BusinessMirror 23, 2015

BusinessMirror

THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012

U.N. MEDIA AWARD 2008

A broader look at today’s business Saturday 18, July 201423, Vol.2015 10 No. 40 Thursday, Vol. 10 No. 287

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Thursday, July 23, 2015

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Atticus Finch a racist?

There goes the ideal

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B R K Los Angeles Times

OMETHING odd happens after Gregory Peck delivers one of cinema’s most celebrated courtroom orations as attorney Atticus Finch in the 1962 film adaptation of To Kill a Mockingbird. The wrongful conviction of his client, a black man named Tom Robinson accused of raping a white woman, unfolds as an afterthought.

When the trial’s white audience files out, the black observers in the balcony remain, not to express anger or grief, or to confer about how to help Robinson’s wife and children, but to honor Atticus by rising silently from their seats.

“Miss Jean Louise, stand up, your father’s passin’,” an admiring black minister tells Atticus’s daughter, Scout.

The minister’s focus—and the camera’s—is on Atticus, not Tom. Fifty-three years later, for many fans of the Pulitzer Prize-winning book and perhaps even more so the Oscar-winning movie, Atticus is still the focus.

The American Film Institute named Atticus Finch the top movie hero of the 20th century, surpassing Han Solo and James Bond; cultural figures as influential as Oprah Winfrey and Tom Brokaw praised him, and generations of lawyers, teachers and parents took inspiration from him. Which is why the publication of the novel Go Set a Watchman, in which To Kill a Mockingbird author Harper Lee depicts Atticus as a staunch segregationist who attended a meeting of white supremacists, hits hard. If Atticus is a racist in the newly published novel, which Lee wrote in the 1950s before she wrote To Kill a Mockingbird, what else might be true about him—and us?

“It’s upsetting to a lot of readers, but, well, welcome to 20th-century America,” Charles J. Shields, author of the biography Mockingbird: A Portrait of Harper Lee, said in an interview this week. “One problem with Atticus Finch in the movie is that there’s so much moral certitude there...he is an ideal, a paragon.”

For some audiences, however, Atticus has always been a fantasy, among the first of a durable cinematic character we’ve come to know well: the white savior.

It’s a hero type that shows up in far more recent movies as popular and critically praised as The Blind Side, The Help and Dances With Wolves, in which a white character rescues people of color from their plight.

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Today’s Horoscope

By Eugenia Last

CELEBRITIES BORN ON THIS DAY: Daniel

Radcliffe, 26; Paul Wesley, 33; Marlon Wayans, 43; Woody Harrelson, 54.

HAPPY BIRTHDAY: Stick to your plan and refuse

to let sudden, unexpected alterations throw you off your game. Question and research your options before you make a move that will affect your home or financial life. Discipline and hard work will be required to reach the success you are aiming for. Don’t fight a losing battle when it’s best to take a detour. Your numbers are 2, 12, 15, 21, 27, 30, 42.

heroism and less on the other characters in the novel.

“To Kill a Mockingbird was among the first of a trope that we would see happen over and over in Hollywood,” writer Phenderson Clark said.

“There often needs to be this white figure who somehow can connect with majority white audiences and navigate and push along the storyline. We live with the ghost of Atticus Finch.”

That ghost surfaces in movies that many people— including critics and film academy members—adore, but others increasingly find patronizing. The release of 2011’s The Help was met with both praise and disdain for Emma Stone’s character, a young writer who provides a vehicle for African-American maids played by Viola Davis and Octavia Spencer to tell their stories. With 2009’s The Blind Side, there were similar rumblings—and an Oscar win for Sandra Bullock— after her portrayal of a woman who adopts an African American youth played by Quinton Aaron, enabling him to surmount poverty and ultimately achieve the dream of playing in the National Football League.

In Glory the 1989 movie about the first all-black Civil War regiment, top billing went to a white actor, Matthew Broderick, who played regiment leader Col.

To see Atticus portrayed as reflecting the racism that might be expected of a white Southern man in the first half of the 20th century is to acknowledge realities that those narratives rarely do.

“Now that Atticus Finch has been removed from that pedestal of this benevolent, messianic character, people seem to be reacting as if they’ve been told, ‘No, Virginia, there is no Santa Claus,’” said Matthew W. Hughey, associate professor of sociology at the University of Connecticut and author of the book The White Savior Film. “But a lot of critical social scientists or literary scholars aren’t upset, because we already saw white supremacy and white paternalism in the form of Atticus Finch. It was just the palatable kind.”

Of course, for many movie lovers, the character of Atticus Finch has become indelibly intertwined with Peck’s Oscar-winning performance in the film directed

by Robert Mulligan from a screenplay by Horton Foote, which reflected the actor’s own deeply felt beliefs about race. Peck, a vocal liberal who also produced the movie, was seen as a strong, handsome example of white virtue in a confusing time of racial upheaval in America.

According to Shields, in the editing room, Peck pressed the director to focus the movie more on Atticus’s

Robert Gould Shaw.

But the racist beliefs that the real-life Shaw espoused in his personal letters—including describing his regiment as childlike and worrying that they would embarrass him—did not show up in the screenplay.

“I love Glory,” Clark said. “But the movie would have you believe that Robert Gould Shaw is this white man plopped into the middle of the 1860s without a racist belief. In order to create the white savior, all of these stories have to be changed.”

Historically, some studios have encouraged black filmmakers to add white heroic characters to their movies, even when to do so would be nonsensical.

When Mario and Melvin Van Peebles sought financing for their 1995 movie about the Black Panther movement, Panther, a studio head suggested the filmmakers make one of the leading panthers a white man to lend the picture more mainstream appeal; other potential financiers, Mario said in an interview with Tikkun magazine, “suggested focusing on a Berkeley white person who would meet five young black guys, teach them to read and stand up for themselves.”

In other cases, a black director downplaying the role of a white character has provoked controversy. When Selma, Ava DuVernay’s movie about the Rev. Martin Luther King Jr., arrived in theaters late last year, some historians and critics took issue with her portrayal of Lyndon Johnson as a straggler in the effort for black voting rights, rather than a leader in it.

DuVernay responded with a Twitter post, saying that the “notion that Selma was LBJ’s idea is jaw dropping and offensive to...black citizens who made it so.”

Film portrayals of race, like those in movies from To Kill a Mockingbird to Selma, matter in particular in an era when the country is still largely segregated, in its housing, schools and churches, Hughey said.

