dropped snow from the Gulf Coast to New England. At least 30 deaths were blamed on the weather, with shoveling snow and breathing carbon monoxide collectively claiming almost as many lives as car crashes. Broadway reopened after going
12,000 Flights canceled after major airlines stopped operations following the blizzard that dumped near-record snows on the area dark at the last minute during the snowstorm, but museums remained closed in Washington and the House of Representatives postponed votes until February, citing the storm’s impact on travel. Flying remained particularly
messy after nearly 12,000 weekend flights were canceled. Airports resumed limited service in New York City, Baltimore and Philadelphia, which said it got an entire winter’s snow in two days. Washingtonarea airports remained closed on Sunday after the punishing blizzard. Major airlines also canceled hundreds of flights for Monday. Along with clearing snow and ice from facilities and equipment, the operators of airlines, train and transit systems had to figure out how to get snowbound employees to work. Overall snowfall of 26.8 inches (68 cm) in Central Park made it New York’s second-biggest winter storm since records began in 1869, and Saturday’s 26.6 inches (67.6 cm) made for a single-day record in the city. AP
US official: Afghan army ‘rebuilt’ for battle with Taliban
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ABUL, Afghanistan—After months of ferocious fighting, Afghan army units battling the Taliban in southern Helmand province are facing major restructuring and leadership changes, with several key commanders being replaced, a US military official said on Monday. Helmand has been a fierce battleground since last fall, with fighting taking place in 10 districts. At times, the insurgents have laid siege on army bases and threatened to overrun large chunks of territory. Local officials have called for help from central authorities and complained publicly over corruption that includes syphoning off salaries, food, fuel and equipment. US Army Brig. Gen. Wilson Shoffner, the head of public affairs for the US-North Atlantic Treaty Organization (Nato) mission, told The Associated Press that the Afghan army corps in Helmand is now being “rebuilt” and that senior officers are being replaced. The reasons for the changes in the Afghan army’s 215 Maiwand Corps “are a combination of incompetence, corruption and ineffectiveness,” Shoffner said. The corps’ commander has been replaced, along with “some brigade commanders and some key corps staff up to full colonel level,” he said. Helmand is a strategic region for the Taliban, as it borders Pakistan. It grows large quantities of opium, used to produce most of the world’s heroin. The harvest is worth up to $3 billion a year, and helps fund the insurgency. The Afghan Defense Ministry confirmed the changes in Helmand. It said veteran army Gen. Moheen Faqiri was appointed to lead the corps and took over two months ago. Gen. Dawlat Waziri, the ministry’s spokesman, said brigade commanders have also been rotated out and replaced. “Soon, other army units will have new commanders there,” Waziri said. Last October a meeting of the National Security Council (NSC) discussed the worsening situation on the ground. In the presence of President Ashraf Ghani and US Army Gen. John F. Campbell, commander of the US and Nato forces in Afghanistan, the NSC heard that Afghan security forces were badly led, poorly equipped and in the previous three months had suffered 900 casualties, including 300 dead. Minutes of the October 29 meeting, obtained by the AP, show that Helmand was described by the former head of the intelligence agency, Rahmatullah Nabil, as “the biggest recruiting pool for the Taliban” and the insurgents’ “primary source of revenue” from poppy for heroin and marble smuggling. Another concern is the Afghan police who are fighting on the frontlines across Helmand, often without the equipment and backup of the army, which means casualties are higher. Last Wednesday Gen. Abdul Rahman Sarjang, the Helmand provincial police chief, said the Afghan security forces were “exhausted” and in dire need of reinforcements. AP
7 hurt on American Airlines jet; plane diverts to Canada
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AINT JOHN’S, Newfoundland— Seven people were taken to hospital after an American Airlines plane from Miami to Milan made an emergency landing in Newfoundland after the jet briefly encountered severe turbulence. The aircraft landed safely in the East Coast Canadian province late Sunday, where it was met by paramedics. American Airlines Spokesman Ross Feinstein said three flight attendants and four passengers were transported to hospital for further evaluation. He said none of the injuries are life threatening. The seat-belt light was on when the Boeing 767, carrying 192 passengers and 11 crew members, encountered turbulence. At least four ambulances and a fire truck were seen on the tarmac in Saint John’s, Newfoundland. Paramedics rushed toward the plane with stretchers and what appeared to be a backboard. An hour after the plane landed, one ambulance remained. Feinstein said they are working on next steps to get the uninjured passengers to Milan. Sara Norris, a spokesman for Staint John’s airport, said the plane will stay in Saint John’s overnight. AP
AN ambulance departs Saint John’s International Airport on January 24, in Saint John’s, Newfoundland. Several people were taken to hospital after an American Airlines plane from Miami to Milan made an emergency landing after the jet briefly encountered severe turbulence. PAUL DALY/THE CANADIAN PRESS VIA AP
The World BusinessMirror
news@businessmirror.com.ph
Tuesday, January 26, 2016
A9
Deaths blamed on rare cold snap in Taiwan
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AIPEI, Taiwan—An unusually cold weather front has been blamed for killing 57 mostly-elderly people in Taiwan’s greater-Taipei area. The cold wave abruptly pushed temperatures to a 16-year record-low of 4 degree Celsius (39.2° Fahrenheit) in the subtropical capital where most homes lack central heating, causing heart trouble and shortness of breath for many of the victims, a city official said. “In our experience, it’s not the actual temperature but the sudden drop that’s too sudden for people’s circulatory systems,” said a city spokesman who identified himself only by his surname, Chang. The cold snap was blamed for the deaths of 40 people in the capital, Taipei, while the neighboring New Taipei City attributed an additional 17 deaths to the cold weather. Strokes and hypothermia were among the causes of death in New Taipei City, officials there said. Temperatures in Taipei average 16°C (60 degrees F) in January, according to Taiwan’s Central Weather Bureau. Because of the relatively mild norms, most households in Taiwan lack central heating, another suspected factor in the recent deaths.
