BusinessMirror January 7, 2016

Now in the Philippines

Out in January | Free to BusinessMirror subscribers

MEDIA PARTNER OF THE YEAR

BusinessMirror

UNITED NATIONS

2015 ENVIRONMENTAL MEDIA AWARD LEADERSHIP AWARD 2008

A broader look at today’s business Monday 18, January 2014 Vol. 7, 10 No. 40 Vol. 11 No. 91 Thursday, 2016

www.businessmirror.com.ph

nn

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

Brace for tight power supply in Luzon due to plant outages

B

USINESSES and households should brace for possible brownouts, especially in the second half of 2016, as eight power plants in Luzon with a combined capacity of 4,547.8 megawatts (MW) are scheduled to implement maintenance shutdowns this year.

INSIDE

THE WAY THE YEAR ENDS Show BusinessMirror

www.businessmirror.com.ph

Thursday, January 7, 2016

D3

The way the year ends REELING

TITO GENOVA VALIENTE

titovaliente@yahoo.com

This is the way the world ends... not with a bang but with a whimper

– T.S. E’ “T H M”

N

OW, this is the way the year ends...not with a bang but with a whimper.

As 2015 ended, the world of Philippine cinema closed with the Metro Manila Film Fesitival (MMFF). The fiesta proved to be not a real celebration. The notorious film festival reared its ugly head once more. The root of the problem was not addressed—the selection process that all film entries go through—and, thus, the dismal end results were predictable. Eric Matti was declared the Best Director, while his film, Honor Thy Father, was disqualified from the Best Picture race. It is common enough that the director chosen as the best is not the person behind the film cited as the cream of the crop; it is absurd, however, to have a director compete for the best direction for a film that technically does not exist in the competition.

Technicalities are always the easiest reasons to conjure but not the most logical at all, especially when one is dealing with the arts. Let us make a caveat though: before the present dispensation called the Metro Manila Development Authority (MMDA)—the government agency behind this annual spectacle— people thought of films, especially when their screening is celebrated, as involving artistic endeavors. The debate now is technical. The MMDA has long ago resolved the issue in its mind, which is suspect anyway for its seeming lack of intelligence and understanding—that this December film festival is about the box office. The festivity has nothing to do with artistic excellence but with income and the profits that will go to coffers. It is a movie producer’s dream and a film artist’s nightmare.

When the awards night came, the articulate Erik Matti did not appear but sent an acceptance speech, which lambasted the festival.

As Bettle Midler put it in one of her shows, we could hear the sobs cry in the wilderness for reforms but no one cares to listen. Year in and year out, people who love good films are left pining for these, films that entertain and teach, movies that amuse and also disturb. There is always a delicate balance between quality and appeal, and it is the great struggle of the true film artist that he goes through the pain and conflict of communicating something through the film medium.

The complaint of Erik Matti must be heeded, even as I underscore the fact that the singular Nora Aunor was way ahead of everyone in lamenting the loss of credibility of the MMFF. During the year when Nora’s

Thy Womb was shown, her critics and some others made fun of the poor performance of the Brillante Mendoza film, not realizing that the joke was on the Filipino audience. The movie won and went on to win more international awards for Nora, the film and the filmmaker. Instead of honoring the film in the MMFF by way of subsidy, perhaps, the system in place allowed the movie to be pulled out by money-grubbing theater owners to accommodate in their cinemas brainless and shitty films calibrated to appeal to the lowest common denominator. The words of Nora Aunor as a response to the notion of commercial appeal vis-à-vis quality is classic: she will continue to make good films so long as there are people interested in her movies and what they say about societies and realities. Artists are now feeling what the great actor has said. The sins of the MMFF as a sordid system is getting close to home, and we are now feeling the brunt of a festival that has something to sell but not something to celebrate.

It will take a presidential prerogative to create reform, which is not radical but real. This reform requires us to look at an office that is built to take care of floods and traffic in the metropolis and declare that it has nothing to say about films. As simple as that.

Part of why the year whimpered to its end has got to do with the same MMFF. Whether it was true or not, the ticket swapping is one for the books. It speaks not only of cheating but of being a poor, sore loser. Even film journalists spoke of buying a ticket for a film and getting one with a different name of a film written on it. There was a lot of hee-hawing on the part of the organizing groups. As with any MMFF, there were a few revelations. There was the phenomenal AlDub love team breaking all records for a filmfest opening. The duo also wiped away the supposed box-office supremacy of Vice Ganda. These results just demonstrate how the fortune of some people can change overnight in the world of show business. Over the last three months

Ellen DeGeneres to accept People’s Choice humanitarian award ‘THE PEANUTS MOVIE’ IN THEATERS THIS WEEKEND

THE Golden Globes and Annie Awards 2016 nominee for Best Animated Motion Picture, Snoopy and Charlie Brown The Peanuts Movie (3D) will finally be seen in Philippine theaters starting January 8, from 20th Century Fox with Warner Bros. distributing.

From the imagination of Charles M. Schulz and the creators of the Ice Age films, Snoopy and Charlie Brown The Peanuts Movie is at its core about everyday anxieties we encounter while growing up, going to school and dealing with the perceptions people have about one another. “We took that theme and changed the overall tone of the movie, which resulted in a stronger message, one that both adults and children can relate to,” says Craig Schulz, son of Charles.

The universal appeal of all Peanuts characters— encompassing Charlie Brown’s eternal underdog status, Linus’s heart, Franklin’s philosophy, Marcie’s introspection, Lucy’s crabbiness, Sally’s unrequited affection for her Sweet Babboo Linus, and Snoopy’s many personas—is the reason the strip and its characters have remained relevant as Peanuts celebrates its 65th anniversary with a big-screen debut, and casting the right young actors was to the film’s success.

After an exhausting search, director Steve Martino found his Charlie Brown in 10-year-old, Scarsdale, New York, resident Noah Schnapp. The other young voice talents include Alex Garfin as Linus, Hadley Miller as Lucy and Mariel Sheets as Sally Brown.

of 2015, Alden Richards became the Golden Boy of Philippine entertainment. We are all curious what this year holds for him and Maine “Yaya Dub” Mendoza, the other half of the phenomenal tandem.

There was also a whimper when the year turned around and that was the passing on of a singer who was a musical legend by way of her father—who was the ultimate musical legend. Natalie Cole was a mighty good singer, but the shadow of her father, the incomparable Nat “King” Cole, loomed huge over her celebrity. In an NBC interview, Natalie Cole was quoted as saying she felt she had earned a spot “next to my Dad, not in front, not behind, but just next to him.”

Natalie Cole earned nine Grammys but it was in 1991 when her name soared almost as high as her father with her recording of the latter’s “Unforgettable.”

Natalie sang with the recorded voice of Nat and it was unforgettable.

Natalie Cole died at the age of 65. n

NEW YORK—The National Society of Film Critics has voted Spotlight the best picture of 2015.

Society members who gathered on Sunday at Lincoln Center for the Performing Arts in New York also awarded the film the prize for best screenplay.

The movie chronicles The Boston Globe’s Pulitzer Prize-winning investigation into child abuse in the Catholic Church.

Last month the Los Angeles Film Critics Association named it the best film of the year, and it is a Golden Globe best picture nominee.

The critics also named actor Michael B. Jordan best actor for his role as Adonis Johnson in the seventh Rocky boxing film since 1976.

And Charlotte Rampling was voted best actress for her work in the marital drama 45 Years. AP

SHOW

Kanye West to headline Paradise Music Festival in April IT’S official: the Paradise International Music Festival (Paradise IMF) is gearing up for their first-ever music spectacle in Manila by bringing in one of the most influential names in the international music industry: Kanye West.

To be held on April 9 at the Aseana Open Grounds, Parañaque City, music enthusiasts will be treated to live performances from a wide variety of artists from different genres on a 10-hectare concert ground, with stages set up across

the field for a uniquely immersive concert experience.

West will be performing in the Philippines for the first time ever, leading the pack of international and local names that will be joining the festival. With this scale, Boardworks Media Entertainment co-owner Joshua Ylaya expects fans to come in from all over the world. “We are very much getting ready to make this music festival the biggest yet—it is time to put the Philippines on the map as an

NATIONAL SOCIETY OF FILM CRITICS: ‘SPOTLIGHT’ BEST PICTURE

LOS ANGELES—Ellen DeGeneres is receiving a humanitarian award, and Saint Jude Children’s Research Hospital is reaping the benefits. Producers of the People’s Choice Awards announced on Monday that DeGeneres will be recognized as the Favorite Humanitarian at Wednesday’s ceremony.

The honor comes with a $200,000 donation from Walgreens, which DeGeneres is directing toward the hospital.

She joked that the award “sums me up perfectly as I am both a human and an itarian.”

DeGeneres is also nominated for Favorite Talk Show Host at the fan-voted People’s Choice Awards, which will be presented at the Microsoft Theater in Los Angeles and broadcast on CBS. AP

international music destination.”

Selling over 21 million albums and 100 million digital downloads worldwide, and winning 21 Grammys, West has become one of the most awarded and best-selling artists of all time.

He was named one of Time Magazine’s 100 Most Influential People in the World in 2005, 2011 and 2015. Rolling Stone in 2012 included three of his then five albums in their list of “500 Greatest Albums of All Time.”

D3

“West is well-known for his relentlessness and game-changing feats within the music industry and beyond. In the same fashion, we are here to change the face of the industry in the country.

The world of music in the Philippines has greatly changed over the last decade, and our dream is that we become known as an international destination for music festivals. The fate of our industry is just waiting to be ‘discovered’ by the world and will be one to watch,” Ylaya concluded.

THAT UBER DRIVER MIGHT TRY TO SELL YOU A HOME IN SINGAPORE

Asean

BusinessMirror Editor: Max V. de Leon • Thursday, January 7, 2016 A5

www.businessmirror.com.ph

Are we ready for the AEC? Asean-EU Perspective

HENRY J. SCHUMACHER

O

N November 20, 2007, on the 40th anniversary of the founding of the Association of Southeast Asian Nations (Asean), the heads of government of the 10 member-states formally adopted the Blueprint for the Establishment of the Asean Economic Community (AEC) in 2015.

Under the blueprint, Asean would be transformed into a “single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy.”

Fast-forward eight years and one month, we are no longer looking at a blueprint but rather the concrete reality of a single market and community of 625 million people. The nations have been working through a long list of tasks, from the elimination of import duties, the integration of capital markets, liberalization of skilled labor mobility, to intra-regional connectivity.

The single market has proved successful in drawing attention to the region. Since the blueprint was adopted in 2007, the region’s GDP nearly doubled, from $1.33 trillion to $2.57 trillion in 2014. In that year the Asean economy was the third largest in Asia and the seventh largest in the world.

Total trade also increased $1.6 trillion to $2.5 trillion. Foreign direct investment (FDI) inflows into Asean also rose from $85 billion of 5 percent of global FDI to $136 billion of 11 percent. Gone are the days when investors see Asean as 10 stand-alone economies.

Without doubt, major strides have been taken in the few short years since the blueprint was signed, particularly in streamlining the legislative environment and trade facilitation. Big business has adapted particularly well to the regional environment, with major companies from most of the Asean states having realized the advantages of the single market many years ago.

For them, the AEC means new opportunities and more business growth.

But in a region where the disparities among the member-countries stand out more that the commonalities, many sectors of society are struggling to come to terms with the dawning reality. SMEs, which make up the bulk of businesses and employers in countries across the region, are wondering what will happen when their locally made products face better or cheaper imported goods. Workers in many countries worry if they will still have jobs once better-qualified, multilingual people from the neighboring countries arrive in their country to work.

The reality is that the formation of the AEC on January 1, 2016, is not the goal in and of itself. AEC integration is, rather, an ongoing work-inprogress requiring constant adaption and reinvention in the light of continuous and often unpredictable global change. The full implementation of key measures and the realization of benefits for stakeholders may carry through under the Post-2015 Agenda, which will need the support from all.

The launch of the AEC is, in fact, just the start of the journey for the region’s 10 countries and 625 million people.

That Uber driver might just try to sell you a home in Singapore

W

HEN Billy Loh started in 2008 as a property agent, his profession was seen as a route to wealth in Singapore. Now, he has to know his way around the city to pay the bills.

House Price Index, which tracks 55 global residential markets. During the past year, Singapore developers have managed to sell only about 7,000 new homes, according to SLP International Property Consultants. Sales matched 2014 levels, although they’ve plunged by half since 2013 and by about 68 percent since 2012.

More agents

SINGAPORE also has a relatively large number of property agents compared with the volume of deals. There are over 30,000 registered real-estate agents in the island-state, 10 times the number of monthly property transactions, according to the Institute of Estate Agents. In comparison, there are only 1,840 agents in Australia’s New South Wales state that handle an average of 8,160 monthly transactions in Sydney, according to CoreLogic Inc. Terence Tham, 35, had never seen such a bad year as 2015 in the nine he has worked as a property agent. Last November he decided that he could make better use of his Honda Civic and potentially increase his client network. So he signed up to become a driver for Uber. When Tham is not showing apartments, he is ferrying commuters around the 718-squarekilometer (277 square miles) islandnation. To every passenger he hands out a card promoting his other job.

“This has been one of the worst years for me in the property broking business,” Tham said.

30,000

Loh, 50, is driving for Uber Technologies Inc. in the city- state, where government curbs to cool the market have mired property prices in the longest losing streak in 17 years and transaction volumes have plunged by as much as two-thirds since 2012.

After going half a year without doing any deals, Loh switched to driving and is earning on average S$3,000 ($2,115) a month, one-tenth of the up to S$30,000 commission he could get from a single home sale during the market’s heyday.

“The market is slow because of the cooling measures,” said Loh, as he drove a Toyota Corolla he has been renting since October, when he started driving for Uber. “We have no choice, we have to come up with means to make ends meet.”

While property agents across the globe often juggle alternate jobs in what is a notoriously cyclical business, things look especially dire in Singapore, where home prices fell by the most among the world’s major markets last year. After seven years of government intervention to cool prices in Asia’s second-most expensive housing market, a plunge in sales volumes is hurting real-estate agents

The number of registered realestate agents in Singapore

even more than price declines.

With further declines expected this year, Singapore’s industry group for property agents is offering courses and helping agents get trained in other jobs, such as property management, to help them supplement their income.

Adding skills would enable agents to “at least earn a fixed income rather than only rely on commissions in this market,” said Jeff Foo, president of the Institute of Estate Agents in Singapore. “This has been one of the toughest times for property agents.”

Home prices in Singapore declined 4.3 percent in the 12 months ended September 30, more than in Hong Kong, China, Japan and Australia, according to the Knight Frank Global

Uber, GrabCar

SERVICES such as Uber, which began operating in Singapore in 2013,

and GrabCar, a private-car service created last year by taxi booking app maker GrabTaxi Holdings Pte., are attracting a growing number of property agents, amid the deteriorating market outlook.

The number of rental cars, a proxy for vehicles being used for privatecar services such as Uber, increased 51 percent in the 12 months to November to 27,988, according to statistics from the Land Transport Authority.

The number of driver-partners has grown “exponentially” in less than three years Uber has been operating in Singapore, with a growing number being real-estate agents, according to Chan Park, Uber’s general manager for Southeast Asia.

Primary occupations that are commonly seen among GrabCar drivers are property agents, entrepreneurs and people in the sales line, according to Lim Kell Jay, regional head of GrabCar. After seven months without sales, Ronald Han, 43, began driving a Corolla for Uber last July.

That way, he can retain his old job while earning some income, he said.

Han said he works 50 to 60 hours a week driving to get a net S$2,800 to S$3,200 a month. Tham says he drives his own car, from 6 a.m. until midnight. Net of costs, such as gasoline, maintenance and accidents, he pockets between S$3,000 and S$4,000 a month.

“This is the best trade for a property agent, you see?” Han said. “You can have free time if you have an appointment, so the best is to work as an Uber or a taxi driver.” Bloomberg News

Thailand Post keen Malaysia Airlines lifts ban on baggage after getting criticisms to cross borders M

T

18.7B

HAILAND Post is launching a major expansion of its cross-border trading and ecommerce services for Indochina to become a Thailand Post’s releading regional player by year-end. ported consolidated The state postal en10-month revenue terprise hopes parcel delivery service crossing the Cambodian and Laotian borders to reach Chinese consumers has a bright future, acting president Smorn Terdthampiboon said.

“We’ll be ready to enter Asean Economic Community [AEC] markets following a comprehensive organizational restructuring and effectiveness enhancement schemes,” she said.

Thailand Post joined a meeting with the Universal Postal Union to create competitive interconnected delivery services in the region, particularly to work closely with Cambodia Post and Lao Post due to their huge market potential.

Smorn said Thailand Post expected its parcel delivery service revenue to account for half its revenue in 2016, up from 48 percent in 2015, helped by greater business opportunities stemming from the AEC. Thailand Post reported consolidated 10-month revenue of 18.7 billion baht for a net profit of 2.2 billion.

“We expect consolidated revenue of 22 billion baht for all of 2015, with a profit of 2.4 billion,” she said.