“In lieu of actual lived contact with other races, film becomes the blueprint for how we believe the world is,” Hughey said.

As To Kill a Mockingbird was arriving in theaters in Alabama in early 1963, Birmingham Commissioner of Public Safety Bull Connor was directing the use of fire hoses and police dogs on civil-rights activists.

“White people were coming out of the theater feeling good about Atticus and...blocks away you had black children’s bodies skidding in the streets,” Shields said.

“When you challenge some people, their attitude is, ‘Don’t confuse me with the facts.’” n

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ARIES (March 21-April 19): Follow through with your plans. Stay busy working toward your own personal goals and you will avoid getting into an argument with someone who is looking for a fight. Don’t meddle or let anyone interfere in your life. Do what’s best for you. HHH

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CANCER (June 21-July 22): Get involved in something that you find intriguing, and you will enjoy the people you spend time with. Don’t let anyone make you feel guilty for doing something that brings you great joy. Arguments will lead to a stalemate. HH

TAURUS (April 20-May 20): Prepare to make alterations to your living space or the conditions in which you live. Don’t put up with what isn’t working for you. Personal change is highlighted, and being with someone who encourages you is essential. HHH GEMINI (May 21-June 20): Keep a close watch on the way someone responds. The possibility of being misled is apparent. If you aren’t clear where you stand, ask questions. You can’t make a good decision based on false information. HHHHH

LEO (July 23-Aug. 22): Make creative changes at home and you will please someone you love. Plan to upgrade your skills and knowledge in order to keep up with the changing times. Taking on extra jobs that you can do from home will be fruitful. HHHH

VIRGO (Aug. 23-Sept. 22): Work on your own and prepare diligently in order to do the best you possibly can. It’s the fine details and precision you promote that will win you a chance to advance.

Romance is in the stars, and a commitment can be made. HHH

LIBRA (Sept. 23-Oct. 22): Take whatever others say in stride. Getting upset will only hold you back. Use your intelligence and ability to find valuable solutions to outshine anyone trying to make you look bad. HHH

CAPRICORN (Dec. 22-Jan. 19): Be prepared to deal with last-minute changes. Don’t let anything ruin your plans. Adjust quickly and keep moving. It’s up to you to control the situation. If you let other people’s problems take over, you will end up being disappointed. HH

SCORPIO (Oct. 23-Nov. 21): Don’t let anyone talk you into something that doesn’t feel right or isn’t what you want to do. Be proactive and follow through with your plans, and you will feel better about your situation and the direction in which you are headed. HHH

AQUARIUS (Jan. 20-Feb. 18): You can fix anything. Don’t wait for someone else to make the first move. Be open and willing to do your part, and you will get the go-ahead to lead the way. Physical challenges must be handled cautiously. HHHHH

SAGITTARIUS (Nov. 22-Dec. 21): Your open-mindedness will be enticing to onlookers. Wheeling and dealing will lead to profitable deals and positive personal changes. Be true to what you want, but don’t mislead or hurt someone in your quest to reach your goals. HHHH

PISCES (Feb. 19-March 20): Size up your situation and make adjustments that are cost-efficient.

As long as you stay within your means, you can bring about positive change. Love is encouraged. A serious decision regarding someone special will change your life. HHHHH

BIRTHDAY BABY: You are discreet, passionate and disciplined. You are protective and confident.

‘move it along’ BY ROB LEE The Universal Crossword/Edited by Timothy E. Parker

42 44 46 48 49 50 52 53 58 59 60 61 62 63

ACROSS 1 Great divide 6 Making waves on the Atlantic 11 Aswan structure 14 Type of race 15 Rice dish (var.)

16 Part of a post-work plan 17 Leave for additional military duty 19 Moo ___ pork (Chinese dish) 20 Evening gala 21 Of base eight 23 Best way to drive 26 Common sense 27 Wise goat in Animal Farm 28 Deli offering 30 Elevator man 31 Diamond unit 32 Baseball necessity 35 Part of prime time 36 Alpine abodes 38 “___ as directed” 39 Fraction of a joule 40 Muddies up 41 Eyelid affliction

Elegantly designed Irish moonshine Plans, as a course Can’t stand Jewish theologian Root vegetable Lennon’s wife Risk having an altercation Former French coin “Waste not, want not,” e.g.

Like good dishwater Command to Fido Easygoing jogger Troops’ rest area

DOWN 1 Old computer screen 2 Not him 3 In the style of, on menus 4 Third-generation JapaneseAmericans 5 Indian industrial city 6 Impersonator’s shtick 7 Wheelbarrow necessity

8 9 10 11 12 13 18 22 23 24 25 26 28 29 31 33 34 36 37 41 43 44 45 46

47 Asian capital 48 Clothesline alternative 50 It may be set in the woods 51 Persuade 54 Much ___ About Nothing 55 Cosmetic safety org.

56 Deadly snake 57 The Catcher in the ___

___ gin fizz All the water in France Fast-food ventures of yore Dishes out Enlightened one, in Buddhism Really roughs up Jam-pack Sky-___ (TV news vehicle) Clobbered, biblically Inner’s opposite Causes Blind part?

Noted explorer La ___ Aphrodite’s man Adam’s boy Heretofore Young people Absolutely necessary Some males on the farm Leave the office temporarily Sphere ___-up rage Serving no purpose Vampire repeller

PAGES Solution to yesterday’s puzzle:

B C U. O

HE Philippine government and the Japan International Cooperation Agency (Jica) are set to begin the search for the locations of the proposed Manila subway project.

ATTICUS FINCH A RACIST? THERE GOES THE IDEAL

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This, after the Infrastructure Committee (Infracom) approved the conduct of a feasibility study for the Mega Manila Subway project. It was included in the Mega Manila transport road map drafted by Jica for the Philippines.

With the Infracom’s approval of a feasibility study, the Department of Transportation and Communications (DOTC) can begin looking for the most optimum alignment or location for the project.