TOURIST BOAT CAPTAIN TO BE PROBED FOR TRAGEDY OFF NICARAGUA
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ANAGUA, Nicaragua—Nicaragua’s police, army and navy will investigate the captain of a tourist boat and his assistant for the deaths of 13 Costa Rican passengers killed when the vessel capsized in bad weather, a top government official said on Sunday. The “Reina del Caribe,” Spanish for “Caribbean Queen,” was carrying 33 people when it went down on Saturday amid rain and strong winds, as it ferried between the Corn Islands, a popular tourist destination, off Nicaragua’s Caribbean coast. Government spokesman Rosario Murillo clarified on Sunday that the boat was carrying 25 Costa Ricans, two Americans, two British citizens, a Brazilian and three Nicaraguans. Previous reports had said there were 32 people on board including four Americans. All the dead were Costa Ricans, mainly women, Murillo said. “This is a great tragedy, truly painful, because they were our Costa Rican, Central American brothers and sisters who were vacationing in the waters of the Nicaraguan Caribbean,” Murillo said on Saturday. Mario Berrios, the Nicaraguan navy’s commander for the southern Caribbean region, said the boat’s captain was detained because the vessel was not supposed to be sailing during the inclement weather that had been lashing the region for several days. “There was a warning that the weather conditions would be bad, but it appears that was ignored and this tragedy happened,” Berrios said. Authorities had suspended boat launches in the area due to winds reaching 25 to 30 knots (29 miles per hour to 35 mph). On Sunday, Murillo said that Nicaraguan President Daniel Ortega had ordered police, along with the army and navy, to determine who was to blame for the tragedy. She said the captain and his assistant would be legally processed for the 13 deaths. “Everyone is honestly moved and consternated by what has happened, but we also must make sure this doesn’t happen again. Those to blame for this tragedy must be processed... all the established penalties must be applied to those responsible,” she said. Rescue workers on Sunday were still trying to retrieve the bodies of four of the dead Costa Ricans after the ropes on a boat carrying them to land snapped in bad weather. Nicaraguan authorities were working with their Costa Rican counterparts to repatriate bodies late Sunday. AP
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People killed-mostly elderly citizens—in Taiwan’s greater Taipei area because of severely cold weather. New Taipei City said it was providing shelter for 91 homeless people endangered by the cold. The cold front also left 9 centimeters (3.5 inches) of snow on Taipei’s highest peak on Saturday and stranded vehicles as people headed into the mountains to see the snow. The same polar front closed schools on Monday in Hong Kong, where 130 people had been trapped at day earlier on a peak in the city that also seldom gets such cold weather. Hong Kong temperatures reached 3.1° on Sunday. Temperatures in Taipei are forecast to reach 17° on Tuesday. AP
Days after militant attack, Pakistani university reopens
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ESHAWAR, Pakistan—Officials say a northwestern Pakistani university where Islamic militants gunned down 21 students and teachers last week has reopened for classes amid tight security. University official Kabir Khan says classes at the Bacha Khan University in the town of Charsadda resumed on Monday. Police official Iqbal Khan says extra security measures are in place. The attack last Wednesday triggered a gunbattle that lasted for hours until all four militants who took part in the raid were killed. The assault shocked the nation and raised grim memories of the December 2014 massacre in the nearby city of Peshawar where the Taliban killed 150, mostly children. Over the weekend, Pakistani officials said they arrested five suspects on charges of facilitating the Charsadda assault, which was claimed by a breakaway Taliban faction. AP
Israeli doctor: Peres is fine after being rushed to hospital
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FORMER Israeli President Shimon Peres speaks during an interview with The Associated Press in Jerusalem. AP
ERUSALEM—A doctor treating 92-year-old former Israeli President Shimon Peres says he is “doing great” after spending the night in hospital. Peres was rushed to hospital on Sunday night with chest pains, days after he suffered a mild heart attack. Doctors detected an irregular heart rate and Peres was monitored in hospital overnight as a precaution. Peres’s personal physician Raphi Walden told Israeli Army Radio on Monday that Peres’s heart rate had returned to normal. He says it’s not yet clear when Peres would be discharged. Peres, a Noble Peace Prize laureate, completed his seven-year term as president in 2014. He remains active through his non-governmental Peres Center for Peace, which promotes coexistence between Arabs and Jews. In his seven-decade political career, Peres also served three brief stints as prime minister. AP
THIS file image made from video posted on a militant web site on July 5, 2014, purports to show the leader of the Islamic State group, Abu Bakr al-Baghdadi, delivering a sermon at a mosque in Iraq during his first public appearance. AP/MILITANT VIDEO, FILE
Video shows Paris attackers committing earlier IS atrocities
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ARIS—A new video released by the Islamic State (IS) group purports to show the militants who carried out the November 13 attacks in Paris committing atrocities in IS-controlled territory, while plotting the slaughter in the French capital that left 130 people dead and hundreds wounded. The group also threatens to attack Britain. The 17-minute video, which was released on Sunday, shows the extent of the planning that went into the multiple attacks in Paris, which French authorities have said from the beginning were planned in Syria. It is also likely meant to serve as a recruitment tool to rally followers to the extremists’ sinister cause. The video was provided online by the SITE Intelligence Group, which monitors jihadi web sites. All nine militants seen in the video died in the Paris attacks or their aftermath. Seven of the attackers—