The state enterprise projects a profit of 2.7 billion baht on revenue of 24 billion this year.

Logistics arm Thailand Post Distribution was established in 2014, with registered capital of 350 million baht, to provide logistics solutions throughout Indochina.

Smorn said the state postal enterprise wanted to promote Thailand as a regional logistics hub in Indochina over the next three years.

Thailand Post Distribution focuses on providing logistics service for medical and pharmaceutical businesses, e-commerce and home shopping, banking and financial institutions, multinational companies and border traders.

The logistics market in Thailand accounts for 15 percent to 17 percent of GDP and is growing in emerging industries, especially e-commerce.

“Thailand’s e-commerce market has witnessed at least 20 percent annual growth in recent years, helping our express delivery service to enjoy 15 percent expansion,” she said. MCT

ALAYSIA Airlines said the temporary limits it imposed on checked-in baggage for European flights have been lifted, less than 24 hours after the unprecedented announcement attracted widespread criticism on the Internet.

“All Malaysia Airlines flights from Kuala Lumpur to London, Paris and Amsterdam from tonight, 6 January 2016, will resume flying its normal route,” the carrier said in a statement on its web site. “Normal baggage allowance has also been restored.”

Late Tuesday, the carrier told longhaul passengers they should fly without checked-in luggage on European flights, saying unusually intense headwinds were jeopardizing planes’ ability to reach cities in the continent even with a full load of fuel.

“Based on its current risk assessment, done on a daily basis, the airline is now able to take a shorter route on European flights,” the carrier said in a separate e-mailed statement. “Malaysia Airlines maintains that safety is of utmost priority in its operations and will not hesitate to adjust its flight path based on its daily risk assessment.”

The airline has recently had to operate a longer route to Europe, which—combined with strong headwinds—limited its ability to carry baggage and cargo, Malaysia Air said. The headwinds over the last four days were in excess of 200 knots, which can add up to 15 percent fuel burn on a Boeing Co. 777-200 aircraft, it said. All baggage is being shipped to affected customers in Europe.

“The reasoning has made them look odd, it’s pure stupidity,” said Shukor Yusof, founder of Endau Analytics, an aviation consultancy firm in Malaysia. “It’s ludicrous. Malaysia Airlines have been flying to Europe for decades. Over the last 30 to 40 years was there no bad weather?”

Tuesday’s baggage plan was widely criticized on the Internet.

“Sad to see this Malaysian icon crumble with service excuses like this,” Pat-

ASEAN

IN this May 27, 2015, photo, a ground staff loads luggage to a Malaysia Airlines Boeing 737-800 at the Kuala Lumpur International Airport in Sepang, Malaysia. Malaysia Airlines on Tuesday barred passengers from checking in baggage on flights to Paris and Amsterdam for two days due to “unseasonably strong headwinds” on a longer flight path it is taking. The move affecting Tuesday and Wednesday flights has baffled passengers, who slammed the airline on social media. AP

rick Khoo, who identified himself as a traveler from Kuala Lumpur, wrote in a Facebook posting.

The past two years have been tumultuous for the carrier, starting with the mysterious disappearance of MH370, which went missing in March 2014 while on a flight to Beijing from its base in Kuala Lumpur. The plane’s remains haven’t been found, despite the world’s biggest search for a missing plane. The airline’s web site got hacked, losses mounted and another aircraft was downed in Ukraine.

Malaysia’s government then had to take the airline private, fired employees and appointed a new chief executive to restructure.

As part of the turnaround plan, Chief Executive Officer Christoph Mueller agreed last month on a mammoth deal with Dubai-based Emirates. The plan gave the carrier access to Europe without incurring “monumental losses,” Mueller said in an interview at the time.

Malaysia Air’s no-baggage plan, which wasn’t adopted by any other Asian airline, comes even as global oil prices have declined to around their lowest in a decade.

Singapore Airlines Ltd. increased baggage allowances for all classes starting in November 2013. Passengers flying on Singapore Air’s suites and first class can check in 50 kilograms of bags, those in business class 40 kilograms and economy class 30 kilograms.

Singapore Air and Hong Kong-based Cathay Pacific Airways Ltd. have no plan to change their checked-baggage policies, the carriers said in e-mailed statements.

Malaysia Air initially advised people flying to Europe that the new rule would apply from Tuesday night local time until further notice, before issuing a further advisory suggesting restrictions would be limited to Paris and Amsterdam flights using Boeing Co. 777 planes on Tuesday and Wednesday.

Services to London using long-range

Airbus Group SE A380 superjumbos can operate as normal using a shorter route after the airline updated a “risk-assessment matrix” with new data, it said.

Passengers affected by the moratorium on checked-luggage were to be limited to a single carry-on bag weighing no more than 7 kilograms (15 pounds) in coach and two pieces totaling as much as 14 kilograms in business class and first.

Malaysia Air has been under intense scrutiny since MH370 went missing almost two years ago. Last month the airline began investigating why Auckland’s air-traffic control was provided with a wrong flight plan after the pilot questioned the air route.

The carrier’s “Bucket List” advertisement campaign in September 2014 sparked criticism across social media.

The airline later said it will stop the “inappropriate” campaign in New Zealand and Australia. Bloomberg News

A5

BEWARE OF SPURS

Sports

C1

BusinessMirror

| THURSDAY, JANUARY 7, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

L

OS ANGELES—The Golden State Warriors put their overwhelming firepower on display in a 109-88 win against the lowly Los Angeles Lakers on Tuesday.

The downside for the 33-2 Warriors was that while doing so, Stephen Curry continues to find it difficult to shake off his lower left leg injury.

Klay Thompson scored 36 points, while Curry in three quarters had 17 in the blowout. But the Warriors announced that the reigning Most Valuable Player would not return to action in the fourth quarter after aggravating the injury once again.

Curry ran back down the court limping after appearing to hit his shin on the Lakers’ Roy Hibbert while scoring on a third-quarter lay-up.

Still, after the Warriors called time-out and a team trainer examined Curry, he was able to go right back into the game seemingly without missing a beat. Curry’s fourth three-pointer of the game pushed the Warriors’ lead in the third quarter to 76-55.

Even as the Warriors had Curry hobbling and were missing multiple reserves, the Lakers didn’t stand much of a chance without Kobe Bryant and D’Angelo Russell—two of their top 4 scorers. The Warriors led by as many as 33 points as Thompson hit six three-pointers in the game.

Not many of Thompson’s quarters can measure up to his 37-point outburst last season. But Thompson coming out firing with 22 points in the first against the Lakers was a sight to see.

He was nine-for-14 from the field, including four-for-seven from three-point range. His teammates were well aware of his hot hand and made it their mission to feed him the ball.

The onslaught came on a night when Thompson’s childhood idol, Bryant, sat out a third straight game due to a sore right shoulder. In previous meetings the 37-year-old Bryant had complimented Thompson, passing the torch to one of the best shooting guards of the younger generation.

Thompson was a first-time All-Star last season and could very well be back again this season despite Bryant dominating the sentimental vote in what he has said will be his final season before retiring.

After dealing with an early season back injury, Thompson has come on strong and scored at least 20 points in eight of his past 10 games. After Curry suffered the shin injury last week, Thompson has averaged 32.5 points in the four games since then.

Draymond Green saw his three-game tripledouble streak snapped, but he still racked up nine points, 12 rebounds and five assists. He, too, is playing at an All-Star level while Curry struggles to regain his footing.

And so the Warriors continue to dominate. Late in the first quarter, Thompson’s 20 points were as many as the entire Lakers team at that point.

Jordan Clarkson led the Lakers with 23 points, but their next-highest scorer was Lou Williams with 10 despite going 0-for-seven from the field. Ryan Kelly added 10 points off the bench in garbage time.

The Lakers fell to a Western Conference-worst 8-28. The Oakland Tribune

DALLAS’S Deron Williams (8) is mobbed by his teammates after scoring a threepointer in the final second of the second overtime against the Sacramento Kings on Tuesday. AP

OF SPURS Not only have the San Antonio Spurs won 12 of their past 13 games, they’ve won them in the kind of convincing fashion that makes it clear that this 2015-16 season won’t be a oneteam race.

THE Golden State Warriors’ Jason Thompson slams one in against the Los Angeles Lakers. AP

S A

USA Today

MAGINE being the Golden State Warriors. Thirtyfour games into your title defense, you’ve lost just twice, gone undefeated at home, set a new National Basketball Association (NBA) record for best-ever start (24-0), and still find yourself with unwelcome company in the standings.

Yes, indeed, the San Antonio Spurs—the champions of under-the-radar dominance who are three games back of the league-leading Warriors with a record of 30-6—are at it again. And they’ve been better than ever the past four weeks.

Not only have the Spurs won 12 of their past 13 games, they’ve won them in the kind of convincing fashion that makes it clear that this 2015-2016 season won’t be a one-team race. Their point differential of plus-18.7 during that stretch is more than twice the closest competitor (the Cleveland Cavaliers were a plus-9.3), while their offense (114 points scored per 100 possessions) and defense (94 points allowed per 100) both qualified as the best in the league, as well.

This is rarified air in terms of elite teams getting off to these sorts of starts. According to the Elias Sports Bureau, the last time multiple teams had 30-plus wins

by January 4 was in 1981—when the season started on October 10 rather than October 28. For the Spurs’ part—with Coach Gregg Popovich’s crew having already won the off-season by landing LaMarcus Aldridge and David West in free agency, re-signing Danny Green and convincing Tim Duncan and Manu Ginobili to delay retirement—it’s the kind of seamless transition into this new/old era that should make the rest of the league shudder.

These Spurs don’t fit the definition of a Super Team by the modern-day standards, as the label typically applies to a three-star setup in which Players Four through 15 must find a way to complement the top-tier trio. LeBron James has cornered the market on this approach in recent years, first with the Miami Heat (costarring Dwyane Wade and Chris Bosh) and now with the Cleveland Cavaliers (with Kyrie Irving

I

Williams lifts Mavs vs Kings

and Kevin Love). The evolution of Draymond Green’s offensive game has brought Golden State closer to this formula, too, as he is now carrying a more significant load while starring alongside Stephen Curry and Klay Thompson.

But San Antonio has a more-balanced blend of old and young, with 24-year-old small forward Kawhi Leonard emerging as a serious Most Valuable Player candidate, the 30-year-old Aldridge looking more comfortable by the day, and the usual suspects— Tony Parker, Duncan, Ginobili, Green, Patty Mills, Boris Diaw—doing all they can to create the most collaborative of seasons. As the numbers show, it has been that in every way so far.

Whereas the Warriors have four players taking at least seven shots per game (Curry, Thompson, Green and Harrison Barnes), the Spurs have seven (Leonard, Aldridge, Parker, Ginobili, Duncan, Mills, Green).

There’s no better sign of this stylistic difference than the two teams’ respective leading scorers, as Curry is ranked third in the NBA in attempts per game (19.3) and Leonard (whose scoring has jumped from 16.5 points per game last season to a career-high 20.9 per currently) is tied for 31st (14.9 per).

None of which is to say that one method is better than the other. As those back-to-back Spurs-Heat clashes in the Finals showed in 2013 and 2014, the contrast can make this basketball theater all the more compelling. But as the Spurs get closer to their first Cavs matchup of this season (in San Antonio on January 14) and their first face-off against the Warriors (January 25 in Oakland), the part that’s clear at this point is that game-planning for them will be nothing short of a nightmare.

Aldridge, in particular, is showing more signs every day that he’s fitting into their system (he shot 42.7 percent in the first 15 games and 52.4 percent in the 19 games since). And as their 25-point win over the Milwaukee Bucks on Monday without Parker reminded us, their depth at all positions makes them as dangerous as they come.

The Warriors, and every other team for that matter, had better beware.

D

ALLAS—Deron Williams hit a three-pointer at the buzzer in the second overtime, and the Dallas Mavericks beat Sacramento, 117-116, on Tuesday night for their 22nd consecutive home victory over the Kings.

Williams took an inbounds pass from Devin Harris with 2.3 seconds left, pump faked to get Rudy Gay to fly by him in the left corner and the ball went in after the buzzer sounded.

Dirk Nowitzki hit an earlier three as the Mavericks scored the last eight points after falling behind 116109 with 1:20 left in the second overtime.

DeMarcus Cousins scored 35 for his third straight 30-point game for the Kings, including a buzzer-beating lay-up for a 98-all tie at the end of regulation.

Former Dallas guard Rajon Rondo was out with back spasms in his first visit since an acrimonious split after an ill-fated halfseason with the Mavericks.

The Kings haven’t won a regular-season game in Dallas since February 27, 2003.

Sacramento did win a game in Dallas during a five-game playoff series victory over the Mavericks in 2004.

In Chicago Jimmy Butler had 32 points and a season-high 10 assists to lead Chicago over Milwaukee, 117-106, for its season-best fifth straight win.

Pau Gasol scored 26 points with 11 rebounds, and Taj Gibson added 11 points and 14 boards as the Bulls led the entire way.

Derrick Rose returned to the Bulls after missing three straight games with a sore right hamstring. He showed no effects of the injury and finished with 16 points.

Khris Middleton scored 26 for Milwaukee, and Michael Carter-Williams

SPORTS

had 20 points and 12 assists.

Arron Afflalo and Carmelo Anthony both scored 23 points, and New York almost lost a 16-point lead before holding off Atlanta, 107-101, to give the Knicks their second win over the Hawks in three days.

The Knicks led by 16 in the third quarter but saw the lead reduced to two points in the final minute before Jose Calderon scored on a drive with 18 seconds remaining.

Kristaps Porzingis had 17 points and 11 rebounds for New York. Anthony finished with 11 rebounds and seven assists. Paul Millsap led Atlanta with 19 points. AP

The majority of these facilities will go offline in the July-to-December period. This means power supply—at least in the areas being served by the Manila Electric Co. (Meralco)—could prove tight in the second half of the year.

The utility firm distributes electricity mainly in Metro Manila, Bulacan, Cavite and Rizal, as well as parts of Batangas, Laguna, Quezon and Pampanga. As of September last year, Meralco recorded 5.7 million customers.

Based on the latest 2016 plant outages schedule provided by Meralco to the BM, more than 700 MW of capacity from three power facilities in Batangas are on

C1

4,547.8 MW Power supply that will be lost during the maintenance shutdown of eight power plants in Luzon scheduled outages for the month of August. These are the 190-MW Ilijan combined-cycle power plant 2; the 330-MW Calaca coal-fired thermal power plant 1; and the Santa Rita combined-cycle natural-gas plant Module (Mod) 20, with a generating capacity of 255.7 MW.

ORE Philippine-based f ir ms are look ing to expand their market by acquiring companies overseas, First Metro Investment Corp.

(FMIC) said. These acquisitions are mainly in Southeast Asia, as the regional bloc slowly inches into integrating its economies into one, an executive of the investment bank said.

Executive Vice President Justino Juan Ocampo said they forecast more mergers and acquisitions (M&A) this year. But, this time, according to Ocampo, M&As will not be limited to blue-chip firms or listed

WORKERS of an electric company upgrades an electrical wiring system along Timog Avenue in Quezon City, in preparation for the higher voltage use during summer season. NONOY LACZA

C  A

More local firms to acquire companies overseas–FMIC

M

BEWARE

OVERWHELMING FIREPOWER

B L L

ABOLA: “The existing players are expanding, but it will take time for new players to get into markets like Indonesia and Vietnam, even Malaysia or Thailand. ”

companies at the Philippine Stock Exchange (PSE) but also engaging privately held firms.

UPTICK IN DEMAND TO BOOST 2016 GDP B C U. O

A

10-PERCENT increase in demand for various goods and services will allow the economy to grow by 6 to 6.5 percent this year, a local think tank said on Wednesday.

In a news conference, First Metro Investment Corp.-University of Asia and the Pacific (FMIC-UA&P) Capital Markets Research said, however, that this is a “guarded” forecast given the various constraints on the Philippine economy.

“We remain optimistic but guarded, more reserved, and more attentive to local and inter-

6% to 6.5% GDP growth for 2016, according to local think tank

national developments that seem to hold back the Philippines from taking off as we have hoped in the past year or years,” First Metro Chairman Francisco Sebastian said.

These constraints include the slow growth of developed countries, particularly the United States, China, Japan, and those in the Middle East and Europe.

Sebastian said there are also

infrastructure bottlenecks, particularly in the implementation of projects under the public-private partnership scheme.

He said the economy was plagued by government underspending in the past few years.

This did not bode well for the country’s aim to increase foreign direct investments (FDI).

The growth of agriculture, which Sebastian said makes up a large part of the economy and where many of the poor belong, has also been anemic in recent years.

However, FMIC-UA&P Capital Markets Research’s Vic Abola C  A

S “FMIC,” A

Business group hopes to boost momentum for TPP

HEALTH&FITNESS

L

EADING business groups, often at odds with President Barack Obama, are looking to give momentum to one of his priorities before he leaves office: approval of a trade pact linking 12 nations along the Pacific Rim that make up

PESO EXCHANGE RATES n US 47.0450

40 percent of the world economy.