The feasibility study will also

WHY AIRLINES KEEP PUSHING BIOFUELS The World BusinessMirror

news@businessmirror.com.ph

With 43-percent unemployment, Gaza’s forgotten crisis rages on

PALESTINIANS Sajeda Areir (from left), 8, her sister Farah, 7, and their brother Mohammed pose for a photograph as they dressed up to celebrate the first day of Eid al-Fitr in the Shijaiyeh neighborhood of Gaza City from on July 17. AP/KHALIL HAMRA

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HEY roll by on flatbed trucks, 12-foot missiles bearing the names of Hamas commanders killed in an Israeli air strike: the Shamalah, the Attar. The scene is a parade through central Gaza City this month on the one-year anniversary of the most recent of three Hamas-Israel wars. The locally made missiles, with a range exceeding the 45 miles to Tel Aviv, are hailed by a Hamas official masked in a red scarf as the crowd cheers.

It is also 10 years since Israel withdrew its settlers and soldiers from this Palestinian coastal strip, a moment to take stock of how much has changed since Israel left the area in the hands of the Palestinian Authority and optimism briefly blossomed.

Then investors spun visions of a Mediterranean Singapore. Marriott International Inc. considered plans for a beachfront resort, and the European Union built high-rise towers.

Even Israel played along, putting up a huge modern border terminal for the expected traffic.

Today there is little traffic and less optimism. The Palestinian Authority was driven out by its rival, Hamas, an Islamist group that rejects Israel’s existence.

Today Gaza is squeezed by Hamas on the one hand and its Israeli and Egyptian neighbors on the other, bereft of politics or an economy.

The Palestinians face international apathy as the rise of Islamic State and other crises supplant theirs at the heart of the Middle East conflicts. No longer able to smuggle Iranian missiles through Egypt— both countries have removed their support—Hamas makes its own.

Bigger problems

“WE’RE talking about a region that simply has bigger problems now,” says Mkhaimar Abusada, who teaches political science at Gaza’s Al-Azhar University. For Palestinians who thought life would be better after the Israelis left, “the disengagement has backfired badly.”

Motasem Abu Asser lives the difficulty every day. He rouses his four children in the one room left standing from their home pulverized by Israeli tanks a year ago.

“There are thousands of families like us,” says 31-year-old Abu-Asser, an unemployed vegetable hawker, shuffling through the rubble.

Gaza’s misery has always been fraught with the political disputes it encapsulates. For those seeking to indict Israel, Gaza is portrayed as one of the worst spots on earth.

It is not. Seven decades of United Nations-provided food, medical care and education have made Gaza more literate and healthier than much of the developing world.

No crisis

MEANWHILE, Israeli officials and their defenders repeat the phrase, “There is no humanitarian crisis in Gaza.” But there is. After last year’s war, 100,000 Gazans still do not have homes. And none of the 1.8 million inhabitants, most of them refugees from what is today Israel, have stability.

The World Bank reported in May that Gaza’s gross domestic product shrank by 15 percent in 2014 because Egypt closed off smuggler tunnels from Sinai and Israel invaded last summer. Real per-capita income is 31 percent lower than it was 20 years ago. Some 80 percent of Gazans receive some refugee aid. Unemployment stands at 43 percent. Gaza resists simple description. Hamas

sought to impose more Sharia law but pulled back amid opposition from human-rights groups and the half of the population aligned with Palestinian President Mahmoud Abbas’s more secular Fatah party.

Schools require teenage girls to wear long skirts and hijab head coverings but women who leave their heads bare generally suffer no consequences. This is not Afghanistan under the Taliban.

Steak au poivre

THE territory retains a middle class of business owners, doctors and other professionals who dine on steak au poivre at the tony Roots Club restaurant and drive late-model cars.

“I live a comfortable life but there’s a lack of stability here,” says Na’el al-Masri, a 32-year-old dentist.

Radical Salafist groups, some aligned with Islamic State and al-Qaeda, occasionally bomb music stores and Internet cafes and threaten the few tiny Christian institutions. That has led to a crackdown by Hamas security forces, placing them in the peculiar position of defenders against radical Islam.

“Hamas is persecuting us and arresting us, but we are doing our best to avoid a war with them and focus on fighting the Jews,” said Abu Mohamed el-Ansari, 27, wearing the traditional gray robe and long beard of the Salafists. Israel has eased some restrictions, admitting some building materials previously withheld because Hamas might take them to rebuild tunnels it used to attack Israel.

Entry permits

ISRAEL has increased the number of supply trucks let into Gaza to 800 a day from 400 and authorized the export of produce and fish to the Fatah-dominated West Bank. It also raised the number of entry permits to Israel for Gaza business people to 5,000 from 3,000.

“We will try to do our best to find creative solutions but not more than that,” Col. Grisha Yakubovich of the Defense Ministry said in an interview at his office in Tel Aviv. Gisha, an Israeli group that seeks freedom of movement for the Palestinians, says such solutions add up to little.

“The perception is that more political capital can be gained by imposing hardships on the people in Gaza rather than easing the conditions there,” said Eitan Diamond, Gisha executive director. When Israel pulled out of Gaza in 2005 it left its 21 settlements as piles of rubble.

Hamas has turned those areas into a university, amusement park, orange groves and militant training bases.

Missiles are made and tunnels rebuilt as Palestinians here, increasingly separate from their brethren in the West Bank, say another battle with Israel is inevitable.

Managed conflict

MANY ANY in Israel, persuaded there is no partner for a peaceful two-state solution, agree. The conflict cannot end, they say, so it must be managed.

Amid the war-torn landscape, Palestinians in Gaza haven’t given up, however. They troll the Internet, watch their satellite TV screens and look warily at the chaos and suffering in Syria, Iraq and Egypt.

Gaza’s tiny size and isolation have strengthened the clans of extended families who take care of each other, according to Omer Shaban, director of the Pal-Think for Strategic Studies research institute.

Predictions of economic doom, he says, are exaggerated. Bloomberg News

The Associated Press

ES BLAYES, France—In his biography, Chris Froome recounts how his two elder brothers used to amuse themselves by locking him in a dog kennel with an angry, scratching turkey. “Only when I was in absolute floods of tears would they open the cage up and let me out,” the Tour de France race leader recounts.

Thick skins are built on such experiences.

Froome has needed that armor against cynics and skeptics pecking at his probity and performances on the bike as the 2013 winner cruises toward a second win at the world’s toughest cycle race.

The British rider hasn’t failed a doping test or been caught cheating. All he’s guilty of is winning. And that, if Froome is clean as he and his Team Sky insist, is terribly unfair to him, to his teammates and to their sport.

They have no other choice.

As people in countries—such as China, India and Indonesia— get wealthier they are increasingly turning to air travel for vacation or business, creating an enormous financial opportunity for the airlines.