four from Belgium and three from France—spoke fluent French. The two others—identified by their noms de guerre as Iraqis—spoke in Arabic. Seven of the militants, including a 20-year-old who was the youngest of the group, were filmed standing behind bound captives, described as “apostates,” who were either beheaded or shot. “Soon on the Champs-Elysees,” says Samy Amimour, who was raised in a Paris suburb near the French national stadium, as he holds a captive’s head aloft. The November 13 attacks targeted a packed concert hall, a restaurant and cafe, and a soccer match at the national stadium. French Foreign Ministry spokesman Romain Nadal said the government is studying the video but would not comment on its contents. France’s Interior Ministry and the Paris prosecu-
tor’s office had no immediate comment. The video was apparently filmed before the men sneaked back into Europe and contains no footage shot by the attackers during the days of terror that began November 13 and ended only last November 18 with the death of Abdelhamid Abbaoud, who was believed to be the leader of the attacks. Abaaoud died in a police raid on an apartment near the Stade de France. Instead, it was assembled from material shot before the men left for Paris, news video and amateur video. The video did not specify where the nine men were filmed, but it was believed to have been in IS-controlled territory in Syria. Abbaoud is seen simply speaking in a room One militant, Brahim Abdeslam, is seen at a makeshift shooting range. Abdeslam, whose brother Salah fled Paris that night and remains at large, blew himself up at a Paris café where
he was the only victim. Salah Abdeslam is not seen in the video. According to the anti-IS activist group Raqqa is Being Slaughtered Silently, Brahim Abdeslam and two other attackers were trained in Raqqa, the extremist group’s stronghold and the capital of its self-proclaimed caliphate. In the video, as in other IS propaganda trying to drive a wedge between European Muslims and their governments, the men say it is a religious duty to join them. They threaten more attacks in Europe, and the footage closes with one of the militants holding a severed head and footage of Cameron giving a speech—with a text in English warning that whoever stands with the unbelievers “will be a target for our swords.” The video was released by Alhayat, the IS group’s media arm. AP
Portugal’s new president demands financial discipline
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ISBON, Portugal—A centerright candidate scored a resounding victory in Portugal’s presidential election on Sunday, warning he would use the largely ceremonial post to prevent the centerleft anti-austerity government from worsening the debt-heavy country’s financial health. Marcelo Rebelo de Sousa, a veteran-moderate politician and law professor, collected more than half the votes against nine rivals. With 99 percent of the votes counted, Rebelo de Sousa won 52 percent, while his nearest rival came in with less than half of that. Rebelo de Sousa will move into the head of state’s riverside pink palace in Lisbon in March, replacing Anibal Cavaco Silva, who has served the maximum of two five-year terms. The president has no executive power, and is largely a figurehead, but can be an influential voice and in a crisis has the power to dissolve Parliament if he feels the country is going off track. A Socialist minority government runs Portugal with the backing of the Communist Party and the radical Left Bloc. The government is trying to pull off a balancing act by ending austerity measures while pledging to continue the financial prudence adopted after Portugal’s €78-billion ($84-billion) bailout in 2011 amid a eurozone financial crisis. The government’s critics say that is a risky policy in Portugal whose
MARCELO REBELO DE SOUSA addresses journalists and supporters after winning Portugal’s presidential election on January 24, in Lisbon. Rebelo de Sousa, a veteran center-right politician who became a popular television personality, recorded an emphatic victory in Portugal’s presidential election on Sunday, collecting more than half of the votes against nine rivals as the Portuguese chose a counterweight to the country’s center-left Socialist government. AP/ARMANDO FRANCA
economy is struggling to gain momentum and where the jobless rate is over 11 percent. Rebelo de Sousa said in his victory speech he expected the government to generate more economic growth “without compromising financial stability.”
At the same time, he promised to be impartial and encourage consensus between political parties, “healing the wounds” of the recent crisis. Prime Minister Antonio Costa vowed his “full cooperation” with the president. Rebelo de Sousa, 67, has had a long
career in the public eye, working as a newspaper editor, a popular media pundit, a junior member of governments since the 1970s, and a former member of the European Parliament. Turnout was low on Sunday at 52 percent after a dull two-week campaign. AP
A10 Tuesday, January 26, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Why Indonesia gets high-speed rail
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HE president of the Philippines jokes about getting run over by a train. The president of Indonesia actually builds a railtransit system. During his presidential campaign in 2014, Joko Widodo vowed to increase government spending for infrastructure and transportation. A plan for a high-speed rail line had been in discussion since 2008, as Japan wanted to export and build its Shinkansen high-speed railway in Indonesia.