The Business Roundtable, made up of chief executive officers from large US companies, will endorse the Trans-Pacific Partnership (TPP) agreement on Tuesday. A trade group representing manufacturers did the

same on Monday.

Their influence could make supporters in Congress more eager to take the agreement up in an election year. Senate Majority Leader Mitch McConnell recently urged Obama to hold off on sending the agreement to

Congress before the elections, warning that it didn’t have the votes.

John Engler, president of the Business Roundtable, and a former Republican governor of Michigan, said his organization is hoping Congress will approve the pact before

it heads home for its August recess.

“The hope is to send the signal now that we’re getting pretty comfortable with the agreement and let’s get ready to give it serious consideration,” Engler told the Associated Press.

C  A

n JAPAN 0.3953 n UK 69.0338 n HK 6.0692 n CHINA 7.2202 n SINGAPORE 33.0047 n AUSTRALIA 33.5892 n EU 50.5828 n SAUDI ARABIA 12.5403

Source: BSP (6 January 2016 )

A2 Thursday, January 7, 2016

BMReports BusinessMirror

Brace for tight power supply in Luzon due to plant outages Continued from A1

For September almost 600 MW of powergenerating capacity coming from Santa Rita Module 30 (265.5 MW) and Calaca 1 would be shaved off from the grid.

The 647-MW Sual 1 Power Station in Pangasinan will also be out in October and November this year.

Lawrence Fernandez, Meralco head of Utility Economics, said these are among the plants with which the utility firm has contracts. He said Meralco has no information yet on forced outages.

The company sources its power requirements from a mix of the following: Wholesale Electricity Spot Market (WESM), independent power producers (IPPs), and power supply agreements (PSAs). The latest share of PSAs, IPPs and WESM to Meralco’s total power requirements stood at 49.9 percent, 44.4 percent and 5.7 percent, respectively.

“As mentioned by Mr. Oscar Reyes, the scheduled outages are bunched up in January and the months of August and September, with one unit of Sual going out from October to November,” Fernandez said via e-mail. Reyes is the president of Meralco.

Steelmakers worried

For the steel industry, the scheduled shutdowns highlight the tripartite problem on power that has long hampered the competitiveness of local steel manufacturers.

“There are three equally important dimensions to power: availability, reliability and cost. These must be addressed together and simultaneously to be meaningful. In other words, availability alone won’t do. This has been an old problem that has adversely affected present-day competitiveness, and has discouraged future investments for expansion, upgrading or integration,” Rolando Narciso, member of the Philippine Iron and Steel Institute and former president of National Steel Corp.

These outstanding problems in power aggravate the industry’s dependence on China’s steel products.

“That is why we have, at present, a worrisome level of import dependence [especially

because China is our biggest source] as our country scales up its infrastructure program to 5 percent of its rising GDP. We hope that the next administration will finally address this long-overlooked matter that has been articulated emphatically in the steel industry strategy road maps,” Narciso added.

Shutdown schedule

The following power plants are scheduled to go offline in the second half of the year: San Lorenzo Module 50 (264.80 MW) from June 11 to 12; San Lorenzo Mod. 60 (261.80) from June 18 to 19; and Sta. Rita Mod. 40 (264MW) from June 25-29.

Santa Rita Module 30 on July 2, 3 and on August 27 up to September 30; Santa Rita Module 20 on July 9, 10 and July 23 to August 26; Santa Rita Module 10 (257.3 MW) on July 16,17; Ilijan 2 from July 31 to August 3, August 4 to 26, and August 27 to September 3; Calaca 1 from August 1 to September 14. From October 1 to November 30 this year, Sual 1 will be out for 60 days.

San Lorenzo Module 60 is again scheduled to go offline from October 1 to 5; San Lorenzo Module 50 (264.8 MW) from October 6 to 10; Calaca 2 (330 MW) from November 27 to January 10, 2017; San Lorenzo Module 50 on December 17 and 18; and San Lorenzo Mod.60 on December 24 and 25.

“These are already the adjusted periods, based on the evaluation of the NGCP [National Grid Corp. of the Philippines] in its development of the GOMP [Grid Operating and Maintenance Program] for 2016,” commented Fernandez when asked if the latest data already took into account the rescheduling of powerplant shutdowns.

The NGCP, for its part, said it adheres to the scheduled maintenance activities of the power plants. “If we project a possible deficiency due to the shutdown, we ask them to reschedule to maintain the balance of supply and demand and ensure ample reserve,” it said when sought for comment.

And if the power-plant owners would not comply, the NGCP would seek the assistance of the Department of Energy (DOE).

It can be recalled that Reyes said most of

the scheduled power-plant outages were moved from the first half of 2016 to the second half to assure a stable supply of electricity during the election period. In the data provided by Meralco, there are no power-plant outages scheduled in May. Reyes said peak demand in Luzon is seen to happen after election week, or during the May 14 to 20 period, with 9,365 MW expected as so-called system load.

He said the rescheduled power-plant shutdowns, therefore, “will put some tightness in the market” in the second half of the year. “If schedules change, and there are more overlaps, then that tightness becomes, well, tighter,” Reyes said.

The Meralco chief said unforeseen power outage caused by sudden breakdown of power facilities is another thing to look out for. “We can only hope that there will be no power plants that will suddenly encounter technical problems during the time that most of the power plants are on scheduled shutdown,” Reyes commented.

For the first half of 2016, the following power plants are scheduled for shutdown: Calaca 1 and 2 until January 24 and 15, respectively; Masinloc 1 (315 MW) untilJanuary 31; Santa Rita Module 10 (257.3 MW) until January 3; Santa Rita Module 40 from January 9 and 10; Santa Rita Module 30 on January 16 and 17.

Calaca 1 from February 1-7; Santa Rita Module 10 from February 11-15; Quezon Power Plant (459 MW) from February 16 to March 15; Masinloc 2 (315 MW) fromMarch 1 to 12; and Pagbilao 1 (382 MW) from April 1 to 30.

Preparing for the worst

Meralco continues to prepare for the worst.

In anticipation of tight supply in the grid this year, Reyes said Meralco has started to secure supply contracts for its peaking needs.

“This is the reason we’re doing this,” he said referring to the proposals it received for an interim power supply for summer peaking for a total of 243 MW. Meanwhile, Fernandez said Meralco would pursue the three-pronged approach it did in 2015. “We will encourage energy efficiency among our business and household customers;

prepare the ILP [Interruptible Load Program] participants for possible activation this summer; and contract interim power supply agreements [IPSAs].”

Meralco has maintained about 700 MW to 800 MW of ILP capacity.

Under the ILP, participants are urged to use their own generator sets to ease power demand during peak times.

“These are our main preparations, but this will be subject to the outcome of the meeting of the interagency El Niño Task Force on power that the DOE said it will be convening this January,” Fernandez said.

The DOE, for its part, has been saying that there would be no power outages during the election this year, unless some major power plants suddenly conk out.

Energy Secretary Zenaida Monsada said that based on initial assessment, the extended El Niño would have “minimal impact” on electricity supply in Luzon and the Visayas.

She said it is Mindanao that the DOE is worried about, since the island largely relies on hydroelectricity generated by several plants in the Agus river area in the Lanao provinces.

No brownouts during polls, please Speak er Feliciano Belmonte Jr. said the scheduled shutdown of power plants serving Meralco should not affect the May 9 national and local elections.

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

“The Aquino administration should act on this now because this has become a perennial problem. This should not happen and the DOE should be put to task,” Bayan Muna Rep. Neri Colmenares said.

Kabataan Rep. Terry Ridon said the government should ensure the shutdowns will not be scheduled during the election season, or until all votes had been counted and canvassed and the winners proclaimed. “We should not allow simultaneous shutdowns that might dip supply to critical levels.”

With Jovee Marie N. dela Cruz and Catherine N. Pillas

www.businessmirror.com.ph

FMIC… Continued from a1

“Non-PSEi corporates are looking offshore.

They have very good balance sheets and local currency financing is pretty much available,” Ocampo said, referring to the benchmark 30-company PSEi. “We expect a lot more M&As this year.

We’ve seen this,” he added. “It’s not limited to PSEi corporates but moving down to mid-tier names as a result of the Asean [Association of Southeast Asian Nations] integration.”

Ocampo’s views stem from several acquisitions last year made by several local firms, most of which are listed, and even extended to Western markets where M&As are usual strategies chosen by companies who want to grow their business at a much faster rate.

Last year local fast-food giant Jollibee Foods Corp. acquired the owner of Smashburger for $99 million, while the Spanish unit of Emperador Inc. bought Beam Suntory, the maker of Fundador for €275 million (about P13.8 billion). In 2015, businessman Andrew Tan bought a building in Spain called Torre Espacio for P11.5 billion and the Gokongwei family’s Universal Robina Corp. acquired New Zealand’s Griffin Biscuits for $576 million.

Even mass housing builder 8990 Holdings Inc. has expressed intentions to expand to Malaysia and Tanzania to export both its expertise and products in these markets.

What surprised the market was the mammoth deal by Monde Nissin Corp., the maker of Lucky Me! noodles, when it bought Quorn Foods of the UK for $835.61 million.

Monde Nissin also bought last year Australia’s Menora Foods for $42 million.

“Valuations [of companies] in Europe have been very attractive for local companies. I guess what’s in it for them is that to be able to bring out their products to that market in Europe or Australia or New Zealand in case of URC. They also want to bring in the brands inbound to the Philippines and Asia,” Ocampo said.

Capital markets are rarely used by companies to raise funds solely for the acquisition of another firm overseas due to disclosure requirements by regulators and their shareholders that can easily be known by their competitors.

Companies, however, course their capital fund raising through bank loans in order to mobilize capital at a faster rate than, say an initial public offering or bond issuances. Monde Nissin was helped by Banco de Oro, Bank of the Philippine Islands and Metrobank for its United Kingdom deal.

Several UK Banks, on the other hand, were able to raise their capitalization last year as part of the Basel 3 requirement and relaxation of some rules of the Bangko Sentral ng Pilipinas (BSP).

These deals include Metrobank’s P32-billion stock rights offer in April last year.

Many have already expanded to other Asian nations even before the Asean integration came into effect, but most of them are publicly listed companies. Only a few are privately held, such as Monde Nissin and Liwayway Marketing Corp., the maker of “Oishi” brand of snacks. Liwayway is slowly inching its way into Southeast Asia through its plant in Indonesia.

The C2 brand of bottled juice drink of URC is already famous in Vietnam, while several of its Jack ‘n Jill products, such as Chippy and Potato Chips brands, are available in shelves of many supermarkets across the region.

Ocampo said that, in theory, once a firm acquired another, it needs to build up its cash flows and then the business itself. “Then, of course, you need debt to acquire normally you want to normalize the debt to equity ratio by going to the capital markets,” he said, adding the company has three to five deals that may be complete during the second half of the year.

“MondeNissinisaprimednameaverysuccessful company. If you sell it, if you offer it to people, they will buy it. It is beyond questions,” Ocampo said.

However, he declined to say if FMIC has been talking to Monde Nissin, or if they are planning to list at the PSE. Ocampo also declined to say if Monde Nissin plans other fund-raising activity.

The Philippines, however, is already a latecomer in the M&A scene, as bigger Asean members like Malaysia, Indonesia and Thailand have long been acquiring foreign firms in the past.

Part of the reason the country is tardy is due to how businesses are structured here: most of the large firms are family-owned and are too conservative to go out of the country or use currencies other than the peso. This changed after several years of increased growth in consumption and of the economy as a whole.

Victor Abola, an economist at the University of Asia and the Pacific, however, said he does not see any major movement of local firms expanding operations in the region with the Asean integration under way. “The existing players are expanding and but it will take time for new players to get into markets like Indonesia and Vietnam, even Malaysia or Thailand. These are very competitive markets and I doubt if [new] Philippine companies or industries will enter these markets,” Abola said. VG Cabuag

BMReports BusinessMirror

www.businessmirror.com.ph

Thursday, January 7, 2016 A3

Aquino rejects Poe’s call for Abaya to resign as traffic mess worsens

P

By David Cagahastian, Butch Fernandez & Lorenz Marasigan

RESIDENT Aquino has rejected a call by Sen. Grace Poe to fire Transportation Secretary Joseph Emilio A. Abaya, because the official could effectively address the worsening transport mess.

Com mu n ic at ion Sec ret a r y Herminio B. Coloma Jr. said the Department of Transportation and Communications (DOTC) had been tasked to address the dayto-day issues facing commuters, particularly those raised by Poe in a statement on Wednesday and in her campaign advertisements.

“This situation is critical and the safety of the riding public is in peril,” Poe said in an e-mail to Senate reporters.

The senator also suggested that Abaya be replaced sooner and let Mr. Aquino take over the DOTC and the Metro Rail Transit (MRT) system to produce immediate results.

“With the seemingly nonchalant stance of the DOTC and MRT management in not being up-front about this circumstance, I urge the good President to step in, take control of the DOTC and pull together all the needed [government] resources at its disposal to address the situation.”

She suggested that “President Aquino not wait for Abaya to resign, but to replace him immediately.”

According to Poe, “Five months is an eternity to our riding public.

We have endured more than [three years] of Abaya’s incompetence and shortsightedness.”

When asked to comment on Poe’s call, Abaya said in a text message: “As I have repeatedly said, it is a mere privilege for me to be serving our people.”

But transport expert Rene Santiago said “replacing an incompetent with another one won’t make any difference.”

“The replacement will still be beholden to the Liberal Party cabal.”

Abaya and his team, including Undersecretary Cosette V. Canilao at the [National Economic and Development Authority], should work hard through mid2016 to move forward ongoing expansions and improvements of the Metro Manila light-rail system and the resurrection of the North-South railroad.”–Forbes Uninhabitable

POE said commuters in Metro Manila have to deal with congested trains and heavy road traffic every day.

Poe also referred to news reports quoting John D. Forbes, senior ad-

HEAVY traffic like this has become a normal scene on Metro Manila streets, especially Edsa.

₧3.81 billion

The maintenance contract of Metro Rail Transit 3 awarded to a Filipino-Korean joint venture visor of the American Chamber of Commerce of the Philippines (AmCham), as saying the traffic mess can make Metro Manila “uninhabitable.”

When asked for comments, Forbes said: “Abaya and his team, including Undersecretary Cosette V. Canilao at the [National Economic

and Development Authority], should work hard through mid-2016 to move forward ongoing expansions and improvements of the Metro Manila light-rail system and the resurrection of the North-South railroad.”

According to Coloma, the performance of Abaya and other Cabinet

members are continually evaluated.

“The President has tasked the DOTC and other concerned agencies to address day-to-day problems faced by commuters in the National Capital Region,” Coloma said in a statement.

“Additional transport infrastructure are also being built and planned to provide long-term solutions. Performance of all Cabinet members is being assessed continually by the President as Chief Executive.”

But Poe has said recent breakdowns stranding commuters in MRT lines reflect maintenance issues are not being addressed.

Invoking transparency and accountability, Poe had requested the DOTC to submit to Senate probers for scrutiny details of a P3.81-billion maintenance contract for the MRT 3 earlier awarded to a Filipino-Korean joint venture.

The senator asked DOTC officials

‘Mamasapano reinvestigation will not BOC… rekindle rift between cops, military’

T

By Rene Acosta

HE National Police on Wednesday assured its cooperation in the reinvestigation by the Senate of the January 25, 2015 operation by the Special Action Force (SAF) in Mamasapano, Maguindanao, that resulted in the killing of 44 police commandos by gunmen belonging to the Moro Islamic Liberation Front and other armed groups in the area.

At the same time, the National Police spokesman, Chief Supt. Wilben Mayor, discounted the possibility that the Senate reinvestigation will rekindle the perceived rift between the force and the Armed Forces, the latter having been accused earlier by the former SAF commander, Director Getulio Napenas, of not reinforcing the beleaguered commandos.

“We respect the move of Sen. [Juan Ponce] Enrile and we will fully cooperate with the investigation,” Mayor said, adding he could not comment about the supposed existence of new evidence that warranted the reopening of the investigation, which was conducted last year by the Senate Committee on Illegal Drugs

and Public Order.

“The Armed Forces and the National Police are professional organizations. Despite what happened, we are not distracted by this incident. We cooperate with each other,” Mayor also said.

He said the Mamasapano incident has even prodded the National Police and the military to strengthen their cooperation and work together more closely.

The counterterrorism operation carried out by the SAF in Maguindanao last year bagged Indonesian bomber and Jema’ah Islamiyah leader Zulkifli bin Hir, alias Marwan. His fellow bomber Abdul Bassit Usman escaped, but he was subsequently killed months later, supposedly by members of the MILF. While the operations were successful, 44 SAF members were killed by fighters from the MILF and its breakaway group Bangsamoro Islamic Freedom Fighters and even by members of private armed groups, as the commandos withdrew from the area where Marwan was holed out.

Marwan established his hideout

We respect the move of Sen. [Juan Ponce] Enrile and we will fully cooperate with the investigation.”