The number of passengers worldwide could more than double, to 7.3 billion a year, in the next two decades, according to the International Air Transport Association.

But many in the industry believe that without a replacement for jet fuel, that growth could be threatened by forthcoming rules that limit global aircraft emissions.

“It’s about retaining, as an industry, our license to grow,” says Julie Felgar, managing director for environmental strategy at plane maker Boeing, which is coordinating sustainable biofuel research programs in the US, Australia, China, Brazil, Japan and the United Arab Emirates.

Cars, trucks and trains can run on electricity, natural gas, or perhaps even hydrogen someday to meet emissions rules. But lifting a few hundred people, suitcases and cargo 35,000 feet into the sky and carrying them across a continent requires so much energy that only liquid fuels can do the trick.

Fuel from corn, which is easy to make and supplies nearly 10 percent of US auto fuel, doesn’t provide enough environmental benefit to help airlines meet emissions rules.

“Unlike the ground transport sector, they don’t have a lot of

alternatives,” says Debbie Hammel, a bioenergy policy expert at the Natural Resources Defense Council. That leaves so-called advanced biofuels made from agricultural waste, trash, or specialty crops that humans don’t eat.

United Airlines last month announced a $30-million stake in Fulcrum Bioenergy, the biggest investment yet by a US airline in alternative fuels. Fulcrum hopes to build facilities that turn household trash into diesel and jet fuel.

FedEx, which burns 1.1 billion gallons of jet fuel a year, promised on Tuesday to buy 3 million gallons per year of fuel that a company called Red Rock Biofuels hopes to make out of wood waste in Oregon.

Southwest Airlines had already agreed to also buy some of Red Rock’s planned output.

These efforts are tiny next to airlines’ enormous fuel consumption.

US airlines burn through 45 million gallons every day. But airlines have little choice but to push biofuels because the industry is already in danger of missing its own emissions goals, and that’s before any regulations now being considered by the US Environmental Protection Agency and international agencies.

The industry’s international trade group has pledged to stop increasing emissions by 2020 even as the number of flights balloons. By 2050 it wants carbon-dioxide emissions to be half of what they were in 2005.

Like airlines, the US military

S “T ,” A

A JAPAN Air Lines staffer checks the biofuel-loaded No. 3 engine of Japan Airlines (JAL) Boeing 747-300 before a demo flight at Tokyo International Airport in Tokyo in this photo taken on January 30, 2009. Using blend of 50-percent biofuel and 50-percent traditional Jet-A jet (kerosene) fuel, JAL conducted an hour-long demonstration flight. Many in the industry believe that without a replacement for jet fuel, growth in air travel could be threatened by forthcoming rules that limit global aircraft emissions. AP/ITSUO INOUYE

is also supporting development of these fuels for strategic and financial reasons. For biofuels makers, it is a potentially enormous customer: The military is the biggest single energy consumer in the country.

Making biofuels at large, commercial scale is difficult and dozens of companies have gone belly up trying. The logistics of securing a steady, cheap supply of whatever the fuel is to be made from can take years.

Financing a plant is expensive because lenders know the risks and demand generous terms. A sharp drop in the price of crude oil has made competing with traditional fuels on price more difficult.

The airlines are now seeing some of these difficulties up close. A United program to power regular flights between Los Angeles and San Francisco with fuels made from agricultural waste was delayed when the fuel producer, AltAir, had trouble retrofitting the existing refinery.

The companies now say the flights should begin in August. Red Rock’s planned deliveries to Southwest have also been pushed back, to 2017 from 2016, and construction

of the plant has not yet started.

But many in the industry say they are not surprised, or daunted, by the time and effort it will take to bring large amounts of biofuels, at competitive prices, to market.

“We really are trying to create a brand-new fuel industry,” Boeing’s Felgar says. “We’ve always known this is a long-term play, and our industry is long term.”

And if any industry is going to crack fuel from waste on a big scale, the airline industry might be the best bet.

Instead of having to build the infrastructure to distribute and sell these fuels at hundreds of thousands of gas stations, jet fuel only has to be delivered to a small number of major airports. For example, nearly half of United’s passengers fly through its five hubs in Houston, Chicago, Newark, San Francisco and Denver.

Still, after the many disappointments that have plagued biofuel development, few want to promise an imminent biofuel revolution. “I’m not Pollyannaish about this,” Felgar says. “I’m not optimistic, I’m not pessimistic, but I’m determined.” AP

Spain rebound leaves jobless hurdle restraining Rajoy vote push

PROTESTERS carry banners reading “Food, jobs and a roof with dignity. Working for a general strike” during a “Dignity March” to protest against the government in Madrid, Spain, on March 21. AP/ANDRES KUDACKI

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a Bloomberg survey. That would take it to the lowest level since late 2011, when Rajoy arrived in office with a pledge to bring down unemployment.

Speaking before the latest labormarket data, Rajoy’s top economic adviser said the government is making “fast” progress, while acknowledging that there’s still a political battle to push that message.

“In economic terms, it’s going quite fast, more than half a million jobs a year is quite fast,” Alvaro

PA NISH Pr ime Minister Mariano Rajoy is finding it hard to sell economic success to voters.While the economy is at the vanguard of growth in the 19-nation euro area this year, an unemployment rate stuck above 20 percent is proving an obstacle to building support in polls with an election just months away.

Data on Thursday will probably show the jobless rate fell to 22.5 percent in the second quarter from 23.8 percent, according to

Nadal said in an interview in his office in Madrid on Tuesday. “Is that fast enough in political terms?

That’s a good question.”

The conservative People’s Party (PP) government is speeding up tax cuts and trying to lower costs for consumers as it pushes against pressure from the Socialists and the anti-austerity Podemos party and entreats voters to focus on its economic record. Carrying the baggage of austerity and hit by a number of corruption cases, Rajoy’s party

risks losing power to alternative coalitions due to electoral fragmentation, even as it continues to lead in polls.

The PP would get 29.1 percent of the votes, leaving it short of a parliament majority, according to a GAD3 poll for newspaper ABC on July 19. It won 44.6 percent in 2011.

Monthly data from the European Union’s statistics office show Spain’s jobless rate was 22.5 percent in May, the second highest in the euro region after Greece. Youth unemployment stood at 49 percent, compared to 22 percent for the euro zone.