After Widodo took office, he halted the project, citing the high cost to the government of the Japanese proposal. However, in April 2015, the Chinese government approached Jakarta with a counterproposal. Widodo traveled to Beijing, as he had previously to Tokyo, to meet personally with the government officials to discuss the proposal. After typical government complications with the bidding and awarding process, Widodo again canceled the project on September 3, 2015. Indonesia’s president felt that the government was still taking on too great a financial burden and risk. Widodo did not want government loan guarantees for the high-speed rail system nor to put the government on the hook for paying for the project. By mid-September, the Chinese government had responded and accepted all the demands of the Indonesian president. Construction of the rail project started this past week. The state-owned China Development Bank will provide 75 percent of the $5.5-billion funding, with the rest coming from the Chinese railway company and an Indonesian consortium. The Indonesian government will not directly provide any money to build the rail system. Several government-owned profit-making companies are involved, but no construction or operating funds will be sourced from the national treasury. The loan will be paid from rail revenues. Fares will still be controlled by existing Indonesian regulatory authorities. The Chinese will also establish other Indonesian private joint ventures to locally produce up to 40 percent of all the equipment for the rail system and provide cost-free technology transfers for the Indonesians to make their own trains. This will include manufacturing for light-rail systems also for export. The Chinese-led consortium will also pay for the building of new and upgrading of existing rail stations. Indonesia will build the first high-speed rail system in the region. The 150-kilometer rail line from Jakarta to Bandung City will be funded through a Chinese loan that will not be guaranteed by the Indonesian government. Several rural areas will be opened up for new development. Direct investment and free rail-technology transfer will make Indonesia a potential exporter of rail equipment to the region. Forty percent of the equipment for the new system will be locally manufactured, creating more jobs. It is amazing what can be accomplished when experienced leadership combined with determination to get infrastructure projects done while leveraging the China-Japan rivalry. Our close relationship with the US gives the Philippines used military equipment that we have to pay to ship here and continuous headlines of “US Companies Eye Investment Opportunities in the Philippines.” Where’s our high-speed rail?
Shaky start, cautious optimism Manny B. Villar
THE ENTREPRENEUR Second of a series
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HAKY doesn’t necessarily mean the Philippine economy will slow down in 2016. On the contrary, the consensus is that growth in terms of GDP will be higher in 2016 compared to 2015, for which earlier forecasts have been downgraded. In its Global Economic Prospects (GEP) report, the World Bank said the economy would grow by 6.4 percent in 2016 on the back of the May elections. The International Monetary Fund (IMF) sees 2016 GDP growth at 6.2 percent, while the United Nations Economic and Social Commission for Asia and the Pacific (Unescap) is expecting growth at 6.3 percent. As I said earlier, we could still hit the 7-percent GDP growth, at least in the first half, as long as the
government continues to ramp up spending. Incidentally, my forecast was followed by the government’s own announcement that it would target 7-percent growth in the first semester. And if the next administration, recognizing the uncertainties in the global economy, maintains an aggressive stance to capitalize on our strengths, we may even sustain above 6-percent growth for the whole year. That, of course, will depend on the economy’s performance in the
PSE: After capitulation John Mangun
OUTSIDE THE BOX
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LL stock-market investors look at price and movement. Some investors look at trading volume. A very few look at time. Conventional thinking about the stock market is linear in that all that matters is the price of an issue. We may consider the trading volume to measure momentum. But, basically, all the average investor cares about is if the price is going up and down, and how much that movement might be. It is only a number.
Yet, we know that in measuring the real world in numbers, the “world” is not flat. Basic linear arithmetic leads to three-dimensional geometry and eventually the study of change —calculus. Time is as critical and necessary to calculating turning points in stockmarket prices as the price itself. Capitulation is a turning point in stock-price movement at a particular level and at a particular time. The capitulation at end 2008/ early 2009 at the 1,850 area on the
stock-market index came as expected at the right price, as that was a critical level in 2005 and 1997. October 2008 saw very heavy volume—a supposed sign of capitulation—but the index was down 24 percent, falling too far too fast. When it hit that price in October 2008, it was too soon and, therefore, the index stayed at the capitulation area for another four months. However, that four-month period saw high volatility, with weekly index changes of 5-percent to even
As I said earlier, we could still hit the 7-percent GDP growth, at least in the first half, as long as the government continues to ramp up spending. Incidentally, my forecast was followed by the government’s own announcement that it would target 7-percent growth in the first semester. first semester. First-half growth is crucial in some ways. For instance, with a new administration in place, a high growth rate in the first half will help boost investor confidence. Traditionally, investors always adopt a wait-and-see attitude during a presidential election; they want to see how the new chief executive will direct the economy. The slowdown in China has affected stock markets around the world, including the Philippines. Fortunately, the China slowdown’s local impact has been mainly limited to the domestic stock market; other sectors of the economy, such
Conventional thinking about the stock market is linear in that all that matters is the price of an issue. We may consider the trading volume to measure momentum. But, basically, all the average investor cares about is if the price is going up and down, and how much that movement might be. It is only a number. 10-percent up and down moves. Therefore, the initial October price drop was not capitulation but a reaction low that then creates “slingshot” price movements that often end up being traps on both the upside and the downside. The week of November 17, 2008, saw the market down 10.7 percent; the following week the index went 11.7 percent higher. By March 2009, the index was back to the November 17, 2008, low with both buyers and sellers being whipsawed around. The end of the capitulation came
as real estate, retail business and the business-process outsourcing industry, continue to enjoy robust growth. These are among the factors that I believe will drive the Philippine economy this year. On the external front, declining oil prices will help offset the impact of the strengthening of the dollar and higher interest rates in the United States. From over $100 a barrel in 2014, world oil prices plunged to below $28 on January 18, the same price level as in 2003. The price drop followed the lifting of sanctions on Iran, which paved the way for higher oil exports from the Islamic Republic at a time when global oil supplies are already outstripping demand. Because of the low oil prices, the public-transport sector in the Philippines has voluntarily petitioned the government to roll back fare rates, which will directly benefit the mass of Filipino consumers. To be continued For comments, e-mail mbv.secretariat@ gmail.com or visit www.mannyvillar.com.ph.