—Chief Supt. Wilben Mayor in an area controlled by the MILF. The carnage dommed the passage of the Bangsamoro Basic Law

by Congress.

While the Senate has investigated the debacle and recommended the filing of charges against MILF members and even policemen, including resigned National Police chief Alan Purisima, Enrile claimed that other angles and even evidence were not looked into.

The Senate investigation also held that President Aquino is accountable for the debacle.

Mayor said that while the National Police would cooperate in the new investigation, its current focus is to look after the families of the

slain commandos, including the distribution of their benefits and other assistance to their next of kin.

There have been moves before to award the Medal of Valor, the country’s highest award for gallantry in action, to the killed commandos and some of those who survived the carnage, but this has sputtered after the National Police claimed it was still studying the proposal.

Mayor, however, said promotions are in process while awards, like the Wounded Personnel Medal, have also been given.

Almost one year after the carnage, the relatives of the victims have yet to receive the full benefits and other assistance promised them.

to provide the Public Services Committee a copy of the contract to check that government funds are properly disbursed.

Documents obtained by the committee showed the DoTC, waiving public bidding requirements, awarded the contract to Busan Transportation Corp., Edison Development and Construction, Tramat Mercantile Inc., TMICorp Inc. and Castan Corp. during the Christmas break.

“The reliability of public transportation should be a priority. Potential major problems are waiting to happen with MRT 3. This is likely as there is no more daily maintenance of train brakes and bogey wheels, daily inspection of tracks for cracks, daily testing of signaling as per standard operation procedure in any Metro system,” Poe said. “The situation is critical,” she added.

Continued from a12

The case reached the High Tribunal after Customs Commissioner Alberto Lina and DBM Procurement Service Executive Director Jose Tomas Syquia filed the petition assailing the injunction issued by the trial court.

The injunction enjoined Lina and Syquia from implementing the former’s May 6, 2015 letter aborting the competitive bidding for the computerization program and the May 7, 2015 cancellation issued by Syquia.

The trial court also directed the BOC and the DBM to continue with the remaining procurement process of signing the contract, and to issue to Omniprime the notice to proceed with the project.

It also enjoins the respondents from conducting another bidding to replace the present Customs systems which is the focal point of the case. “[The] petitioner’s right to be awarded with the project is already clear and present, were it not for the cancellation and with abscence of the grounds provided for by law,” the order further stated.

The trial court found merit in Omniprime’s petition for injunctive relief as its rights as a bidder “appear, from the evidence presented” by both parties, to have been “unduly and unfairly violated” by the sudden cancellation of the procurement process for the PNSW 2 project, which is part of Customs’s modern integrated enhanced customs processing system (IECPS).

Omniprime sought redress before the trial court to stop Lina’s decision to cancel the contract, which, it said, has been successfully bidded out

by the DBM. Laywer Harry Roque, counsel for Omniprime, claimed that “one of the five losing bidders in the project, E-Konek, is a company where Lina has a 96.48-percent stake.”

Annabelle Margaroli, president of mobile IT solutions provider Omniprime Marketing Inc., also lodged a plunder complaint against Lina, former Customs Commissioner Guillermo Parayno Jr. and former Deputy Commissioner Primo Aguas for alleged conflict of interest for arbitrarily voiding the contract, which had been approved during the term of former Customs Commissioner John Sevilla.

The IECPS is composed of two consolidated computer programs necessary for the Asean integration. The integrated system, along with a national single window (NSW), is seen as the long-sought, after solution to address smuggling in the Philippines. It establishes a central database system that tracks in real time all customs procedures nationwide.

It aims to be a fully electronic, paperless and human contact-free system of recording and monitoring of Customs transactions.

The NSW consolidates services from all government agencies involved in Customs procedures using international standards. Asean member-states have agreed on a common window system to fast-track cargo clearance as they move toward regional integration.

The system complies to international open communication standards while ensuring that each of the member-countries can exchange data securely and reliably with any trading partners that use international open standards.

A4

BMReports BusinessMirror

Thursday, January 7, 2016

news@businessmirror.com.ph

PHL trade missions seen hauling total sales of $42.5 million in Q1 T

By Catherine N. Pillas

he Department of Trade and Industry’s (DTI) export-trade promotion arm is targeting a total sales haul of $42.5 million for its first-quarter outbound trade missions.

“Our provisional target for the first-quater business-matching missions [spot and negotiated sales] would be a total of $42.5 million [$40 million from the Gulf Cooperation Council/Middle East and $2.5 million from a food fair in Kuala Lumpur]. This is achievable within six months to one year after, the missions,” DTI-Export Marketing Bureau (EMB) Director Senen M. Perlada said. In an e-mail interview, Perlada gave a preview of the agency’s expected inbound business delegations and outbound trade missions for the first four months of the year.

In mid-January, an inbound business delegation from Denmark will be visiting the country, focusing on fishery products and related businesses.

February will see the EMB deploying an outbound businessmatching mission, anchored on Gulf Food, to the Gulf Cooperation Council, comprised of the six states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and

6

Gulf states where the EMB will deploy business-matching missions the United Arab Emirates. Come March Philippine enterprises, in cooperation with the EMB, will participate in the governmentsponsored international food fair, the Malaysia International Halal Showcase (Mihas).

The EMB will be joining Mihas under its Halal Export Industry development program. The EMB assists Philippine Halal certifiers obtain recognition from various Islamic markets, and helps small and medium enterprises to be Halal-certified to be able to

TRADE PROMOTION File photo shows a bazaar in Makati City during the Christmas holidays. The Export Marketing Bureau and the Center for International Trade and Expositions and Missions are set to join foreign trade fairs early this year to help expand the market for Philippine products. ALYSA SALEN export accepted Halal-certified products. The Center for International Trade and Expositions and Missions (Citem), the export promotion arm of the DTI, will also embark on a separate

slate of promotional activities.

“Citem is also joining trade fairs in the first quarter of 2016, such as: the Winter Fancy Food Show in San Francisco in January; in February it will join the AJC International

Gift Show in Tokyo, Ambiente in Frankfurt, International Fashion Showcase in London, the Gulf Food in Dubai, and the Foodex food and beverage trade show in Japan,” Perlada said. From January to

August 2014, the EMB recorded an export sales figure of $226 million for its trade-promotion activities, which covered signature events, overseas trade fairs, offshore- and inbound-business matching.

El Niño is so last year; here comes La Niña to wreak more havoc

A

s the effects of the most severe El Niño in almost 20 years still reverberate around the world, preparations are already under way for La Niña.

Indonesia is set to distribute water pumps to farmers and assessing its rice stockpiles in anticipation of the weather event materializing in October, Agriculture Minister Amran Sulaimantold

reporters in Jakarta on Wednesday. La Niña, sometimes thought of as El Niño’s opposite, typically brings more rainfall to the region, threatening crops with flooding and delaying harvests. Australia says El Niño has peaked and there’s a chance of its counterpart occurring in the second half of the year.

El Niño has hampered cocoa crops in Ivory Coast, curbed the

Uptick in demand to boost 2016 GDP Continued from A1

said domestic demand will be a key factor that will boost GDP growth this year, Abola added that the think tank estimates that domestic demand will likely grow 10 percent this year. This is significantly higher than the historical average of over 6 percent. “ That’s quite high, that’s very high actually. It’s [contributing] to the economy more than external factors. The driver right now, actually for a number of years, has been the domestic market,” Abola said at the sidelines of the news conference.

In 2013 —a lso an elect ion year—domestic demand grew 10.4 percent. Abola said this may be partly due to the demand created in the wake of Supertyphoon Yolanda (international code name Haiyan), particularly in the last quarter of the year. In 2014 and 2015 domestic demand posted a growth of 4.7 percent and 8.5 percent, respectively. Abola said consumption spending will post “strong” growth this year at 6.8 percent, while government spending is expected to

increase by 10 percent. The increase in consumption spending in 2013, 2014 and 2015 were at 5.7 percent, 5.6 percent, and 6.2 percent, respectively.

Government spending, meanwhile, posted a growth of 7.7 percent in 2013; 0.8 percent in 2014; and 8 percent in 2015.

In terms of investments, the think tank said it is expected to grow 18 percent. This includes companies’ spending in the construction sector which is expected to expand by 15 percent this year.

In 2013 and 2014 investment spending grew 29.9 percent and 12 percent, respectively.

FMIC-UA&P Capital Markets Research also said construction spending grew 10.4 percent in 2013; 2.1 percent in 2014; and 15 percent in 2015.

“The Philippine economy will remain healthy in 2016, but we must learn from our experience in 2015. We predicted a very strong growth in almost all sectors in 2015 but there were internal and external developments, as well as long standing structural constraints that kept our growth rate closer to the ground,” Sebastian said.

monsoon in India and forced the Philippines to import more rice.

Indonesia deployed planes last year for artificial rain to help alleviate drought conditions that restricted palm-oil output and exacerbated forest fires that engulfed the region in haze. Based on the 26 El Niño events since 1900, about 50 percent have been followed by a neutral year with 40

percent by La Niña, Australia’s weather bureau said on Tuesday.

Palm oil

“We’ll anticipate early, like we did on drought,” Sulaiman said.

Palm oil output may stagnate or fall about 3 percent this year, according to Bayu Krisnamurthi, the head of the government-appointed Indonesia Estate Crop

Fund for Palmoil. El Niño is a warming in the equatorial Pacific Ocean, while La Niña is a cooling of the waters. Each can impact agricultural markets as farmers contend with too much or too little rain. A large part of the agricultural US tends to dry out during La Niña events, while parts of Australia can be wetter than normal.

The previous La Niña began in 2010 and endured into 2012.

Conditions typically last between 9 months and 12 months, while some episodes may persist for as long as two years, according to the National Oceanic and Atmospheric Administration. Both La Niña and El Niño tend to peak during the Northern Hemisphere winter. Bloomberg News

Business group hopes to boost momentum for TPP Continued from A1

T he trade ag reement took more than five years to stitch together. Participating nations would reduce or eliminate thousands of tariffs that apply to foreign-made goods. The agreement also rolls back regulatory requirements, such as the need to establish an office in a particular country or partner with a local entity, in order to access their markets.

Several presidential candidates in both parties, as well as members of Congress, have panned the TPP since agreement on the deal’s terms was announced last October.

Donald Trump said it’s a “terrible deal.” Democrat Hillary Clinton said “it didn’t meet my standards.”

That’s led to questions about whether Congress would pass the trade pact, even though lawmakers just last year passed legislation designed to speed TPP’s passage without the threat of amendments or filibuster. Support from business groups could ease some lawmakers’ concerns about the political environment.

The trade group representing manufacturers came out with its endorsement on Monday. The group’s president and CEO, Jay Timmons, said that without the

In this May 29, 2015, file photo, President Barack Obama talks with Attorney General Loretta Lynch in the Oval Office of the White House in Washington. AP

agreement, the US would be ceding economic leadership to other global powers, letting them set the rules of economic engagement in the region. The group has frequently clashed with the Obama administration over new environmental regulations and recently sued to stop stricter limits on smogcausing pollution.

Labor unions have come out over whe l m i ng ly a g a i n st t he trade agreement, saying it will drive wages down, and it’s clear

that for Obama to get a legacysetting victory, he’ll have to rely on the Republican party to push the legislation to victory. Engler said he’s confident that the pact would end up getting more votes than the fast-track legislation that passed last year.

He said not all members of the Business Roundtable supported the TPP, but there was broad consensus. “We cannot have a robust economy if the goal is to make things here and sell it to ourselves,”

Engler said. The White House said it welcomed the endorsements and that it showed that companies big and small feel the agreement is vital to their ability to compete globally.

“We look forward to working with Congress to ratify this agreement as soon as possible, so that these job creators can begin to take advantage of the 18,000 tax cuts within the agreement and support more higher-paying American jobs,” White House Spokesman Brandi Hoffine said. AP

Asean

BusinessMirror Editor: Max V. de Leon • Thursday, January 7, 2016 A5

www.businessmirror.com.ph

Are we ready for the AEC? Asean-EU Perspective

HENRY J. SCHUMACHER

O

N November 20, 2007, on the 40th anniversary of the founding of the Association of Southeast Asian Nations (Asean), the heads of government of the 10 member-states formally adopted the Blueprint for the Establishment of the Asean Economic Community (AEC) in 2015.

Under the blueprint, Asean would be transformed into a “single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy.”

Fast-forward eight years and one month, we are no longer looking at a blueprint but rather the concrete reality of a single market and community of 625 million people. The nations have been working through a long list of tasks, from the elimination of import duties, the integration of capital markets, liberalization of skilled labor mobility, to intra-regional connectivity.

The single market has proved successful in drawing attention to the region. Since the blueprint was adopted in 2007, the region’s GDP nearly doubled, from $1.33 trillion to $2.57 trillion in 2014. In that year the Asean economy was the third largest in Asia and the seventh largest in the world.

Total trade also increased $1.6 trillion to $2.5 trillion. Foreign direct investment (FDI) inflows into Asean also rose from $85 billion of 5 percent of global FDI to $136 billion of 11 percent. Gone are the days when investors see Asean as 10 stand-alone economies.

Without doubt, major strides have been taken in the few short years since the blueprint was signed, particularly in streamlining the legislative environment and trade facilitation. Big business has adapted particularly well to the regional environment, with major companies from most of the Asean states having realized the advantages of the single market many years ago.

For them, the AEC means new opportunities and more business growth.

But in a region where the disparities among the member-countries stand out more that the commonalities, many sectors of society are struggling to come to terms with the dawning reality. SMEs, which make up the bulk of businesses and employers in countries across the region, are wondering what will happen when their locally made products face better or cheaper imported goods. Workers in many countries worry if they will still have jobs once better-qualified, multilingual people from the neighboring countries arrive in their country to work.

The reality is that the formation of the AEC on January 1, 2016, is not the goal in and of itself. AEC integration is, rather, an ongoing work-inprogress requiring constant adaption and reinvention in the light of continuous and often unpredictable global change. The full implementation of key measures and the realization of benefits for stakeholders may carry through under the Post-2015 Agenda, which will need the support from all.

The launch of the AEC is, in fact, just the start of the journey for the region’s 10 countries and 625 million people.

That Uber driver might just try to sell you a home in Singapore

W

HEN Billy Loh started in 2008 as a property agent, his profession was seen as a route to wealth in Singapore. Now, he has to know his way around the city to pay the bills.

Loh, 50, is driving for Uber Technologies Inc. in the city- state, where government curbs to cool the market have mired property prices in the longest losing streak in 17 years and transaction volumes have plunged by as much as two-thirds since 2012.

After going half a year without doing any deals, Loh switched to driving and is earning on average S$3,000 ($2,115) a month, one-tenth of the up to S$30,000 commission he could get from a single home sale during the market’s heyday.

“The market is slow because of the cooling measures,” said Loh, as he drove a Toyota Corolla he has been renting since October, when he started driving for Uber. “We have no choice, we have to come up with means to make ends meet.”

While property agents across the globe often juggle alternate jobs in what is a notoriously cyclical business, things look especially dire in Singapore, where home prices fell by the most among the world’s major markets last year. After seven years of government intervention to cool prices in Asia’s second-most expensive housing market, a plunge in sales volumes is hurting real-estate agents

30,000 The number of registered realestate agents in Singapore

even more than price declines.

With further declines expected this year, Singapore’s industry group for property agents is offering courses and helping agents get trained in other jobs, such as property management, to help them supplement their income.

Adding skills would enable agents to “at least earn a fixed income rather than only rely on commissions in this market,” said Jeff Foo, president of the Institute of Estate Agents in Singapore. “This has been one of the toughest times for property agents.”

Home prices in Singapore declined 4.3 percent in the 12 months ended September 30, more than in Hong Kong, China, Japan and Australia, according to the Knight Frank Global

House Price Index, which tracks 55 global residential markets. During the past year, Singapore developers have managed to sell only about 7,000 new homes, according to SLP International Property Consultants. Sales matched 2014 levels, although they’ve plunged by half since 2013 and by about 68 percent since 2012.

More agents

SINGAPORE also has a relatively large number of property agents compared with the volume of deals. There are over 30,000 registered real-estate agents in the island-state, 10 times the number of monthly property transactions, according to the Institute of Estate Agents. In comparison, there are only 1,840 agents in Australia’s New South Wales state that handle an average of 8,160 monthly transactions in Sydney, according to CoreLogic Inc. Terence Tham, 35, had never seen such a bad year as 2015 in the nine he has worked as a property agent. Last November he decided that he could make better use of his Honda Civic and potentially increase his client network. So he signed up to become a driver for Uber. When Tham is not showing apartments, he is ferrying commuters around the 718-squarekilometer (277 square miles) islandnation. To every passenger he hands out a card promoting his other job.

“This has been one of the worst years for me in the property broking business,” Tham said.

Uber, GrabCar

SERVICES such as Uber, which began operating in Singapore in 2013,

and GrabCar, a private-car service created last year by taxi booking app maker GrabTaxi Holdings Pte., are attracting a growing number of property agents, amid the deteriorating market outlook.