Responding to comments from the International Monetary Fund that Spain needs to take on further reforms to tackle structural imbalances in the labor market, Nadal said the pace of job creation is already impressive. On a quarterly measure, unemployment peaked at close to 27 percent in early 2013.

Defending the government’s track record, Nadal said reforms introduced three years ago made Spain more flexible and competitive, which should translate into companies taking on more workers at a faster pace. He added that measures to improve training and education for workers have been approved into law, but need more time to be implemented.

“It should be faster, it’s easy to say,” Nadal said. “Of course, they finger point at the unemployment level, but that’s the stock. The important thing is if the flow is going well, because then the problem of the stock will be reduced.”

WORLD

If anyone is at fault for the corrosive atmosphere of suspicion that now eats at the Tour, it’s Lance Armstrong, not Froome.

It is clearer than ever now that the damage Armstrong did to the Tour wasn’t limited to the seven he won and then lost because he doped.

The American took a big bite out of cycling’s present and future, too, by making the very act of winning suspicious in itself.

Skepticism is healthy. Being duped by Armstrong’s systematic cheating and the systematic lying that covered it up served as a lesson that all remarkable sporting performances must be questioned, and not just those in cycling.

But that’s not to say that they must be systematically doubted, too, especially not without hard, concrete proof of deceit, which is entirely lacking in Froome’s case.

The line between asking the necessary questions and casting aspersions can be a thin one. Commentators who shape public opinion

Bloomberg News

PNB’S 99TH ANNIVERSARY Philippine National Bank officials (from left) Director B35

Jalabert doesn’t flat-out accuse Froome of doping. But he has danced pretty close. The former time-trial world champion and Tour of Spain winner described Froome’s climbing on the stage he won in the Pyrenees as “incredible,”‘’super surprising” and said it left him “speechless.” He also said the performance gulf between Froome and his rivals was “a bit disturbing” and made him feel “a bit uncomfortable.”

Froome, in turn, cried hypocrisy. Jalabert’s prime riding years were when cycling was awash with the illicit use of the blood booster EPO. Jalabert told a French Senate investigation under oath in 2013 that he never took illegal products, but the Senate later published lab test results suggesting the presence of EPO in one of his drug test samples from the 1998 Tour.

Taking issue with skeptical commentators was a tactic Armstrong used to employ, too. Although Froome is perfectly entitled to defend himself, he does need to be careful in taking that route, if

nothing else to avoid any more comparisons with that most infamous of drug cheats.

The most hopeful scenario is that the Tour is now in a transitional phase, stuck between the EPO years and the current crop of riders whose repeated protestations that they are a different, cleaner breed remain hard for some to believe while the bile of Armstrong’s deceit is still so fresh.

If Froome’s performances stand the test of time, as he insists they will, then the next generation of riders may have it easier. Froome can help that process by continuing to be as transparent as possible, answering all the questions that are posed and understanding that questions and skepticism are normal and useful.

With time, and with no scandal, perhaps Froome’s reward will be that those who watch the Tour will relearn that winners aren’t automatically cheats and will learn to forget Armstrong.

Not an easy position for Froome to be in.

But hopefully not as bad as being locked in with that turkey.

B D C

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THE bike of Kenyan-born Chris Froome sports a drawing of a rhinoceros as a statement against poaching. AP

OPENS UP B J K

S On the Tour’s second rest day, Team Sky presented the figures after comments on French TV raised questions about Chris Froome’s performance and incidents in which spectators have booed, spat upon and thrown urine on the rider and his teammates— behavior attributed in part to the unfounded speculation about his speed on the way to victory in Stage 10.

The Associated Press

ISTERON, France—The team of Tour de France leader Chris Froome bowed to pressure on Tuesday and released data about his riding power, heart rate and pedaling rhythm, hoping to quell speculation about doping ahead of an increasingly likely victory in Paris.

On the Tour’s second rest day, Team Sky presented the figures after comments on French TV raised questions about Froome’s performance and incidents in which spectators have booed, spat upon and thrown urine on the rider and his teammates—behavior attributed in part to the unfounded speculation about his speed on the way to victory in Stage 10.

With a three-minute and 10-second lead on his closest rival, and his mountain-climbing nearly unparalleled, Froome said he’s in “a great place” as the three-week race resumes on Wednesday with Stage 17’s 161-kilometer jaunt over four climbs from Digne-les-Bains to an uphill finish at Pra Loup mountain resort.

It’s the start of four grueling days in the Alps. The climax comes on Saturday with an uphill finish at Alpe d’Huez, a day before a largely ceremonial ride for the race winner on the Champs-Élyseés in Paris.

“The third week of the Tour is always unpredictable. You never know how anyone is going to respond,” said American rider Tejay van Garderen, the BMC team leader who is third

overall, 3:32 behind of Froome.

Van Garderen said the British race leader, who won the Tour in 2013 and has never tested positive for doping, has had to deal with “the aftermath” of doping cheats of the past.

“It was clear that he dealt with the heat and dealt with the [first] rest day better than other people did,” van Garderen said of Froome’s Stage 10 victory. “I think it’s very unfair for him to have to deal with all the scrutiny.”

Froome, a Kenya-born Briton, said his team wants to address doubts about Sky’s performances with the release of his rider data.

“I’m not sure if numbers are going to fix everything, but certainly I feel, as a team and myself, we’re definitely trying to be as open and transparent as possible,” he said.

Sky performance analyst Tim Kerrison presented figures, including Froome’s power output, cadence and heart rate on the climb to the Stage 10 finish. The figures showed the rider’s ability to generate vast amounts of power, hitting a top speed of 27.7 kph going uphill.

Kerrison said Froome produced 414 watts and a pedal cadence of 97 revolutions per minute on average on the climb. Froome’s heart rate hit 174 beats per minute, the highest rate that the team has tallied from him in any recent Grand Tour race, and Kerrison called that a sign that Froome had arrived “very fresh” at the foot of that ascent.

Last week France-2 ran a report quoting a doctor, Pierre Sallet, who it said works with statisticians for race organizer ASO, analyzing

Tour riders’ performances. ASO says that is only partly true: It says Sallet’s team does give them data about the race itself, providing such details as where riders are on the road in relation to each other. But ASO says Sallet doesn’t analyze rider’s physiological data.

In the TV report, Sallet cited what he called “a reliable mathematical model” for his calculation that Froome had a maximum aerobic power of 500 watts on the climb, and could generate 7.04 watts per kilogram of body weight. By his count, Kerrison said Froome had produced 5.78 watts per kilogram on average on the climb.