in March 2009 on relatively low volume, and prices started taking off in April 2009. This current price movement is unlikely to be capitulation; it is both too soon and not the right price for an end to this downtrend. Baron Rothschild is credited with saying that “The time to buy is when there’s blood in the streets.” We are not there yet. But it is a good—maybe a great —short-term opportunity to make profits on the slingshot action. It is what happens after the capitulation comes that you need to be focused on. A bottom on the market will then see prices move 20 percent higher but probably not any more than that. Do not hesitate to buy when the bottom hits. However, a monthly close below the capitulation price or a delayed move to that price too late will push prices down 20 percent. The fun of 2016 has just begun. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Mamasapano: Was there a cover-up? Ernesto M. Hilario
ABOUT TOWN
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ESTERDAY, January 25, marked the first anniversary of the Mamasapano massacre where 44 members of the Special Action Force of the Philippine National Police were mowed down by rebels belonging to the Moro Islamic Liberation Front and the Bangsamoro Islamic Freedom Fighters. One year later, families of the Fallen 44 are still hoping that justice would be served for the death of their loved ones, and the nation still awaits closure of a tragic incident that had clearly setback efforts to restore peace in Muslim Mindanao after decades of armed conflict. While the Department of Justice has already filed charges against a number of identified assailants in Mamasapano, it is understandable that police authorities are unwilling to serve the warrants of arrest for rebels believed to be still fully armed and ready to fight. So the quest for closure and justice is still very much alive. The latest Saturday Forum@Annabel’s was full-packed as our main guest, retired Police Chief Supt. Diosdado T. Valeroso, indicated that he had what he described as “critical evidence” that, indeed, there has been an attempt to cover up ultimate responsibility for the botched police operation. Valeroso is one of founders of the Young Officers Union (YOU) that launched a series of coup d’état during the Cory Aquino administration. His last assignment at the time of his retirement in July last year was as deputy chief for Administration of the National Capital Region Police Office. According to Valeroso, he has in his possession a digital audio recording of a conversation between a “highranking” government official and a lawmaker about Mamasapano, and that he received a copy of the recording last Tuesday, via e-mail. The former police official said the 15-minute conversation took place “a day or two” after the incident. The two persons in the audio recording, he said, were talking about a cover-up of Mamasapano to avoid any adverse effect on the pending Bangsamoro basic law (BBL) in Congress. Valeroso declined to name the two persons who were apparently having a face-to-face conversation in the audio recording. He also declined to name the source of the audio recording. He said he would submit the audio recording to the Senate Committee on Public Order and Dangerous Drugs, chaired by Sen. Grace Poe, which is set to reopen the Mamasapano probe tomorrow, January 27. It’s the Senate, he said, that should determine the authenticity of the audio recording by consulting technical experts. It was Senate Minority Leader Juan Ponce Enrile who requested a reopening of the Mamasapano probe. He said he has proof that President Aquino “actively and directly involved himself in the planning and
preparation of Oplan Exodus.” What Enrile and Valeroso would present to the Senate has been the subject of much speculation. Malacañang insists that President Aquino has said everything the public should know about Mamasapano. But if Enrile and Valeroso would be able to come up with the “smoking gun,” or indisputable evidence that Aquino had a direct hand in the events that led to the slaughter of the 44 police commandos, as well as what many believe is a cover-up of what really happened, then, perhaps, a definite closure to Mamasapano could be in the offing. Or is this too much wishful thinking?
Face-off in Manila
AT the sidelines of our Saturday news forum, I managed to ask Party-List Rep. Lito Atienza of Buhay, who is a former mayor of Manila and is now running for senator on the slate of the United Nationalist Alliance (UNA), what he thinks of the three-cornered fight shaping up in the capital city of Manila with incumbent Mayor Joseph Estrada, former Mayor Alfredo Lim and Rep. Amado Bagatsing of Manila trying to court the votes of city residents. Atienza’s fearless forecast is that Manileños would dump Erap’s reelection bid. Why? Because the former president, he said, has not done anything for the city in the past three years. “Hindi nagtatrabaho” is how he described Erap in so many words. “There’s garbage everywhere, the streets are dimly lit,” he said, adding that residents are also up in arms against the unreasonable increase in real-estate taxes. For Atienza, Lim could return to City Hall because he already has a “brand,” having occupied City Hall before. Even if the former senator and mayor is already 86 years old, Atienza believes “Dirty Harry” could stage a surprising comeback once the votes are counted in the May elections. As for Bagatsing, Atienza said the congressman is not likely to win if the latter does not go all-out in the campaign and make himself visible and press flesh in every barangay in the city, instead of calling meetings of local leaders and waiting for them to come to him. E-mail: ernhil@yahoo.com.