The number of rental cars, a proxy for vehicles being used for privatecar services such as Uber, increased 51 percent in the 12 months to November to 27,988, according to statistics from the Land Transport Authority.

The number of driver-partners has grown “exponentially” in less than three years Uber has been operating in Singapore, with a growing number being real-estate agents, according to Chan Park, Uber’s general manager for Southeast Asia.

Primary occupations that are commonly seen among GrabCar drivers are property agents, entrepreneurs and people in the sales line, according to Lim Kell Jay, regional head of GrabCar. After seven months without sales, Ronald Han, 43, began driving a Corolla for Uber last July.

That way, he can retain his old job while earning some income, he said.

Han said he works 50 to 60 hours a week driving to get a net S$2,800 to S$3,200 a month. Tham says he drives his own car, from 6 a.m. until midnight. Net of costs, such as gasoline, maintenance and accidents, he pockets between S$3,000 and S$4,000 a month.

“This is the best trade for a property agent, you see?” Han said. “You can have free time if you have an appointment, so the best is to work as an Uber or a taxi driver.” Bloomberg News

Thailand Post keen Malaysia Airlines lifts ban on baggage after getting criticisms to cross borders M

T

18.7B

HAILAND Post is launching a major expansion of its cross-border trading and ecommerce services for Indochina to become a Thailand Post’s releading regional player by year-end. ported consolidated The state postal en10-month revenue terprise hopes parcel delivery service crossing the Cambodian and Laotian borders to reach Chinese consumers has a bright future, acting president Smorn Terdthampiboon said.

“We’ll be ready to enter Asean Economic Community [AEC] markets following a comprehensive organizational restructuring and effectiveness enhancement schemes,” she said.

Thailand Post joined a meeting with the Universal Postal Union to create competitive interconnected delivery services in the region, particularly to work closely with Cambodia Post and Lao Post due to their huge market potential.

Smorn said Thailand Post expected its parcel delivery service revenue to account for half its revenue in 2016, up from 48 percent in 2015, helped by greater business opportunities stemming from the AEC. Thailand Post reported consolidated 10-month revenue of 18.7 billion baht for a net profit of 2.2 billion.

“We expect consolidated revenue of 22 billion baht for all of 2015, with a profit of 2.4 billion,” she said.

The state enterprise projects a profit of 2.7 billion baht on revenue of 24 billion this year.

Logistics arm Thailand Post Distribution was established in 2014, with registered capital of 350 million baht, to provide logistics solutions throughout Indochina.

Smorn said the state postal enterprise wanted to promote Thailand as a regional logistics hub in Indochina over the next three years.

Thailand Post Distribution focuses on providing logistics service for medical and pharmaceutical businesses, e-commerce and home shopping, banking and financial institutions, multinational companies and border traders.

The logistics market in Thailand accounts for 15 percent to 17 percent of GDP and is growing in emerging industries, especially e-commerce.

“Thailand’s e-commerce market has witnessed at least 20 percent annual growth in recent years, helping our express delivery service to enjoy 15 percent expansion,” she said. MCT

ALAYSIA Airlines said the temporary limits it imposed on checked-in baggage for European flights have been lifted, less than 24 hours after the unprecedented announcement attracted widespread criticism on the Internet.

“All Malaysia Airlines flights from Kuala Lumpur to London, Paris and Amsterdam from tonight, 6 January 2016, will resume flying its normal route,” the carrier said in a statement on its web site. “Normal baggage allowance has also been restored.”

Late Tuesday, the carrier told longhaul passengers they should fly without checked-in luggage on European flights, saying unusually intense headwinds were jeopardizing planes’ ability to reach cities in the continent even with a full load of fuel.

“Based on its current risk assessment, done on a daily basis, the airline is now able to take a shorter route on European flights,” the carrier said in a separate e-mailed statement. “Malaysia Airlines maintains that safety is of utmost priority in its operations and will not hesitate to adjust its flight path based on its daily risk assessment.”

The airline has recently had to operate a longer route to Europe, which—combined with strong headwinds—limited its ability to carry baggage and cargo, Malaysia Air said. The headwinds over the last four days were in excess of 200 knots, which can add up to 15 percent fuel burn on a Boeing Co. 777-200 aircraft, it said. All baggage is being shipped to affected customers in Europe.

“The reasoning has made them look odd, it’s pure stupidity,” said Shukor Yusof, founder of Endau Analytics, an aviation consultancy firm in Malaysia. “It’s ludicrous. Malaysia Airlines have been flying to Europe for decades. Over the last 30 to 40 years was there no bad weather?”

Tuesday’s baggage plan was widely criticized on the Internet.

“Sad to see this Malaysian icon crumble with service excuses like this,” Pat-

IN this May 27, 2015, photo, a ground staff loads luggage to a Malaysia Airlines Boeing 737-800 at the Kuala Lumpur International Airport in Sepang, Malaysia. Malaysia Airlines on Tuesday barred passengers from checking in baggage on flights to Paris and Amsterdam for two days due to “unseasonably strong headwinds” on a longer flight path it is taking. The move affecting Tuesday and Wednesday flights has baffled passengers, who slammed the airline on social media. AP

rick Khoo, who identified himself as a traveler from Kuala Lumpur, wrote in a Facebook posting.

The past two years have been tumultuous for the carrier, starting with the mysterious disappearance of MH370, which went missing in March 2014 while on a flight to Beijing from its base in Kuala Lumpur. The plane’s remains haven’t been found, despite the world’s biggest search for a missing plane. The airline’s web site got hacked, losses mounted and another aircraft was downed in Ukraine.

Malaysia’s government then had to take the airline private, fired employees and appointed a new chief executive to restructure.

As part of the turnaround plan, Chief Executive Officer Christoph Mueller agreed last month on a mammoth deal with Dubai-based Emirates. The plan gave the carrier access to Europe without incurring “monumental losses,” Mueller said in an interview at the time.

Malaysia Air’s no-baggage plan, which wasn’t adopted by any other Asian airline, comes even as global oil prices have declined to around their lowest in a decade.

Singapore Airlines Ltd. increased baggage allowances for all classes starting in November 2013. Passengers flying on Singapore Air’s suites and first class can check in 50 kilograms of bags, those in business class 40 kilograms and economy class 30 kilograms.

Singapore Air and Hong Kong-based Cathay Pacific Airways Ltd. have no plan to change their checked-baggage policies, the carriers said in e-mailed statements.

Malaysia Air initially advised people flying to Europe that the new rule would apply from Tuesday night local time until further notice, before issuing a further advisory suggesting restrictions would be limited to Paris and Amsterdam flights using Boeing Co. 777 planes on Tuesday and Wednesday.

Services to London using long-range

Airbus Group SE A380 superjumbos can operate as normal using a shorter route after the airline updated a “risk-assessment matrix” with new data, it said.

Passengers affected by the moratorium on checked-luggage were to be limited to a single carry-on bag weighing no more than 7 kilograms (15 pounds) in coach and two pieces totaling as much as 14 kilograms in business class and first.

Malaysia Air has been under intense scrutiny since MH370 went missing almost two years ago. Last month the airline began investigating why Auckland’s air-traffic control was provided with a wrong flight plan after the pilot questioned the air route.

The carrier’s “Bucket List” advertisement campaign in September 2014 sparked criticism across social media.

The airline later said it will stop the “inappropriate” campaign in New Zealand and Australia. Bloomberg News

TheBroa

Business

A6 Thursday, January 7, 2016

Eyebrows raised as Abad announces O

By David Cagahastian & Jovee Marie N. dela Cruz

n Monday Budget Secretary Florencio B. Abad made an announcement that had people raising their eyebrows—90 percent of the P3.002-trillion 2016 budget had been effectively released in the first working week of the year.

For Abad, the early release of the bulk of the budget is meant to address the underspending that has plagued the Aquino administration every year, and is widely blamed for the subpar performance of the economy. For some experts, however, Abad’s announcement is a mere rhetoric, misleading and even a signal that the administration’s campaign kitty is ready for use.

With 90 percent of total appropriations already deemed released as of the first week of this month, speculations are rife that government spending this year will be politically motivated—to aid the reelection of administration allies.

These speculations are further stoked by the ruling party’s intransigent refusal to abide by the Supreme Court’s definition of what constitutes savings in the government’s annual budget, as the newly enacted General Appropriations Act (GAA) provides for the “creation” of savings as early as January, which can become a huge war chest for the election at the disposal of the President, who is expected to join the campaign sorties of his chosen successor.

Even the Department of Budget and Management (DBM) admits that the release of 90 percent of the total budget at the beginning of the election year looks suspicious, although this has been so since the adoption for fiscal year 2015 of the DBM’s policy that the annual GAA is already the release document, instead of the graft-prone Special A llotment Release Order (Saro).

Suspicious indeed

“Pangit lang tingnan this year because this is an election year, but this had been done before. The budget is released at the beginning of the year through the GAA so they don’t have to go to the DBM to ask for the release of the Saro, which was the previous practice, which led to underspending, which we want to avoid,” Budget Undersecretary Richard Moya told the BusinessMirror.

Moya explained that “deemed release” to the respective government agencies does not mean that those funds could already be disbursed in full to the payee contractors, since the government would still have to comply with the allowable payments that can be paid to its payee contractors based on the percentage of completion of their projects.

“You cannot frontload all the payments, because the government has to comply with the schedule of payments based on the terms of reference, such as milestone payments on mobilization, and on percentage of completion on the projects. It doesn’t mean that if it’s released early, it would be paid early,” Moya said.

Moya said the policy of doing away with the Saro is meant to speed up the procurement process, since under the old process of releasing fund allocations to government agencies, a particular agency cannot even start with the bidding process until the Saro for that particular project had been approved.

Underspending in 2014 had been blamed for the country’s dismal 6.1-percent GDP growth that year, which was below the already downgraded target range of 6.5 percent to 7.5 percent. Despite the assurances and justification of the DBM for the use of the GAA as release document for the appropriated items in the national

budget, the fears that the budget could be used for political purposes linger, especially with the new definition of what constitutes savings, as provided for in the GAA for both 2015 and 2016.

‘Unconstitutional’

Social Watch Philippines lead convener Leonor Magtolis Briones, a former national treasurer under the Estrada administration, said the redefinition of savings in the 2015 and 2016 GAA is still unconstitutional, since “savings” had already been defined by the Supreme Court (SC) in its decision striking down the Disbursement Acceleration Program (DAP) in 2014.

In the ruling against DAP, the SC interpreted the power to realign savings as given in the Constitution for certain officials to mean only to cover those amounts that can, indeed, be said to be savings as understood by laymen. The SC, in its decision, said savings cannot be declared before the end of the fiscal year.

In the pertinent constitutional provision on the use of the power to augment appropriations from savings, Section 25(5) of Article VI provides that: No law shall be passed authorizing any transfer of appropriations: however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the SC, and the heads of constitutional commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.”

But in the GAA for 2016, savings is defined in Section 73 as the following: “Savings refer to portions or any released appropriations in this Act which have not been obligated as a result of any of the following: “a) Final discontinuance or abandonment of an ongoing program, activity or project [PAP] by the head of agency concerned due to causes not attributable to the fault or negligence of the said agency which would not render it possible for the agency to implement said PAP during the validity of the appropriations; b) Noncommencement of the PAP for which the appropriation is released; c) decreased cost resulting from improved efficiency during the implementation or until the completion by agencies of their PAPs, and; d) Difference between the approved budget for the contract and the contract award price.”

‘Savings’

Briones said this definition of savings makes it very easy for the Executive branch to generate savings even at the beginning of the year, since by January 4, the first working day of the year, some 90 percent of the total appropriations had already been deemed released to the government agencies.

This meant that the appropriations had already been released, which may be declared as savings through the simple expedient of declaring a project as unfit, which would then make that project as being deemed abandoned “due to causes not attributable to the fault or negligence of the said agency,” thus, converting the appropriations for that unfit project as savings, which can be realigned by the President to augment other items under the Executive branch.

Briones said that even in her research on the definition of savings and

how realignment of funds can be done in other countries that practice separation of powers so that each branch may be able to check and balance the powers of the other branches of government, savings is defined as how a layman would define it.

“The definition of savings is that when a project is over and you have money left over. Usually it’s near the end of the year when you will see that there would definitely be some savings. But with the new definition of savings, it’s like saying that since the SC said this is illegal, then we’ll pass a law that will make this mode of creating savings as legal,” she said.

Pros and cons

But Victor A. Abola, professor and program director of the Strategic Business Economics Program at the University of Asia and the Pacific (UA&P), sees this as a good sign.

“When they say ‘released’, they mean they have the Saro already… authorized, meaning they can spend already. And I think they will spend.

The fears that the government will underspend like in the earlier part of the year, in the first half, and last year, the other half, I don’t think is going to happen again, because the Liberal Party really wants to cement its political gains,” Abola said. Former Budget Secretary Benjamin E. Diokno, professor at the University of the Philippines School of Economics, said Abad’s announcement “simply means that P2.7 trillion worth of spending authority has been by released by the DBM, and some P300 billion are being held by the DBM.” “It does not mean that agencies can now disburse the P2.7 trillion. For example, a big chunk of the P2.7 trillion is for salaries and wages. But they can be paid only for actual services, hence, for January, only 1/12 of the allocation for salaries and wages can be disbursed by national agencies.” Also on hold, Diokno said, are the likes of calamity fund and contingency fund, as well as the budget allotted for international commitment funds, or what will be paid to the international organizations, since these are still not due.

This makes the announcement misleading, Diokno said. “It’s a misnomer; it’s not because you were given the money you can already spend it.” As for the projects, he said money cannot be released without the contract. There is still the bidding procedure, evaluation and award.

“Usually you will release 20 percent initially for mobilization. It doesn’t mean since you have the money, you can spend it faster; the bidding procedure is still bureaucratic.”

‘Guard the budget’

Lawmakers urged the public to guard the national budget for 2016, an election year, so the funds will not be used to raise money for the campaign.

“We have to be vigilant that the funds will not be used to raise money for the LP [Liberal Party] campaign or be used to attract politicos to transfer to LP,” Nationalist People’s Coalition Rep. Sherwin Gatchalian of Valenzuela said.

Under the 2016 GA A, the total budget allotted for government agencies and departments is P1.66 trillion, or 55 percent of the P3.002trillion national budget.

According to the DBM, all government departments and agencies are now free to incur obligations by contracting products and services. However, they would still need to secure notices of cash allocation (NCA) from the budget department.

Party-list Rep. Jonathan de la Cruz of Abakada said the public should monitor how much and what are the priority projects of these government agencies.

“This DBM statement is ingenuous, as in the past, this was meant to cover up the agencies’ tendency to hold on to funds without the accompanying notice of cash allocation so they have reason to underspend,” he said.

“If they release and issue an NCA,

this early, we should monitor what agencies are getting priority and what projects are being funded, to ensure that this will not be for quick-release soft operations, which will definitely be used for election,” de la Cruz added.

Abad said the front-loading of government funds was the result of a new policy at the DBM recognizing the GAA as already the release document, vice the old practice of requiring a Saro before actual cash may be released to a government agency.

“Together with the earlier policy adopted, which authorized departments and agencies to advance preprocurement act iv it ies t hat enable them to bid projects shortof-award, this policy will further accelerate the already much-improved pace of government spending. It will also ensure that most projects will be implemented before the beginning of the election ban on March 25,” Abad said. Abad added that the comprehensive release

“It’s a misnomer; given the money already spend it.” —For Benjamin E. Diokno of the budget under the GAA-asRelease Document (GAARD) regime will not only promote faster implementation of programs and projects,

aderLook

sMirror

www.businessmirror.com.ph | Thursday, January 7, 2016

A7

s early release of 90% of 2016 budget

just because you were doesn’t mean you can rmer Budget Secretary it will also sustain the growth momentum from the fourth quarter of 2015 as procurement of infrastructure projects are fast-tracked.

Abad also said the release of 90 percent of the budget for 2016 should also allow most projects to be started before the electionspending ban on March 25, which is 45 days preceding the regular election on May 9.

According to Section 261 of the Omnibus Election Code, among the prohibited acts during the 45 days preceding a regular election are the construction of public works, delivery of materials for public works and

issuance of Treasury warrant or similar devises for a future undertaking chargeable against public funds; and release, disbursement or expenditures of public funds, among others.

Not connected with elections

LP Rep. Romero Quimbo of Marikina, chairman of the House Committee on Ways and Means, said the DBM’s move is not connected with the 2016 national and local elections. “Budget utilization has perennially been an

area of criticism against the government, particularly this one. In the last three years, it has even been blamed as one of the main reasons for the slowdown of growth. That’s precisely why the DBM has been striving to improve the budget release and utilization,” said Quimbo, who is also the spokesman of LP’s daang matuwid senatorial slate.

“A high release rate is very good and indicates an efficient budget department. There is no connection

with the elections. It is a function of good government. It, likewise, shows that the programs in the GAA are appropriate and well-planned considering that they are implemented fast,” he added.