“All athletes we’ve seen above 7 watts per kilo in the past were athletes who were caught in doping affairs,” said Sallet, adding that Froome “must give us information about his physiological profile for his performance to become credible.”

Sky’s Kerrison said the “margin of error” was too great to allow for an accurate assessment of Froome’s physiological profile from the Stage 10 climb results alone.

The TV report interspersed images of some former riders like Lance Armstrong, who was stripped of his seven Tour titles for doping.

“In particular, what France-2 did, putting out that big headline ‘7 watts per kilo’, a picture of Lance Armstrong, a picture of [Jan] Ullrich,” Sky Team Manager Dave Brailsford said, “that was so wildly wrong on so many levels, that actually we just thought, ‘We should just correct that, and give the concrete facts, and give the evidence, so hopefully that people can judge for themselves.’”

SPORTS

Federico C. Pascual, Director P. Florido Casuela and President Reynaldo A. Maclang unveil the Centennial Marker at the bank’s head office in Pasay City. The event heralds the start of the bank’s one-year countdown to its centennial anniversary and the beginning of several activities to foster its relationship with its stakeholders. NONIE REYES

PHL remains Asia’s bright spot–Beltran

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| THURSDAY, JULY 23, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

about the Tour are absolutely right to point out that Froome’s performances on the bike are remarkable, because they are.

Just as when he first won the Tour, the speed at which Froome spins his pedals and his apparent ease on the brutal climbs again make him seem in a class of his own against other podium contenders who have labored.

But to insinuate on that evidence that there’s something fishy about him is wrong. In the feverish atmosphere of suspicion that is Armstrong’s poisonous legacy, commentators must be careful in choosing their words.

One commentator whose words carry more weight than most in France is Laurent Jalabert.

The French former rider reports daily on the Tour for radio and television. Froome has taken exception to some of Jalabert’s comments on his riding. After a roadside spectator shouting “Doper!” hurled a cup of urine at him, Froome argued that “irresponsible” reporting is turning public opinion against him and his team.

FROOME

CHRIS FROOME, Team Director Sir Dave Brailsford and Geraint Thomas attend a media briefing during the second rest day of the Tour on Tuesday. AP

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RANSPORTATION Secretary Joseph Emilio A. Abaya said they have thought of a plan on how the government will move with the P54-billion takeover of the Metro Rail Transit (MRT) Line 3, an initiative that will address the woes of the ailing train system.

The plan, however, can only be executed once Finance Secretary Cesar V. Purisima approves it.

“We were supposed to meet this week, but Secretary Purisima is not around, so we pushed it back to next week. We will discuss how to execute the equity-value buyout of the MRT,” he explained.

“The executive order is standing—it has long been issued— but Land Bank [of the Philippines] and the Development Bank of the Philippines have raised apprehension that they might take a hit or incur losses in the execution of the buyout.”

The transport chief said his camp has formulated a proposal that the government-owned banks are comfortable with, but it still needs to be finalized with the finance department.

“Now, we have a proposal that they are comfortable with. We will meet with Secretary Purisima, so that everyone who is involved here will

EW YORK—The number of global fliers is expected to more than double in the next two decades. In order to carry all those extra passengers, airlines are turning to a technology very few can make work on a large scale: converting trash into fuel.

Sports

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C  A

B L S. M

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BLAME LANCE!

include assessments on right-ofway risk, implementation risk, and other possible risks that may affect the project before, during and after implementation.

Jica earlier estimated in its Mega Manila transport road map that the conduct of the study will amount to P120 million.

Meanwhile, the Infracom also approved the conduct of a feasibility study for the creation of a master plan to develop Metro Cebu.

The feasibility study intends to determine the viability of creating a master plan for the six municipalities and cities of Metro Cebu.

The areas included in the master

DOTC HAS NEW TAKEOVER PLAN FOR MRT LINE 3

Illegal logging at Ipo Dam watershed

Thursday, July 23, 2015 B35

Why airlines keep pushing biofuels: They have no choice

FROOME OPENS UP B J L

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

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INANCE Undersecretary and chief economist Gil Beltran on Wednesday said the Philippines remains a “bright spot”in Asia in the eyes of foreign investors amid uncertainties brought about by world developments, particularly in China and Greece.

Beltran cited Capital Economics’s outlook on Asian economies for the third quarter, which said the Philippines is a “top performer” and is expected to “remain one of the region’s fastest-

PESO EXCHANGE RATES n US 45.2820

growing economies” during the said period due to its strong fiscal position and improving prospects for exports.

“Strong macroeconomic fundamentals and a market-based framework differentiate the Philippines. The market recognizes the sound economic stewardship and deep-seated reforms over the past five years, shielding the economy from external shocks and bolstering domestic demand, buoying the economy,” Beltran said.

Beltran also said the fiscal reforms

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OUNT Maranat in Norzagaray, Bulacan is off limits to loggers. The area, which traverses the Sierra Madre mountain range, is part of the watershed of Ipo Dam, one of Metro Manila’s main sources of water.

Mount Maranat is far from being protected, as a CNN Philippines news crew found out on a hike to its top.

There are many cut logs, so there are more bushes than trees.

On the hike, the crew saw smoke rising from afar, a sign that kaingin is being conducted in the area.

Kaingin is the cutting and burning of trees, which will then be made into charcoal. Locals do this for a living.

A group that calls itself the Sagip Sierra Madre Environmental Society claims that illegal logging and kaingin in Sierra Madre have been going on for nearly three decades.

To counter this, the Aquino administration has been carrying out a National Greening Program since 2011. The Sierra Madre is among its target areas.

But the local office of the Department of Environment and Natural Resources (DENR) says it’s difficult to stop illegal logging.

“Hindi naman talaga natin maiiwasan and we cannot control it 100 percent. Meron pa rin naman talagang nakakalusot,” says Roger

Encarnacion, officer-in-charge of the DENR office in based in Barangay Tabang, Guiguinto, Bulacan.

It’s becoming more worrisome.

Latest photos and videos of the watershed taken this year show the extent of forest damage.