Welcoming the Japanese Emperor and Empress Sen. Edgardo J. Angara
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HIS week the Philippines will formally welcome Japanese Emperor Akihito and Empress Michiko for a historic five-day state visit—more than five decades after their majesties first set foot on our shores as Crown Prince and Crown Princess. Their visit coincides with the 60th anniversary of the normalization of Philippine-Japanese diplomatic ties, which have grown closer and deeper after World War II. Despite Manila being the most devastated city after the war, next only to Warsaw, Filipinos appear to be quicker than most to forgive and reconcile with their former enemy. Perhaps, this is because the Philippines and Japan have long maintained good relations as early as colonial times—even before Japan adopted its sakoku policy
of national isolation. As early as the 1600s, around the tail-end of the Ashikaga shogunate, Japanese traders and merchants settled in Luzon, forming a 3,000-strong community in the Manila suburb of Santa Ana. We now call this area Plaza Dilao along Quirino Ave. Between 1903 and 1905, up to
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VERY year, tens of millions of China’s 246 million migrants return home to celebrate the Chinese New Year. It’s the world’s biggest annual migration, and it typically goes off smoothly. This year, however, something’s amiss. Although the holiday doesn’t start until February 8, millions of workers—especially in the construction and electrical-appliance industries—have already returned home due to the country’s slowing economy. For local governments across China, this is raising a tough question: What happens if these laborers don’t go back to work after the holiday?
The concern isn’t a new one. In early 2009, 20 million unemployed migrants returned home for the holidays in the wake of the global financial crisis, raising fears of social unrest. Labor riots did, in fact, take place. But most of the unemployed appear to have gotten back to work when China’s monster stimulus kicked in later that year. This time is notably different.
2,800 Japanese workers and laborers came to the Philippines to help with the construction of Kennon Road, connecting Manila to Baguio City, which the Americans dubbed as the Summer Capital of the Philippines. Some of these construction workers settled in La Trinidad, Benguet, and helped jumpstart the area’s development into the country’s vegetable bowl. By the 1930s, many Japanese nationals immigrated to what would now be Davao City, where they opened up the fertile Davao soil to banana and abaca plantations that today serve the international market. During the 1970s, PhilippineJapanese relations expanded, with Japan becoming a significant source of trade, investment and developmental aid. Through the years, I have witnessed that relationship grow from business to academia and to parliamentary exchange.
In 1988 I initiated the Philippine-Japanese Parliamentarians Association, where members of the Japanese Diet and the Philippine Congress have conducted several exchange visits. Some sensitive social issues between the Philippines and Japan—such as visas for entertainers—were informally resolved through the society. And in 2006, we helped push for the ratification of the JapanPhilippines Economic Partnership Agreement. Trade and investment increased as a result, and Japan’s tightly closed labor market started opening up to Filipinos. Throughout the postwar years, the Philippines and Japan have gradually forged closer relations, despite remembrance of a tragic and cruel past. Emperor Akihito’s and Empress Michiko’s unprecedented visit marks a historical step toward even deeper relations. E-mail: angara.ed@gmail.com.
Why we fight: Now and 10,000 years ago Noah Feldman
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S there a fundamental difference between war fought for reasons of belief and war fought out of self-interest? Is one more primitive than the other, or morally superior?
These deep questions are raised by the finding of a mass grave from 10,000 years ago by the shores of Kenya’s Lake Turkana, now the earliest such site known. They also resonate in the debate about how seriously to engage Islamic State (IS), and whether to employ means of warfare that would actually eliminate the group instead of just contain it. In particular, the fight against IS involves the question of whether it’s good or right to go to war because the enemy is morally so bad. Taken together, the battles of 10,000 years ago and today can help us clarify our answers. The Lake Turkana site reveals about 27 skeletons, which appear to be from people killed in the same attack. (There are 12 complete skeletons, of which 10 clearly show that the person died violently. The evidence for the deaths of the partial skeletons is more circumstantial.) The grave matters to anthropologists because 10,000 years ago, cultivation wasn’t yet practiced anywhere near the site. That means the people who died—and those who killed them—were almost certainly hunter-gatherers. Their weapons included clubs, arrows and embedded stone blades. There’s a legitimate debate to be had about whether the attack is evidence of war or of something
less, like a raid. But that question is less interesting than the debate about exactly why the attackers, whoever they were, killed men, women and young children, and left them where they fell. The archaeologists who excavated the site speculate, on the basis of pottery found in the region, that there may have been surplus food stored, and that the attackers may have come to steal it. Another theory is that the goal was to take captives. No adolescent skeletons were found, suggesting that, perhaps, young people were taken as prisoners. Notice that these ideas assume that some kind of self-interest must’ve been the underlying motive. Of course, we know from recorded history that wars fought for reasons of belief can also involve plunder and the taking of captives. Evidence of these practices isn’t proof of underlying motive. Could people fighting 10,000 years ago have had ideas capable of motivating action? The answer is unquestionably yes. They were fully evolved Homo sapiens, and had been for many millenniums. Religious icons and cave art date back substantially further in the human past. People who hold beliefs and make art can fight and kill for reasons they feel and articulate in language.