A ccord i ng to t he l aw m a ker, “whoever criticizes the government for its quick ability to release the budget is either ignorant or clearly politically motivated.” Also, Partylist Rep. Sherwin Tugna of Citizens’ Battle Against Corruption said the

early budget releases will speed up the completion of projects and programs of the government.

“This is good news because the agencies have their budgets already to execute their priority programs, for the benefit of the people. As to guarding public funds, being watchful on how public funds are spent is a continuing duty of each and every citizen, including also the COA [Commission on Audit],” he said.

With Cai U. Ordinario

A8

The World BusinessMirror

Thursday, January 7, 2016

news@businessmirror.com.ph

Iraq must walk a fine line amid Iranian, Saudi tensions

B

NORTH Koreans watch a news broadcast on a video screen outside Pyongyang Railway Station in Pyongyang, North Korea, on January 6.

North Korea said on Wednesday it had conducted a hydrogen bomb test, a defiant and surprising move that, if confirmed, would put Pyongyang a big step closer toward improving its still-limited nuclear arsenal. AP

N. Korea says powerful H-bomb test ‘successful’

S

EOUL, South Korea—North Korea said it conducted a powerful hydrogen bomb test on Wednesday, a defiant and surprising move that, if confirmed, would be a huge jump in Pyongyang’s quest to improve its still-limited nuclear arsenal.

A television anchor said in a typically propaganda-heavy statement that the North had tested a “miniaturized” hydrogen bomb, elevating the country’s “nuclear might to the next level” and providing it with a weapon to defend against the US and its other enemies.

The statement said the test was a “perfect success,” and the announcement was celebrated on the streets of Pyongyang, where a large crowd gathered in front of the city’s main train station to watch the test announcement on a big video screen. Some people took videos or photos of the screen on their mobile phones; others applauded and cheered.

In Seoul and elsewhere there was high-level worry, and also some doubt among experts. South Korean President Park Geun-hye ordered her military to bolster its combined defense posture with US forces and called the test a “grave provocation” and “an act that threatens our lives and future.” Japanese Prime Minister Shinzo Abe said, “We absolutely cannot allow this.”

There has long been skepticism

by Washington and nuclear experts about past North Korean claims about H-bombs, which are much more powerful, and much more difficult to make, than atomic bombs.

A confirmed test, however, would be seen as extremely worrying and lead to a strong push for new, tougher sanctions on North Korea at the United Nations.

The Security Council, which is responsible for international sanctions, quickly announced an emergency meeting on North Korea. It would also further worsen already abysmal relations between Pyongyang and its neighbors.

North Korean nuclear tests capture the world’s attention because each new blast is seen as pushing North Korea’s scientists and engineers closer to their goal of building a bomb small enough to place on a missile that can reach the US mainland. A successful H-bomb

test would be a big new step for the North, and the announcement prompted skepticism. Fusion is the main principle behind the hydrogen bomb, which can be hundreds of times more powerful than atomic weapons that use fission. In a hydrogen bomb, radiation from a nuclear fission explosion sets off a fusion reaction responsible for a powerful blast and radioactivity.

Writing in December, after North Korean leader Kim Jong Un bragged of H-bomb capabilities, nuclear expert Jeffrey Lewis noted that building such a bomb “would seem to be a bit of a stretch for the North Koreans.”

But, he wrote on the North Korea-focused 38 North web site, “The North has now had a nuclear weapons program for more than 20 years. This program has yielded three nuclear tests. North Korean nuclear scientists have access to their counterparts in Pakistan, possibly Iran and maybe a few other places. We should not expect that they will test the same fission device over and over again.”

One expert in Seoul said the reported 5.1 magnitude of the quake set off by Wednesday’s test was likely too small to be an Hbomb test. However, the North could have experimented with a “boosted” bomb that uses some nuclear fusion fuel along with more conventional uranium or plutonium fuel, said Jaiki Lee, a professor of nuclear engineering at Seoul’s Hanyang University.

A South Korean lawmaker said the country’s spy agency told him in a private briefing that Pyongyang may not have conducted an H-bomb test given the relatively small size of the seismic wave reported, according to Yonhap news agency.

In Pyongyang, meanwhile, the announcement was greeted with an expected rush of nationalistic pride, and some bewilderment.

Kim Sok Chol, 32, told the Associated Press (AP) that he doesn’t know much about H-bombs, but

5.1 The magnitude of an artificial earthquake recorded after North Korea tested a “miniaturized” hydrogen bomb

added that “Since we have it the US will not attack us.”

University student Ri Sol Yong, 22, said, “If we didn’t have powerful nuclear weapons, we would already have been turned into the slaves of the US” It could take weeks before the true nature of the test is confirmed by outside experts—if they are able to do so at all. North Korea goes to great lengths to conceal its tests by conducting them underground and tightly sealing off tunnels or any other vents though which radioactive residues and blast-related noble gases could escape into the atmosphere.

The United States Air Force has aircraft designed to detect the evidence of a nuclear test, and such aircraft could be deployed from a US base on the Japanese island of Okinawa to search for clues. Japanese media said Tokyo has also mobilized its own reconnaissance aircraft for sorties over the Sea of Japan to try to collect atmospheric data.

Just how big a threat North Korea’s nuclear program currently poses to the outside world is something of a mystery. North Korea is thought to have a handful of rudimentary nuclear bombs and has spent decades trying to perfect a multistage, long-range missile to eventually carry smaller versions of those bombs.

Some analysts say the North hasn’t likely achieved the technology needed to manufacture a miniaturized warhead that could fit on a long-range missile capable of hitting the US mainland. But there is a growing debate on just how far the North has advanced in its secretive nuclear and missile programs. North Korea needs nuclear tests for practical military and political reasons. To build a credible nuclear program, the

North must explode new nuclear devices—including miniaturized ones—so its scientists can continually improve their designs and technology. Nuclear-tipped missiles could then be used as deterrents, and diplomatic bargaining chips, against its enemies—and especially against the United States, which Pyongyang has long pushed to withdraw its troops from the region and to sign a peace treaty formally ending the Korean War. “This is, indeed, a wakeup call,” Lassina Zerbo, the head of the Vienna-based UN Comprehensive Test Ban Treaty Organization, which has a worldwide network of monitoring stations to detect nuclear testing, AP told by phone. “I am convinced it will have repercussions on North Korea and international peace and stability.”

An official from the Korea Metrological Administration, South Korea’s weather agency, said the agency believed the 5.1-magnitude earthquake was caused artificially, based on an analysis of the seismic waves; it originated 49 kilometers (30 miles) north of Kilju, the northeastern area where North Korea’s main nuclear test site is located.

The country conducted all three previous atomic detonations there.

The announcement came as a surprise. North Korea hadn’t conducted a nuclear explosion since early 2013, and leader Kim Jong Un did not mention the country’s nuclear weapons in his New Year’s speech. Some outside analysts speculated that Kim was worried about deteriorating ties with China, the North’s last major ally, which has shown signs of greater frustration at provocations and a possible willingness to allow stronger UN sanctions.

Pyongyang says its nuclear weapons program is necessary to defend itself against the US. North Korea under Kim Jong Un has pledged to bolster its nuclear arsenal unless Washington scraps what Pyongyang calls a hostile policy.

The Korean Peninsula remains technically at war, as the 1950 to 1953 conflict ended in an armistice.

Washington stations more than 28,000 troops in South Korea as a buttress against any North Korean aggression. Tens of thousands more are in nearby Japan.

Six-nation negotiations on dismantling North Korea’s nuclear program in exchange for aid were last held in late 2008 and fell apart in early 2009, when North Korea was led by Kim Jong Un’s father, Kim Jong Il, who died in late 2011. AP

AGHDA D —W h i le ma ny Iraqi Shiites took to the streets in outrage over Saudi Arabia’s execution of a prominent Shiite cleric, the country’s prime minister has had to walk a more cautious line, trying to contain Iraq’s ow n ex plosive sectarian tensions. The execution of Sheikh Nimr al-Nimr has inf lamed the sectarian divide across the region. Shiite-led Iran has been the most vocal in its condemnation, and protesters stormed Saudi diplomatic missions in Iran over the weekend.

That prompted Sunni-led Saudi Arabia to cut diplomatic relations with Iran, and the kingdom’s allies have lined up behind it, either cutting or reducing their ties with Tehran.

The government of Iraq, however, is straining to keep the peace amid the regional tumult.

Iran is a key ally of the Shiiteled government in Baghdad, has helped it in the fight against the Islamic State (IS) group, and supports powerful Shiite militias in the country.

At the same time, as the fight against IS extremists enters its second year, Iraq is grappling with the worst political and security crises since the withdrawal of US troops in 2011. Only last week, Saudi Arabia sent an ambassador to Baghdad for the first time in 25 years to try to improve its relationship with Iraq.

In Washington, Brett McGurk, special presidential envoy for the Global Coalition to Counter Islamic State of Iraq and the Levant, said US Secretary of State John F. Kerry spent most of Monday on the phone trying to ease tensions in the region.

“We are encouraging a de-escalation, because any time you have regional polarization, regional escalation, it obviously can cause difficulties and it opens up seams for extremists on all sides to take advantage of the situation,” McGurk told reporters on Tuesday.

In a sign of the Iraqi government’s caution, Prime Minister Haider al-Abadi issued a statement expressing regret over al-Nimr’s execution and warning that such actions would “bring more destruction and devastation.”

His office followed that on Tuesday with a call for unity among Iraqis. Regional tensions should be faced “wisely, responsibly and rationally in order to preserve the security and stability of Iraq,” according to a statement

from al-Abadi’s office.

A day earlier, thousands of Shiites gathered a few hundred meters (yards) from his office and called for the government to sever diplomatic ties with Riyadh. The protesters, supporters of prominent Shiite cleric Muqtada al-Sadr, chanted that al-Nimr’s blood had not been spilled in vain and that the Mahdi Army, Sadr’s disbanded Shiite militia, would avenge his death if needed.

That points to the government’s bigger fear: that the regional dispute over al-Nimr’s execution will turn into new violence between Iraq’s Shiites and Sunnis.

Sectarian violence has quickly spiraled out of control in Iraq in the recent past, and a renewed form could disrupt Baghdad’s campaign against the IS group, the Sunni extremists who control large parts of the north and west of the country.

Iranian-backed Shiite militias, whose might rivals that of the military and security forces, have been a major factor in the fight, and the government has already had to cede them considerable authority. At the same time, al-Abadi has sought to encourage reconciliation with the Sunni minority, among whom hatred of the militias is strong, and include Sunnis in the fight against IS. “This is the last thing [al-Abadi] needs after the high point in Ramadi,” said Kirk Sowell, publisher of the Inside Iraqi Politics newsletter, referring to the recent government victory pushing IS fighters out of the western Iraqi city.

While al-Nimr’s execution is unlikely to change Iraq-Saudi policy in any meaningful way, it does have the potential to set off violence in Iraq, Sowell said. Two Sunni mosques were attacked in the southern town of Hilla in apparent retaliation for the execution, but al-Abadi was quick to blame IS and order a buildup of security in the province.

A group of powerful Shiite militias with strong ties to Iran, including Asaib al-Haq and the Bad r Br igade, demanded t he government cut diplomatic ties with the kingdom, expel the ambassador and execute all Saudis held in Iraqi prisons on charges of terrorism.

Acceding to their demands risks disillusioning Sunnis, who already accuse the government of being too beholden to the militias and who often see neighboring Sunni powerhouses like Jordan, Qatar and Saudi Arabia as allies. AP

Britain accused of security lapse in case of jihadi who absconded

L

ONDON— Opposition members of Pa rl i a ment criticized the British government on Tuesday for failing to prevent a man charged with serious crimes from traveling to Syria to join Islamic State (IS) extremists. The accusations came after British news media reports that a man who appeared in an IS video posted on Sunday, in which five purported spies were shot dead might be Siddhartha Dhar, also known by his Muslim name Abu Rumaysah.

W hile nobody has provided a firm link between Dhar and the video, the Labour Party spokesman on terrorism said either way the government failed to properly monitor Dhar after he was freed on bail in 2014. Andy Burnham told Parliament that a letter asking Dhar to surrender his passport was sent after he had already left for Syria. “The system failed because it allowed him to go to Syria, even though he was well-known to authorities and had been arrested six times on terrorrelated offenses,” Burnham said.

Dhar, a Hindu who converted to Islam, taunted British authorities

after his arrival in Syria, posting a photo of himself on social media with his baby son in one arm and an AK-47 assault rifle in the other. “What a shoddy security system Britain must have to allow me to breeze through Europe,” he tweeted. Although the possible link to the video has brought renewed scrutiny on Dhar, his sister said she isn’t sure he’s the man in the video and some who knew him in Britain say they can’t be positive it’s him.

Official confirmation is unlikely; Helen Bower, spokesman for Prime Minister David Cameron, said officials won’t comment on the identities of the people involved. The masked figure in the video appears to have stepped into the role formerly played by British citizen Mohammed Emwazi, who was killed by a drone strike in November after taking part in a series of beheading videos that earned him the nickname “Jihadi John.” Meanwhile, London’s mayor said a small child shown threatening non-Muslims in the same video should be taken from his parents if the family ever returns to Britain. AP

news@businessmirror.com.ph

The World BusinessMirror

Thursday, January 7, 2016

A9

An emotional Obama unveils his plan to cut gun violence

W

ASHINGTON—President Barack Obama, with tears streaking his cheeks, launched a final-year push on Tuesday to tighten sales of firearms in the US, using his presidential powers in the absence of tougher-gun restrictions that Congress has refused to pass.

The President struck a combative tone as he came out with plans for expanded background checks and other modest measures that have drawn criticism from gun-rights groups, which Obama accused of making Congress their hostage. Palpable, too, was Obama’s extreme frustration at having made such little progress on gun control since the killing of 20 elementary-school children in Connecticut shocked the nation more than three years ago.

“First-graders,” Obama said woefully, resting his chin on his hand and wiping away tears as he recalled the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut. “Every time I think about those kids, it gets me mad.”

Obama’s 10-point plan to keep guns from those who shouldn’t have them marked a concession by the president: He’ll leave office without securing the new guncontrol laws he’s repeatedly and desperately implored Congress to pass. Although Obama, acting alone, can take action around the margins, only Congress can enact more sweeping changes that guncontrol advocates say are the only way to truly stem the frequency of mass shootings.

“It won’t happen overnight,” Obama said. “It won’t happen during this Congress. It won’t happen during my presidency.” But, he added optimistically, “a lot of things don’t happen overnight.”

The National Rifle Association, the largest-gun rights lobbying group, panned Obama’s plan and said it was “ripe for abuse,” although the group didn’t specify what steps, if any, it will take to oppose or try to block it. The centerpiece of Obama’s plan is an attempt to narrow the loophole that exempts gun sales from background checks if the seller isn’t a federal registered dealer.

With new federal “guidance,” the administration is clarifying that even those who sell just a few weapons at gun shows, flea markets or online can be deemed dealers and required to conduct checks on prospective buyers.

Whether that step can make a significant dent in unregulated gun sales is an open question, and one not easily answered.

Millions of guns are sold annually in informal settings outside of gun shops, including many through private sales arranged online. But

the Obama administration acknowledged it couldn’t quantify how many gun sales would be newly subjected to background checks, nor how many currently unregistered-gun sellers would have to obtain a license.

Easily reversible by a future president, the government’s guidance to gun sellers lacks the impact of a new law, such as the one Obama and like-minded lawmakers tried but failed to pass in 2013 in the wake of the Sandy Hook massacre.

What’s more, none of the steps would have probably prevented any of the recent mass shootings that Obama invoked in the East Room, including those in Aurora, Colorado, Charleston, South Carolina and Newtown. Obama defiantly rejected that critique, dismissing it as the tired trope of gun lobbyists who question “why bother trying?”

“I reject that thinking,” Obama said. “We maybe can’t save everybody, but we could save some.”

Hoping to give the issue a human face, the White House assembled a cross-section of Americans affected by searing recent gun tragedies.

Mark Barden, whose son was shot to death at Sandy Hook, introduced the President with a declaration that “we are better than this.”

Obama readily conceded the executive steps will be challenged in court, a prediction quickly echoed

by Republicans. The White House expressed confidence Obama was acting legally, and said Justice Department and White House lawyers had worked diligently to ensure the steps were watertight.

Other new steps include 230 new examiners the Federal Bureau of Investigation will hire to process background checks, aiming to prevent delays that enabled the accused gunman who killed nine people at a historic black church in Charleston, South Carolina, to get a gun when the government took too long. Obama is also asking Congress for $500 million to improve mental health care.

Obama’s announcement carved a predictably partisan fault line through the presidential campaign.