“Talagang warak na warak ang ating kagubatan,” says Martin Francisco, chairman of the Sagip Sierra Madre Environmentalist Society. “Nandidiyan yung paguuling, yung pagkakaingin, paglalogging. At yung pinakahuli itong kiniclean, or nililinis, ang Ipo watershed para mapagtaniman ng mga bagong kokontrata ng NGP.” C C A A

S “PHL,” A

n JAPAN 0.3654 n UK 70.4588 n HK 5.8424 n CHINA 7.2923 n SINGAPORE 33.2150 n AUSTRALIA 33.6494 n EU 49.5657 n SAUDI ARABIA 12.0749 Source: BSP (22 July 2015)

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News

Thursday, July 23, 2015

Takeover plan. . .

be on one page,” Abaya noted.

Search for Manila subway sites begins Continued from A1

plan are Mandaue, Lapu-Lapu, Cebu, Talisay, Naga, Danao and Carcar cities. It will also include the municipalities of Consolacion, Liloan, Compostela, Minglanilla, Cordova and San Fernando.

The feasibility study will also review the master plan’s water-supply component and construction of various infrastructure, such as railways and bridges.

The Infracom also approved the unified financing framework and policy for water supply and sanitation that will be implemented nationwide.

The financing framework and policy will cover all new water and sanitation projects, as well as the expansion and improvement of existing facilities.

The framework will help ad-

dress the situation wherein several agencies are in charge of certain portions of water supply and sanitation. Some of these agencies are the National Water Resources Board (NWRB) and National Irrigation Authority (NIA).

The NWRB is the agency in charge of drinking water, such as those supplied through the Angat Dam, while the NIA’s primary mandate is to ensure water facilities for farms.

The financing framework policy aims to maximize water resources through proper allocation and efficiency, and widen the coverage and address gaps, particularly on sanitation.

These approvals will be submitted to the National Economic and Development Authority (Neda) Board for confirmation. The primary task of the Infracom is to advise the Neda Board, chaired by the President, on

infrastructure policy and projects.

Specifically, the Infracom advises the President and the Neda Board on infrastructure development, including highways, airports, seaports and shore protection; railways; power generation, transmission and distribution; telecommunications; irrigation, flood control and drainage, water supply and sanitation; national buildings for government offices; hospitals and related buildings; state colleges and universities, elementary and secondary school buildings; and other public works.

The Infracom is composed of the director general of the Neda as chairman; secretary of public works and highways as cochairman; and the executive secretary and secretaries of transportation and communications, finance, and budget and management, as members.

The transportation agency hit a roadblock late last year, when Congress decided to scrap the allocation for the buyout from this year’s budget.

“We have to make it clear as to how we will move, then we’ll take it from there,” the Cabinet official said.

Transportation Undersecretary for Legal Jose Perpetuo M. Lotilla has said his group is looking for other means to execute the takeover plan, like tapping lending institutions to bankroll the endeavor. The government has to meet several requirements before it could execute the takeover deal.

First on the list is the need for the state to strike up a compromise agreement with the private partner to signify both parties’ willingness in executing the proposal.

Signing a compromise deal would effectively end the ongoing arbitration case in Singapore that was lodged against the government in 2008 due to its failure, as the operator of the line, to pay billions of equity rentals payment to the owner of the rail system.

But it seems the government is at the losing end, as the MRT Corp., which is controlled by businessman Robert John L. Sobrepeña, is not in favor of the deal. The government aims to fully own the line by 2016.

Should the buyout be completed in 2016, the transportation agency may then bid out the operations and maintenance contract of the line, thereby tapping private-sector efficiency and customer-service orientation for operational needs, while retaining regulatory functions for passenger protection with the government.

Sobrepeña has said the buyout will not result in improvements in the line.

It will only cut local reserves, which can

BusinessMirror

Continued from A1

be used for other social infrastructure projects, the businessman said.

Instead of taking over the railway system, the government must open its ears and listen to the private sector to correct the mistakes of the past and improve the train facility, Sobrepeña said.

His group is proposing to do a “quick fix” solution to make the train system safe for public transport.

Together with foreign firms Sumitomo Corp. of Japan and Globalvia Infrastructuras of Spain, Metro Global Holdings Inc. is proposing to “fix” the ailing system through a $150-million investment that involves the procurement of a total of 96 new train cars, and the rehabilitation of the existing 73 coaches, increasing its capacity by fourfold to 1.2 million daily passengers.

Under the proposal, a single point of responsibility will be implemented, meaning the rehabilitation and the maintenance of the line will be handled by a single company.

Separately, Metro Pacific Investments Corp. is proposing to shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity rental payments.

The group of businessman Manuel V. Pangilinan, which earlier entered into a partnership agreement with the corporate owner of the MRT, intends to spend $524 million to overhaul the line.

The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimillion-dollar expansionplanwoulddoublethecapacity of the line to 700,000 passengers a day from the current 350,000 passengers daily. It was submitted in 2011, but the transportation agency’s chief back then

Illegal logging at Ipo Dam watershed C  A Ipo Dam and Angat Dam are part of Bulacan.

But Gov. Wilhelmino Alvarado says the province can’t do anything to protect its own natural resources.

“Can you imagine, out of 6,000 hectares of Ipo Dam, more than 60 percent are already gone.” says Alvarado.

For his part, Francisco says corruption is hounding the National Greening Program. He claims that those hired by the DENR to plant seeds are themselves also cutting or burning trees.

Once cleared, these lands could be included in the reforestation program. This vicious cycle assures local contractors of jobs planting trees while they also earn from illegal logging.

Provincial environment officer Roger Encarnacion denies this but admits being able to resolve one such case last year, which resulted in the removal of one contractor.

Deforestation could trigger landslides on the watershed. These will cause the dam to become silted and shallow and eventually reduce the water supply of Metro Manila.

The situation gets complicated with the government’s plan to allow hundreds of Dumagat tribe families to build houses and do farming in a so-called buffer zone.

Environmentalists opposed the plan.

“Ang gubat naman kasi, kahit hindi mo taniman – katulad ng Ipo Watershed – kusa siyang nagre-regenerate, ang problema bukod sa kawalan ng forest protection ay pinapayagan pa na ng pamahalaan ang pagdami ng tao sa Ipo. Kahit sila katutubo pero kung nakakasira sa watershed ay dapat itong i-relocate.” says Francisco.

It takes more than just good intentions to protect Mount Maranat. It needs political will to end corruption, to ensure that the program would not fail.

If there is an issue or exposé you would like to disclose, contact jundelrosario@gmail.com or 09997720991/09063261921.