China’s migrants go home—and stay there Adam Minter
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Prospects for a 2009-style stimulus are slim. More important, China is on the cusp of a long-term trend of reverse migration back to the countryside. This week, the National Bureau of Statistics reported that the migrant population dropped by 5.68 million in 2015—its first decline in about three decades. Some of that decline is simple demographics, and parallels China’s rapidly shrinking labor force. But much of it is attributable to a slump in the labor-intensive manufacturing sector and a steady improvement in rural economies. These trends haven’t caught authorities completely off-guard: Despite a long-term commitment to urbanization (in 1980 China was 19.6-percent urbanized; today the figure is more than 50 percent), the government has recently directed more attention and money to rural-development projects,
ranging from infrastructure improvement to credit support for the country’s hundreds of millions of farmers. This year, rural per-capita income is expected to exceed 10,000 yuan for the first time, surpassing urban-income growth for the fifth straight year. But just as economics were never the sole reason for moving to the city, many migrants also have noneconomic motives for moving back home, including a desire to care for aging parents left behind and a hunger for uncontaminated food. “The migrant workers are rooted in the countryside,” said Yang Tuan, a prominent sociologist at the China Academy of Social Science, in a September interview. “They have feelings for the land.” She predicted that reverse migration might peak in the next five to 10 years. On balance, that should be good news. It should help alleviate the
Could people fighting 10,000 years ago have had ideas capable of motivating action? The answer is unquestionably yes. They were fully evolved Homo sapiens, and had been for many millenniums. Religious icons and cave art date back substantially further in the human past. People who hold beliefs and make art can fight and kill for reasons they feel and articulate in language. It emerges that these functional, self-interest-based explanations reflect a set of disciplinary assumptions about why humans fight.
It emerges that these functional, self-interest-based explanations reflect a set of disciplinary assumptions about why humans fight. Many students of human behavior think that people act self-interestedly. Even when they speak in terms of ideology or cultural values, this can be described as a proxy for underlying self-interest. In my view, it’s an analytic mistake to think that self-interest always underlies human motivation. Culture and the beliefs that go with it aren’t merely naked reflections of evolutionary impulses. Once humans can think, they can define their own self-interest in ways that might conflict with self-interest narrowly defined. They can act based on moral values, laws and other kids of norms—or against them. This brings us to the fight against IS, whose members are surely motivated by their beliefs, not their self-interest in the ordinary sense. T he countr ies around IS ’s
territory in Syria and Iraq all reject the Sunni militant group’s ideology. But for the most part, they lack the calculus of self-interest that would be required for them to devote troops to the fight. Without those troops, IS has, so far, shown it can continue to exist despite extensive bombing. The exceptions are Kurdish forces, which have fought IS to the extent compatible with their selfinterest in acquiring territory; the Iraqi government, which has some interest in retaking Iraqi cities; and the Syrian regime, which has a selfinterest in staying around in some form. Unfortunately, none of these powers has sufficient capacity or interest to defeat IS altogether. That leaves the US and the European powers. Ideologically, all these abhor IS. But none (so far) thinks its self-interest suffices to go beyond bombing. Is this self-interested stance morally superior to going to war out of hatred for IS and what it stands for? Or morally inferior? Both views can plausibly be sustained. Often it seems that morally inspired war is selfless and, therefore, less likely to be undertaken for bad moral reasons. But following self-interest may keep us out of wars that we fight foolishly, mistakenly believing that we can achieve our moral ends. The upshot is that we must be clear-eyed about why we want to be rid of IS. If our motives are primarily moral, we should keep in mind the risks that we will create unanticipated harm. If, however, our motives are selfinterested, we should be prepared to admit that we can tolerate IS’s continued existence. In 10,000 years, when historians of the future try to untangle our motives for war, let’s hope they can at least say that we knew what they were.
overcrowding in China’s biggest cities and the sharp income disparity between rural and urban areas. Returning migrants tend to be more worldly and wealthy than when they left, as well as more entrepreneurial: The number of people starting new businesses in rural China grew 3.1 percent, year over year, in the first half of 2015. In total, about 2 million migrants have returned home to start businesses. That trend appears to be accelerating: Sichuan Province, China’s leading source of migrant labor, reports that more than 40,000 of its returned migrants have attempted to start businesses over the past year. The government could still do more to help, starting with expanding access to capital via micro-credit programs (returning migrants don’t attract many bankers) and boosting Internet access in rural areas (less than a third of rural inhabitants are
online). Many returning workers will also be looking for training and jobs—not a start-up opportunity. Agriculture, the industry that many of them left behind, is badly in need of modernization, and the government could help by creating agriculturally focused vocational schools that help workers gain entry to China’s nascent but growing agribusiness sector. Long-overdue land reform would also allow farmers to finally choose for themselves how to buy, use and sell their small plots, and, thus, unlock the true value of China’s countryside. Reversing 30 years of demographic trends won’t be easy for China’s cities or its countryside. But the transition itself is a reminder that decades of reform is finally starting to pay off for some of China’s most economically backward regions. That’s worth celebrating this Chinese New Year.