Hillar y Clinton and Bernie Sanders, both competing for the nomination from Obama’s Democratic party, pledged to build on his actions if elected. The Republican field formed a chorus of voices vowing to annul the whole package, with Marco Rubio claiming “Obama is obsessed with undermining the Second Amendment.” That amendment to the US Constitution guarantees the right to bear arms. “Rather than focus on criminals and terrorists, he goes after the most law-abiding of citizens,” said House Speaker Paul Ryan, a Republican. “His words and actions amount to a form of intimidation that undermines liberty.” AP

Latvian who cowrote global computer virus can go home

N

EW YOR K—A Lat v ian computer-code writer, who admitted a role in spreading a virus to more than a million computers worldwide, including some at The National Aeronautics and Space Administration (Nasa), can return home after serving 20 months in prison.

Deniss Calovskis, 30, was sentenced Tuesday to time served.

Calovskis, who pleaded guilty last summer to conspiring to commit computer intrusion, was not immediately freed because his extradition to the United States to face charges means he must be returned by authorities to Latvia.

US District Judge Kimba Wood in Manhattan said she was impressed by his rehabilitation and wanted to ensure he was credited for more than 10 months he spent in a Latvian prison before he was sent to the US. His plea agreement had called for him to face

18 months to two years in prison for his role in creating and distributing a virus that infected between 17,000 and 40,000 US computers, including 190 at NASA, from 2005 to 2012. Authorities said it reached more than 1 million computers across the world.

Prosecutors said in court papers that Calovskis was responsible in the conspiracy for developing computer code that deceived people into divulging personal information when they accessed particular banking web sites.

“Rather than using his codewriting capability productively, he instead sold it to help others carry out a massive worldwide heist of personal banking information,” Assistant US Atty. Daniel Tehrani wrote. Defense David Bertan told the judge that Calovskis was motivated to join the conspiracy to make money during a downturn in Latvia’s economy. AP

SAUDI security forces stand guard outside a hotel where Syrian opposition groups held talks in Riyadh, Saudi Arabia, last December 10. Saudi Arabia’s Foreign Minister Adel al-Jubeir has issued a fresh call for Syrian President Bashar al-Assad to step down through negotiations or else be forcibly removed from power, as Syrian opposition groups held talks in the Saudi capital Riyadh. AP

US sees Assad staying in Syria until March ’17

W

ASHINGTON—The Obama administration’s best-case scenario for political transition in Syria does not foresee Bashar alAssad stepping down as the country’s leader before March 2017, outlasting Barack Obama’s presidency by at least two months, according to a document obtained by The Associated Press (AP).

An internal timeline prepared for US officials dealing with the Syria crisis sets an unspecified date in March next year for Assad to “relinquish” his position as president and for his “inner circle” to depart. That would be more than five years after Obama first called for Assad to leave.

The timeline is based on a broad UN-endorsed plan that was initially laid out at an international conference in Vienna last November. Syria, according to that strategy, would hold elections for a new president and parliament in August 2017—some 19 months from now. In the interim Syria would be run by a transitional governing body.

Countless hurdles lie ahead for this latest blueprint for ending five years of conflict that has killed more than a quarter-million people, created the worst refugee crisis in Europe since World War II and allowed the Islamic State (IS) group to carve out a would-be caliphate across parts of Iraq and Syria.

Not the least of those hurdles is the growing rift between Sunni-led Saudi Arabia and Shiiteruled Iran, which back opposite sides in the Syria conf lict and had to be lobbied heavily to agree to meet in Vienna to craft a way forward for the war-torn country. Saudi Arabia executed a

prominent Shiite cleric and then severed diplomatic relations with Iran this week after its embassy in Tehran was stormed by a mob protesting the death.

It is not yet clear what impact those developments might have on the Syria negotiations.

If Saudi-Iranian tensions can be overcome, if peace talks between the Syrian government and opposition go ahead later this month as planned and if they are successful, the biggest challenge to the US timeline is still that no one else has yet agreed to its specifics, particularly those related to Assad’s departure.

Assad has steadfastly refused to step down while his nation’s terrorist threat, as he sees it, persists. The timeline offers no explanation for exactly how Assad would leave or what his postpresidential future might hold.

And his chief backers, Russia and Iran, have resisted all efforts by outside powers to determine Syria’s future leadership, insisting that is a decision for the Syrian people. Russia and Iran may object to the US timeline’s call for Assad to leave six months before elections would be held.

In addition, the Syrian opposition wants Assad out as soon as possible. The opposition along with US allies like Saudi Arabia,

45 Number of years the Assad family ruled Syria

Qatar and Turkey could view the American concept as a betrayal.

The US is balancing numerous considerations as it seeks to quell Syria’s violence and advance several strategic objectives. Its top priority now is rooting out the Islamic State (IS) from its headquarters in northern Syria.

Still, Obama and other US officials promised for years to end the Assad family’s 45-year grip on Syria, arguing that a leader who uses barrel bombs and poison gas on his own people has lost legitimacy. Ridding Syria of Assad could also strip Iran of its foothold in the heart of the Arab world and dramatically change the security equation for neighbors, such as Israel, Lebanon and Turkey.

In recent months Washington and its allies in European capitals have retreated from demands that Assad leave power immediately as the IS gained territory in the region and the priority shifted to defeating the militant group.

The timeline, however aspirational, shows how US diplomats and policymakers are determined to outline an exit plan for Assad and not let concerns over the IS and other extremist groups allow him to cling to power indefinitely. The document obtained by the A P starts Sy ria’s new political process next month.

An 18-month transition period

would be initiated, consistent with the plan endorsed by the UN Security Council last month.

The UN’s special envoy for Syria, Staffan de Mistura, has set a January 25 date for government-opposition peace talks to begin in Geneva.

The US timeline envisions the Security Council signing off on a framework for negotiations between Assad ’s representatives and the opposition, leading to the formation of a security committee in April. That would be accompanied by an amnesty for some government and military members, and moderate opposition leaders and fighters. The t ra n sit ion a l gover n i ng body would then be created.

In May the Syrian parliament would dissolve, according to the timeline. The Security Council would recognize the new transitional authority and lay out the transition’s next steps. These include major political reforms, the nomination of an interim legislature and an international donors’ conference to fund Syria’s transition and reconstruction.

The next six months, through November—when Obama’s successor is elected—would be devoted to the sides drafting a new constitution. The Syrian people would get a chance to vote on that document in a popular referendum in January 2017, according to the timeline.

Only then would the process lead to what Washington calls the root cause of the entire conflict and the growing extremist threat across the Middle East and beyond: the end of Assad’s rule of Syria.

In March 2017 the timeline reads: “Asad relinquishes presidency; inner circle departs.” The document uses the US government’s preferred spelling of Assad.

Syria’s new government would assume full powers from the transitional body after the parliamentary and presidential elections in August. AP

A10 Thursday, January 7, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

We can make change happen

E

mbracing change is always a good exercise to welcome the New Year. Most of us, however, won’t do it because we are enslaved by old habits and chained to the bliss of our comfort zone. More often than not, we hate the idea of going into the unfamiliar. We look at things that bring discomfort to our life with disdain, the pangs of growth included.

That’s why we often reject what change represents: A new beginning, a clean slate and an unfamiliar world of growth.

Unfortunately, by resisting change we are also rejecting growth or progress. We can’t create positive things in our life, or in our business for that matter, if we don’t make some changes in the way we do things. One definition of insanity is doing exactly the same things but expecting different results. Following this line of thinking, we must be crazy to expect a different kind of result in our life or business without changing the way we do things or the way we do business.

One of the laws that cannot be repealed states: If you keep on doing what you’ve always done, you’ll keep on getting what you’ve always got. The universe isn’t going to suddenly reward your insolence by changing its rules. You must alter the way you tackle certain challenges if you want success. In a fast-changing world, only those who can quickly adapt can find a way to grow or move forward.

One way to shift toward success is to realize that we have unlimited potential, and that we can tap into this potential starting today.

We can do this faster if we erase our mental ties to the past. This is the powerful thesis proffered by Richard Carlson in his book Don’t Worry, Make Money: “One of the most severely limiting beliefs that many of us have is that the person we were yesterday is the person we have to be today. This belief keeps us tied to our past mistakes, habits and limitations. We somehow buy into the notion that history truly does repeat itself, that if we weren’t successful yesterday, we certainly can’t be successful today or tomorrow.”

As we welcome 2016, let’s work through our aversion to change.

We can embrace change and allow it to transform our lives for the better. We just have to open our mind to the idea that all things are possible if we have faith in ourselves, in our capabilities.

One of the most dynamic and significant changes we can make in our life this year is to restore our self-confidence and focus only on things that we have some capacity to control. Which reminds us of the prayer that says: “Lord, grant me the strength to change the things I can, the serenity to accept the things I cannot, and the wisdom to know the difference.”

We have the power to make change happen.

Governments: Lying liars John Mangun

OUTSIDE THE BOX

E

very week brings a new global crisis. This week it is the breakdown in relations between Iran—the center of Shiite Islam—and Saudi Arabia representing the Sunni majority.

While we sit here in the Philippines still basking in the triumph of a beauty pageant win and wondering about Manny Pacquiao’s future plans, the world is in chaos.

The Philippine government makes every effort to give the appearance that it is on top of global developments, but, in fact, it is all but helpless to respond. The administration meets to discuss to the situation in Saudi Arabia that affects 1 million Filipino workers and assures the people that they are “prepared for any contingencies.”

While open warfare between Saudi and Iran is highly unlikely, the government is powerless to bring those Filipinos home, let alone provide gainful employment when they get back. Be realistic. The Philippine government could not get Mayor Eugenio Bito-onon Jr. and the 200 Filipino residents back from PagAsa Island if the Chinese decided to move in. At some point, potential problems become greater than the people responsible for dealing with those problems.

But governments must maintain the illusion that they have everything under control. Nothing could be farther from the truth, and all we need to do is look at the global economy.

Even this conf lict between Saudi Arabia and Iran is all smoke and mirrors, having nothing to do with a centuries-old religious fight.

Saudi and the US is losing the oil price-based economic war against Iran and Russia. What the Saudi government should be saying, at least to its own people, is that the nation will be bankrupt in a very few years. If the state of affairs continues on this path, the Saudis will have to go back to living in the desert, herding camels.

Maybe the last government official that actually told the truth was when Joseph told the pharaoh of Egypt to prepare for seven years of famine. Except, Joseph was an ordinary citizen when he said that. After the pharaoh made him a government official, he then lied to the people.

Here is how it went down: Joseph,

on behalf of the government, took “A fifth of the produce of the land of Egypt [taxes] in the seven years of abundance. Then, when all the land of Egypt was famished and the people cried out, Joseph opened all the grain storehouses, and sold it back to the Egyptians.”

I wrote the other day about how the government in Brazil is experiencing its worst economic recession since 1901 and how global steel prices have collapsed. My friend Dean Bocobo, a scholarly and well-informed individual, asked me in response: “Is the much-anticipated deflationary death spiral beginning?” I responded, “No, just ‘bad’ economies headed by ‘bad’ leaders”. Actually, I used a stronger and more vulgar word than bad.

At least Joseph prepared for the downturn in the economic spiral; Brazil did not. Brazil spent billions from the good times to host the World Cup and soon the Summer Olympics. Governments never prepare to protect the people from a “famine”.

They lie. All governments are lying about their economies to protect their power.

Here is an example of how bad it is. Nevsky Capital is a global emerging-markets investment fund with about $1.5 billion under management. That amount is pocket money in the financial world but it is one of the most successful in history, over the last 15 years averaging nearly a 20-percent annual return. They shut down this week.

Nevsky has been successful be-

Saudi Arabia and Iran on the brink

S

audi Arabia and Iran started the New Year by reigniting an old feud. The challenge for the rest of the world is not to let their recklessness lead to an even broader Sunni-Shiite conflict across the Middle East.

The latest crisis started on Saturday, when the Saudis executed a prominent Shiite cleric, Nimr al-Nimr, along with several dozen convicted al-Qaeda terrorists. The Iranian regime—which itself put nearly 700 people to death in the first half of 2015, according to Amnesty International—swiftly condemned the execution, and crowds in Tehran stormed the Saudi embassy. On Sunday Saudi Arabia ordered the Iranian ambassador out of the country.

It’s important to note that the Saudis’ main audience here is domestic. As low oil prices and a giant deficit have forced the government to raise taxes and cut gasoline subsidies, it is not going to brook any public disturbance. King Salman, on

the throne just a year now, likely is still consolidating his power.

At the same time, there’s a broader context to keep in mind. The Saudis undoubtedly fear that Iran wants to take leadership of a pan-Shiite bloc across the Middle East to challenge long-standing Sunni dominance.

They are right. And then there’s the nuclear deal reached last year between Iran and Western powers, which has the Saudis worried that their longtime US allies may be changing horses. The Saudis are also concerned about talks among the US, Russia and Iran to end the Syrian civil war, which seem certain to leave their sworn enemy—Syrian leader Bashar al-Assad—in power for the short term.

No one should be under any illusions about how easy it will be to get the Saudis to moderate their views or change their behavior. But there are a few points to make. The main one is that, rather than trying to stamp out domestic unrest with fundamentalism, they would do well to diversify their economy away from total dependence on volatile oil markets. They also need to ensure that the main burden of recent belt-tightening falls on the super-wealthy, rather than the middle class; continue their embryonic attempts at local political liberalization; and end institutionalized discrimination against Shiites.

The White House has a few carrots to use with the House of Saud.

While threatening to cut off scheduled arms sales would be a mistake, it could make future contracts for weapons the Saudis covet—precision bombs, air-defense systems and attack helicopters—contingent on

cause of looking at top-down macro economic numbers from individual countries and then looking at bottom-up corporate data to pick company winners that benefit from the economy.

Here, in part, is what they said in their closing letter to shareholders: “Data releases have become much less transparent and truthful at both a macro and a micro level. It is more difficult than ever before for us to accurately forecast macroeconomic and corporate variables.”

“Currently stated Chinese real GDP growth is 7.1 percent and India’s is 7.4 percent. Both are substantially overstated. This obfuscation and distortion of data, whether deliberate or inadvertent, makes it increasingly difficult to forecast macro and hence micro, as well. The transparency of decision-making has also declined. Equity markets are also less transparent.”

Translated from the proper British English, “Governments are lying. Corporations are lying. Even the stock exchanges are lying. We cannot make sensible investment decisions when the whole economic system and the financial markets are one big lie.”

I am sure I mentioned that for 2016, “You ain’t seen nothing yet”— and it’s only the first week of the year.

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.

Saudi efforts to ease regional tensions. The US should also encourage, and pledge to provide technology for, the creation of a shared missiledefense system among the Gulf Arab states to deter Iran.

For his part, President Barack Obama cannot look the other way at Iranian breaches on unrelated matters, such as conventional missiles and human rights. That simply fuels Saudi distrust, encourages the Iranian regime to see what else it can get away with, and gives critics in Congress and the Middle East more impetus to blow up the nascent deal.

In a more sensible world, the shared fight against Islamic State might have led to broader regional cooperation and an easing of Muslim sectarian rivalries. That now seems a faint hope. The more urgent priority is for the US and its allies to focus on keeping things from getting worse.

Bloomberg View

Opinion BusinessMirror

opinion@businessmirror.com.ph

Thursday, January 7, 2016 A11

BBL: A missed opportunity Beginning the new creation for peace in the South Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Ariel Nepomuceno

DECISION TIME

T

HE decades-long insurgency and lawlessness in Muslim Mindanao is a consequence of our colonial history, which divided the Filipino people on the basis of religion, political and economic stature. The great divide between the Christians and Muslims have also been conveniently used by our former colonial masters and subsequent governments to legitimize the concentration of power, influence and wealth in a few who make up the ruling elite in the country.

The result is pathetically obvious: the clamor for separatism from our Muslim brothers who have been alienated and neglected due to long years of sheer poverty, neglect, violence and incessant conflict.

Attempts for peace That insurgency in Mindanao is definitely rooted in old political, social and economic inequalities in the supposed land of promise. The glaring statistics have been studied and evaluated by past governments before this one.

Several futile attempts have been resorted to in order to build and embed the basic political structures that would hopefully empower and enable Muslim Mindanao to hasten its economic development and subsequently allow for further social integration and inclusiveness. We had the Tripoli Agreement in 1976, the Autonomous Region in Muslim Mindanao in 1989, the Moro National Liberation Front-Government of the Republic of the Philippines Peace Pact in 1996 and now the Bangsamoro basic law (BBL).

Sadly, peace in Muslim Mindanao continues to elude us due to some events that have politicized the people and made the passage of the BBL an extremely emotional issue. The Mamasapano incident, recent scandals in the Armed Forces of the Philippines, the 2016 election-driven agenda of some politicians and the continuous clan-led factionalism among the ruling groups in Mindanao have unearthed several, albeit mostly unfounded, doubts about the BBL being a starting point for peace.

Keeping the hope for peace The reservations and questions have not stopped the international community, particularly peace advocates and even the investors, from encouraging and even pushing for the BBL or even a close variant of it, to be signed as soon as possible. According to them, the huge potential of the Mindanao region in terms of rich natural resources, sturdy manpower with a hunger for work and relatively cheap costs of living will remain untapped or even stagnant if the BBL is not prioritized.

Weaknesses of BBL The fundamental objections to the BBL’s passage are mostly on the constitutional ground. Some lawmakers and legal commentators believe that the

BBL submitted for congressional approval is unconstitutional, particularly the provisions on national sovereignty and territorial integrity. They argue that creating another autonomous region, or even a separate political entity like the Bangsamoro, amounts to a reorganization of the powers of government, thereby usurping the sovereignty of the Filipino people. As such, it necessitates a constitutional amendment. These concerns are central to the ongoing fierce debates, and, unfortunately, the two houses of Congress have no definite road map yet on how this can be moved forward. In the meantime, we have a depressing status quo situation in Mindanao—an area beset by poverty, violent crimes and societal disorder.

Difficult way forward Peace can only be achieved if the government and all relevant stakeholders decisively get their act together, roll up their sleeves and go to work on this important piece of legislation. As time is obviously running out in terms of firm congressional action on the matter in the face of persistent controversies, a probable alternative to explore is the execution of a supplementary framework agreement containing some commitments on the part of specific government agencies—like the Executive department, the two houses of Congress and the Bangsamoro Transition Commission in the interim—if only to capture distinct action points, like curing the alleged constitutional defects of the BBL, setting clear deadlines for such, designating responsible action parties and reiterating or delivering the key principles that will need to be stipulated in the BBL proper.

Basically, a documentation that the incoming government can build upon so as to make the BBL and Muslim Mindanao’s right to self- determination a reality.

The discussions around the passage of the BBL should not focus on its weaknesses and what it cannot achieve. Rather, it must be viewed as the only probable opportunity for bringing about positive change and lasting peace in a region that has been deprived for so long.

Truly, there is no alternative to peace.

War should never be an option.

For comments and suggestions, send to arielnepo.businessmirror@gmail.com

T

he Lord be praised and glorified; His mighty and majestic voice rules over the destructive waters and silences the forces of chaos (Psalm 29:1-2, 3-4, 3, 9-10). In the baptism by the Christ, water is with the Holy Spirit and fire; the Spirit descended upon Jesus Himself baptized as the Father called Him “My beloved Son” (Luke 3:15-16, 21-22).

Voice over the waters Psalm 29 is a hymn of praise extolling God as the sovereign Lord over the heavens and the earth. The celestial beings (“sons of God”—angels) in the heavenly court surrounding God’s throne are commanded to acclaim the glory and might of God. All heavenly beings are to pay the Lord the homage due to His name.

God’s name reveals and embodies His divine power and glory: the Lord’s wondrous name must be praised and adored in His holy court as well as on earth.

God’s sovereignty is manifested also in His power over the forces of nature: the Lord’s voice thundering and ruling over the waters. Echoing probably a Canaanite hymn to the storm-god Baal, the mighty and majestic voice of the Lord is pictured as quelling the forces of chaos, the vast and ruthless waters, as in the beginning of creation (cf. Genesis 1:2, 6-10).

The voice of God (mentioned seven

times in the psalm) is splendidly powerful and creative, commanding and what it says happens. This divine power is further underscored by portraying the God of glory sitting triumphantly enthroned above the flood (mabbul—mentioned only here and in the Genesis narrative of the flood), giving assurance that the frightening and destructive flood will not destroy the world again. The scene closes with all beings proclaiming the glory of the Lord, the mighty king forever.

With the Holy Spirit and fire

The people were waiting and looking for the Messiah, or the Anointed One, and some have started to mistake John for the Christ. So, John basically clarified to them that he was not the Messiah: his baptism was only with water and as a ritual of repentance for sins and cleansing. The Christ’s baptism is with the Holy Spirit and fire, meaning

that it will truly transform and purify those who will receive it; it will be a baptism that brings in the eschatological fulfillment of a new life in union with God and the time of judgment revealing the ultimate victory over sin through God’s reign in the Christ.

John tried to prepare the people for Jesus by his emphasis that the one still to come after him is mightier than he and far superior than himself. John graphically admitted that that he was not even worthy to perform the menial task of loosening the straps of the sandals of the promised and awaited one. Although his preaching and austerity of life caught the imagination of the hope-filled people, John clearly had no illusions about himself; he was absolutely for the truth and would not take advantage of the people for his own vested interest.

You are My beloved Son

Although Jesus was baptized by John, that was not described at all.

It was what happened afterward that merited full details. While praying to God following his submission to John’s form of baptism, the heavens opened up for Jesus, for Him to receive the extraordinary events that ensued in an apocalyptic manner.

The Holy Spirit descended upon Jesus in a bodily dove-like form. In and through Jesus, the Holy Spirit and saving power of God has returned to the world. People in breaking their covenant with God became disassociated from God’s Spirit. The Messiah

A brand-new year, a brand-new hope Susie G. Bugante

All About Social Security

A

S the year 2016 starts to unfold, many Filipinos gladly shake off the misfortunes of the past year and look forward to a brighter and better year ahead. This optimism is indicated in the results of the fourth-quarter 2015 survey conducted by the Social Weather Stations, from December 5 to 8, 2015, showing that 92 percent of adult Filipinos are entering the coming year with hope, and only 8 percent with fear.

Perhaps, being spiritually evolved might have something to do with this hopeful attitude. As the Good Book says in Jeremiah 29:11: “For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future.” This is often the reminder every start of a New Year that makes Filipinos look forward to the future with anticipation of good things to come.

Despite the fact that 2016 is an election year and could mean political and social upheavals, people are actually looking forward to it and the changes in political leadership it will bring.

A brand-new year is also often a chance to learn from the mistakes of the past and resolve to do better in the

future—better health and work habits, better relationships, etc.

This same attitude is true among companies and organizations. It seems that the work forces in companies are filled with renewed energy and determination to top the previous year’s performance.

After the holidays and merrymaking, everyone seems to be eager to get back to work.

The same can be said for the employees of the Social Security System (SSS).

On the first day of work for 2016, employees eagerly manned their workstations, ready to serve the public after several days of respite. They remember all the hard work they have done in the past and the commitments to do better in 2016.

To summarize how the SSS fared, at

the end of 2015 the SSS remained financially solid and its assets continued to grow. SSS’s average annual net revenue increased from P8 billion (for the period 2000 to 2009) to P33 billion (2010 to 2014). Although, as I have previously pointed out, all these could easily dissipate if the proposed P2,000 increase in pension is effected without the corresponding increase in the rate of contributions.

The SSS also made inroads in terms of its programs and services. Its efforts to reach out to various workers’ sectors resulted in an increase in membership to 33.3 million as of end of September 2015 compared to 28.8 million at the end of December 2010. It opened more branches here and abroad to attend to the increasing number of members, including overseas Filipino workers (OFWs).

To enhance the administration of benefits to members, the SSS established 73 physical examination centers nationwide to improve delivery of medical services to members. The funeral benefit was increased from the fixed amount of P20,000 to a variable amount ranging from P20,000 to P40,000.

A 30-day grace period was granted in the filing of sickness claims not requiring hospitalization for OFW members in consideration of their location and distance.

A voluntary provident fund for local workers, called the SSS P.E.S.O. (Personal Equity Savings Option) Fund, was implemented in 2015 to enable members

precisely as the One Anointed with the Spirit was awaited to bring back to the people the Spirit of the Lord.

The dove-like form suggests the new beginning of the world, a recapitulation of the dove finding where to set foot indicating a new start of life after the flood during the time of Noah (Genesis 8), the renewal of the earth emerging from the water of sin, a new covenant between God and humankind purified.

The recreation of life for the world in and through Jesus Christ, and which will be accessible to all in the baptism with the Holy Spirit, means the new life of intimacy with God. Jesus Himself is this baptism: He is the one upon whom is the Holy Spirit. And as the voice from heaven identified Him, He is the one called

by God “My beloved Son, with whom I am well pleased.” In this complete Trinitarian communion in the person of Jesus Christ, the water of baptism becomes the effective sign of the new creation.

Alálaong bagá, God’s cosmic recreative power and glory is proclaimed in the baptism of the Lord Jesus Christ. All creation is to be made new, and already it has begun in Jesus Christ. Through our baptism in Christ we are now part of His ministry of recreating our world. This is where our celebration of Christmas leads us.

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

to save their excess earnings.

To provide more efficient delivery of services, the SSS enabled the online submission of sickness notification, online submission of technical retirement claim and online issuance of SS number.

Members applying for salary loans have the option to receive the proceeds of their loans through cash cards of either CitiBank or UnionBank.

For 2016, new payment platforms for members are in the offing. Members will have the option to pay their contributions via credit or debit cards or through short messaging service (SMS).

The SSS text service at 2600 will provide additional transactions, such as benefit and loans eligibility status, as well as notification and application status.

The number of self-service information terminals, now numbering 283, will be increased and deployed to the newly opened branches.

There are many plans for 2016 that aim to improve services to members.

With the support of its members and stakeholders, the SSS looks forward to the future with great hope.

For more information about the Social Security System (SSS) and its programs, call our 24-hour call center at (632) 920-6446 to 55, Monday to Friday, or send an e-mail to member_relations@sss.gov.ph.

Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.

Clarifying VAT exemptions for domestic and intl transport operations Atty. Esther M. Weigand

Tax law for business

A

t last, the Bureau of Internal Revenue (BIR) has clarified the exemptions granted by law to international carriers. Section 109 of the National Internal Revenue Code (NIRC), as amended, provides specific transactions that are exempt from valueadded tax (VAT). Among these exempt transactions are those relating to international shipping and air-transport operations, such as: 1. Transport of passengers by international carriers; 2. Sale, importation or lease of passenger or cargo vessels and aircraft, including engine, equipment and spare parts thereof for domestic or international transport operations. Pursuant to Revenue Regulations (RR) 16-2005, this shall be VAT-exempt if the vessel, including

its engine and spare parts, is 150 tons and above, and subject to certain age limit requirements; and 3. Importation of fuel, goods and supplies by persons engaged in international shipping or air-transport operations. RR 16-2005 clarifies that these shall be used exclusively for international shipping or air-transport operations to be exempt from VAT.

In addition to the above exemption, RR 16-2005 expanded the exemption by providing that the importation of life-saving equipment, machinery, spare parts, navigational equipment, steel plates and other metal plates to be used for shipping transport operations, and for the construction, repair renovation or alteration of merchant marine vessels for domestic trade are also exempt from VAT. On December 28, 2015, the BIR issued RR 15-2015 to amend certain provisions of RR 16-2005.

Under the new RR, the following transactions relating to transport operations are exempt from VAT: 1. The transport of passengers and cargo by international carriers doing business in the Philippines; 2. The sale, importation or lease of passenger or cargo vessels and aircraft, engine, equipment and spare parts for domestic and international transport operations; and 3. The importation of fuel,

goods and supplies by persons engaged in international shipping or air-transport operations.

RR 15-2015 clarified that the transport of both passengers and cargo by international carriers doing business in the Philippines are exempt from VAT. The transport of passengers by international carriers is exempt from VAT based on Section 109 of the NIRC, as amended. On the other hand, the transport of cargo by international carriers is exempt from VAT since such transaction is already subject to common carrier’s tax. This is so since the NIRC provides that services, which have already been subject to percentage tax, such as common carrier’s tax, are already exempt from the imposition of VAT. The RR also specifically provides that international carriers who are exempt from VAT on their transport of passengers and cargo, are not allowed to register for VAT purposes.

The new RR removed the provisions on exemption of importations of life-saving equipment, machinery, spare parts, navigational equipment, steel plates and other metal plates to be used for shipping transport operations, and for the construction, repair renovation or alteration of merchant marine vessels for domestic trade, which were considered exempt under RR 16-2005.

As for the sale of vessels and aircraft, its exemption are now subject to the requirements on restriction on vessel importation and mandatory vessel retirement program set by the Marina, but without specifying any weight requirement or other conditions, which was previously required under RR 16-2005.

However, the new RR retained the exemption on importation of fuel, goods, and supplies by persons engaged in international shipping or air transport operations, but only if the fuel, goods, and sup-

plies imported are to be used exclusively for international shipping or air-transport operations, such that the transport is from a port in the Philippines, going directly to a foreign port, or vice versa, without docking or stopping anywhere else in the Philippines, unless to load or unload passengers or cargo to and from abroad.

Any portion of the imported fuel, goods, and supplies used domestically will be subject to 12 percent VAT.

The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services (WTS) Alliance.

The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter.

Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at esther.weigand@bdblaw.com. ph or call 403-2001 local 340.

2nd Front Page BusinessMirror

A12 Thursday, January 7, 2016

www.businessmirror.com.ph

Foreign businessmen ask Congress to prioritize CMTA, amend key laws

F

By Catherine N. Pillas

oreign businessmen on Wednesday urged the 16th Congress to fast-track the approval of the proposed Customs Modernization and Tariff Act (CMTA), which seeks to modernize and streamline customs procedures.

Aside from the CMTA, foreign businessmen also called on Congress to approve amendments to the Foreign Investment Negative List (FINL) and the proposed PublicPrivate Partnership (PPP) Act. “We urge Congress to approve the proposed CMTA, amendments to the build-operate-transfer law, FINL, amendments to the Apprenticeship Act as well as the Bangsamoro basic law (BBL) in a form that advances the progress of the Muslim-Filipino community and Mindanao,” said John D. Forbes, senior adviser to the

American Chamber of Commerce of the Philippines.

The European Chamber of Commerce of the Philippines (ECCP) also wants Congress to enact CMTA, the proposed PPP Act, and a bill which seeks to amend the FINL. Aside from ensuring the transparency of transactions at the Bureau of Customs (BOC), ECCP President President Guenter Taus said having the CMTA in place will allow the Philippines to be compliant with international trade commitments and regulations.

This file photo shows piled container vans at the North Harbor in Manila. Foreign businessmen said enacting the proposed Customs Modernization and Tariff Act will boost the Philippines’s efforts to expand international trade. ALYSA SALEN

The enactment of CMTA will significantly improve market access to the Philippines and the ease of exporting Philippine products,” the European Chamber of Commerce of the Philippines said. “[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 [WTO] and the Trade Facilitation Agreement of the WTO 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,” the ECCP added. Local exporters belonging to the Philippine Exporters Confederation Inc. are also urging Congress to enact CMTA, as reforms in the BOC is expected to boost its bid to become part of the Trans-Pacific Partnership Agreement.

Forbes also called on the House of Representatives to pass the Resolution of Both Houses 1, which proposes amendments to certain economic provisions of the 1987 Constitution.

As there are only nine sessions left before the Senate and the House go on a break for the 2016 elections, local businessmen belonging to the

Philippine Chamber of Commerce and Industry (PCCI) urged Congress to pass the Department of Information and Communications Technology (DICT) bill.

PCCI President George T. Barcelon said the creation of a DICT is “key” to ramping up the competitiveness of local businesses, particularly the business-process outsourcing (BPO) sector.

House Speaker Feliciano Belmonte Jr. outlined seven proposed measures that Congress aims to pass before the campaign period begins: BBL; a bill strengthening the PPP Program, proposed CMTA; amendments to the Bangko Sentral ng Pilipinas charter; the creation of the Coco-Levy Trust Fund; the DICT bill; and the Salary Standardization Law of 2015.

However, the Management Association of the Philippines (MAP) said there may not be enough time to pass a “meaningful version” of any piece of economic legislation.

The 16th Congress went on a Christmas break last December 19, and is expected to reconvene on January 19.

The third and last regular session of the 16th Congress is expected to be cut short, as the two chambers will take a break again from February 6 to May 22 for the 2016 national and local elections.

SC grants BOC’s petition for TRO vs bidder in computerization deal

By Joel R. San Juan

T

HE Supreme Court (SC) has issued a temporary restraining order (TRO) enjoining the Regional Trial Court (RTC) in Manila from implementing its order that stopped the Bureau of Customs (BOC) from canceling the award of the P650-million joint-venture deal with Omniprime Marketing Inc. and Intrasoft International Inc. for the implementation of the Philippine National Single Window 2 project.

In a two-page resolution, the Court’s Second Division chaired by Associate Justice Antonio Carpio, said the TRO will take effect immediately.

“After deliberating on the petition for certiorari with prayer for the issuance of a temporary restraining order assailing the Omnibus Order dated August 24, 2015, of the Regional Trial Court, Branch 47, Manila...which, among others, granted herein respondents’ application for the issuance of a writ of preliminary injunction and the issuance of an injunctive writ..., the Court, without necessarily giving due course thereto...hereby issues a temporary restraining order, effective immediately and continuing until further orders from this Court, enjoining and restraining the respondents, the RTC Branch 47, Manila, their representatives,

agents or other persons acting on their behalf from enforcing and implementing the assailed Omnibus Order dated August 24, 2015,” the resolution stated.

The Court also directed respondent Omniprime and Intrasoft to comment on the petition filed by the BOC and the Department of Budget and Management (DBM) within 10 days.

The case reached the High Tribunal after Customs Commissioner Alberto D. Lina and DBM Procurement Service Executive Director Jose Tomas Syquia filed the petition assailing the injunction issued by the trial court.

See “BOC,” A3