2nd Front Page BusinessMirror
A12 Tuesday, January 26, 2016
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SM hotel unit to focus on mid-range market
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B M. S F. A | Special to the BM
M Hotels and Conventions Corp. is forecasting a profit of at least P271 million in 2016, as it expands its reach in the Philippines by opening more hotels and convention centers. In an interview with the BM, SM Hotels President Elizabeth T. Sy said the company will be focusing on the mid-range market, building more Park Inn by Radisson hotels, because of the “strong demand” for such accommodations. The company just opened its newest Park Inn in the Clark Freeport Zone in Pampanga, a few steps away from SM City Clark. The hotel is a partnership between SM Hotels and the Carlson Rezidor Hotel Group, which is headquartered in Minneapolis and Brussels. “The numbers show there is really a lack of accommodations in the mid-market segment. So we want to focus more on [building] Park Inns, which is more a millennials-minded hotel,” she said. SM Hotels hopes to break ground for a new Park Inn this year in Metro Manila. While SM Hotels officials were coy about the location of the new hotel, an official of Carlson Hotels said it would be at SM North
Edsa in Quezon City. Speaking with select reporters on the sidelines of the Clark property’s launch, Andre de Jong, vice president for operations in Southeast Asia and Pacific for Carlson Hotels Asia Pacific, said the company is also looking at Iloilo City and the South Road Properties in Cebu, where SM opened its newest mall, Seaside City, last November. He also said Carlson is “looking at opportunities, be it resorts, be it Manila,” for its Radisson Blu brand. “Radisson Blu has an excellent reputation in this country because of Radisson Blu Cebu, so yeah, we’re open for business.” For her part, Sy said there was strong demand for the Park Inn brand: “We’re being asked also if we are ready to open in Iloilo…. It has to be in selected malls; we want to stabilize everything, at least know about our segment, then hopefully, roll out faster.” Aside from the Philippines, there
The numbers show there is really a lack of accommodations in the midmarket segment. So we want to focus more on [building] Park Inns, which is more a millennialsminded hotel.” —Sy
are no other countries in Southeast Asia that host Park Inn hotels. In Vietnam, the Carlson Rezidor Group will be building a Radisson Blu, a resort, along Cam Ranh Bay. Meanwhile, SM Hotels Senior Vice President for Operations Peggy Angeles said the company is “easily looking at a 20-percent [net income] growth in 2016, with the coming in of this hotel [Park Inn Clark]. Add in also Conrad Hotel when it starts operating.” Conrad Hotel Manila is SM Hotels’ foray into the luxury
segment, and will be operated in partnership with Hilton Worldwide. The 347-room hotel is scheduled to open by June 2016 at the Mall of Asia (MOA) complex. A report filed with the Philippine Stock Exchange by its parent unit, SM Prime Holdings Inc., showed that SM Hotels earned an unaudited net income of P226.15 million from January to September 2015, a jump of 234 percent from P67.7 million in the same period in 2014. Angeles added that Park Inn by Radisson Davao (202 rooms) is running at an average hotel-occupancy rate of 65 percent, but was running about 100 percent last December. “And Radisson Blu [396 rooms]
has been very successful. As you know, they’re running on their fifth year, and they’re running in the high 70 [percent] all year round. It’s pretty good business. The Apec [Asia-Pacific Economic Cooperation] summit also helped boost occupancy rates,” she noted. Park Inn by Radisson Clark is a 154-room hotel that enjoys a prime location, and is only 10 minutes away from the Clark International Airport. It is centrally located in the city near tourist attractions, museums and historical landmarks. The hotel has a 203-squaremeter meeting room that can accommodate a maximum of 120 guests. The lobby, in keeping with the “Living Room” design theme of
the hotel, allows guests to socialize and provides an intimate space for individuals who wish to unwind by reading or surfing the Internet. The hotel has a swimming pool and gym for recreation. Park Inn by Radisson Clark also offers food lovers a new dining experience through its restaurant called Hues, providing a hip setting in which groups can meet over “exciting” food and beverage (F&B) options, Angeles said. She added that this is the first time that SM Hotels has tapped a concessionaire, in this case, the Max’s Group Inc., to handle the F&B outlet for its Park Inn by Radisson Clark. “We will try it out, see if it works, and if it does, maybe apply to our other hotels,” she said. Getting an outside company to handle the F&B reduces operational costs for SM Hotels and ensures that the food requirements of guests are adequately met, as this is the expertise of Max’s, she further explained. At present, Park Inn Davao operates its own F&B outlet. SM Hotels also owns and operates Taal Vista Hotel (261 rooms) in Tagaytay City; the Pico Sands Hotel (154 rooms) in Hamilo Coast; and the SMX Convention Center at the MOA complex, Taguig, Davao and Bacolod. It also operates trade halls in SM Megamall and SM City Cebu. The trade halls and convention center total 36,137 sq m of exhibition and conference space.