For more investigative reports, watch Headline News at 7 AM, Newsroom at 12 noon, Network News at 6 PM and Nightly News at 9 PM or visit cnnphilippines.com/investigative.

news@businessmirror.com.ph

The Nation BusinessMirror

Former Chief Justice, VP push federal form of govt

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By Rene Acosta

GROUP of academicians, economists, legal scholars, former government officials and politicians on Wednesday formally launched the movement for the amendment of the Constitution by way of a constitutional convention (Con-con) with the sole purpose of decentralizing the “excessive” powers of the national government.

The group, that held a “summit of leaders,” whose purpose is to “secure the country’s future,” wanted the power centralized in the national government to trickle down to the regional, provincial and local levels by way of a federal form of government.

“It is to my submission that federalism is best for a nation characterized by diversity…I can go on and on with the reasons a unitary government cannot succeed in our country, but I will resist that temptation,” said former Chief Justice Reynato S. Puno, who opened the summit.

“Let me conclude with the best offer of evidence to prove that our unitary-presidential form of government has not worked for the people.

This evidence is no other than our

consistent mark as ‘failing state’ by international institutions with no ill motive to downgrade our democracy,” he added.

“We are a basket case. No wonder countries are now throwing their thrash in our backyard. We stink. Something must be rotten in our democracy,” he also said, apparently referring to the dumping of garbage from Canada in a landfill in President Aquino’s home province of Tarlac.

He is spearheading for the revision of the Charter by way of a Con-con through the group “Bagong Sistema, Bagong Pag-asa,” of which he is the convener.

During the summit, former Sen. Aquilino Q. Pimentel Jr. said it is high time that the too much powers vested in the national government be “divested” to local governments by way of a federal system of government.

Pimentel, who attended the summit, along with former Vice President Teofisto T. Guingona Jr., who delivered the keynote speech, wanted a federal system with a presidential form of government for the country.

He said the convening of the Concon should start upon the assumption of the next President next year.

Editor: Dionisio L. Pelayo • Thursday, July 23, 2015 A3

Mamasapano raid: Purisima, Napeñas, 9 others charged

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By Jovee Marie N. dela Cruz

MBUDSMAN Conchita Carpio-Morales on Wednesday approved the filing of charges against former National Police chief Alan LM Purisima, Director Getulio P. Napeñas Jr. and nine other police officers in connection with the Mamasapano raid, that resulted in the killing of 44 Special Action Force (SAF) commandos by Moro separatist rebels and bandits.

Assistant Ombudsman Asyrman T. Rafanan, in a news conference, said that Purisima, Napeñas and Chief Supt. Fernando Mendez Jr. face charges of Grave Misconduct, and violation of Section 3(a) of the Antigraft and Corrupt Practices Act,

or Republic Act 3019.

Rafanan said Purisima also faces a charge of Usurpation of Official Functions under Article 177 of the Revised Penal Code (RPC).

Rafanan said Purisima and Napeñas are also charged with

Neglect of Duty along with Chief Supt. Noli Taliño, Senior Supt.

Richard de la Rosa, Senior Supt.

Edgar Monsalve, Senior Supt.

Abraham Abayari, Senior Supt.

R ay mund Train, Senior Supt.

Michael John Mangahis, Senior Supt. Rey Ariño and Senior Inspector Recaredo Marasigan.

The fact-finding investigation stemmed from complaints filed by Fernando Perito, Pedrito Nepomuceno and Augusto Syjuco Jr. SAF commandos were sent to Mamasapano, Maguindanao, on January 25 to serve warrants of arrest on Basit Usman and Zulkifli Bin Hir, alias Marwan, both with alleged links to the terrorist group Jema’ah Islamiyah.

Usman was able to escape, while Marwan was killed in the raid.

However, Moro Islamic Liberation Front guerrillas and other gunmen ambushed the raiding party and its blocking force resulting in an hours-long gun battle that resulted in the death of 44 SAF commandos.

Binay suit levels playing field

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HE P200-million damage suit filed by Vice President Jejomar C. Binay against Ombudsman Conchita Carpio-Morales, two senators and several others will clear the air in connection with allegations of graft against the former.

Former University of the East Law Dean Amado Valdez said Binay has every right to press charges against the senators, the Ombudsman and several of his critics because it “levels the playing field” between the vice president and his accusers.

Meanwhile, Fr. Ranhilio Aquino, dean of the San Beda Graduate School of Law, appealed to the Makati City Prosecutor’s Office not to deny outright Binay’s complaint, because doing so might send the wrong message about the state of the country’s justice system. Joel San Juan

Economy

A4 Thursday, July 23, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

briefs senator to aquino: fire underperforming dotc, lto execs

Senate Majority Leader Alan Peter Cayetano castigated Land Transportation Office (LTO) officials anew over their refusal to suspend the license plate standardization program despite a notice of disallowance that was already issued by the Commission on Audit (COA).

“LTO, kayo na ang nakaperwisyo at nang-hassle sa delay ng mga plaka, kayo pa ang magpe-penalize sa car owners,” he said in a news statement released to the media on Wednesday.

“The sole mandate of this government is to serve the people, not the other way around. If public officials in agencies like the LTO or the DOTC [Department of Transportation and Communications] fall short of fulfilling this task, or worse, if they repeatedly burden the public with their inefficiencies, then I see no other immediate solution but to fire and replace them,” Cayetano said.

The COA recently disallowed P477,901,329 in procurement transaction between the LTO and the Dutch-Filipino consortium PPIJKG Philippines Inc., saying that the agency’s procurement process violated the procedures in accordance with Republic Act 9184, or the Government Procurement Reform Act. Despite this, LTO Spokesman Jason Salvador said the agency will still push through with the program as there is no “explicit” instruction from the COA to stop it.

Cayetano, however, said until and unless allegations of overcharging and irregularities involving the issuance of new license plates are clarified, collection of fees from vehicle owners should be put on hold.

The senator continued to protest the additional P50 being charged to motorists for registration stickers.

He said the P450 fee is supposed to include license plates, plate screws and registration stickers, but pointed out that motorists are being forced to pay for something already covered by the bidding.

Recto Mercene

dti warns public against ‘fraudulent’ online-shopping sites

BAGUIO CITY—The Department of Trade and Industry Cordillera Administrative Region (DTI-CAR) has warned the public not to be too trusting with online-shopping sites in order to protect their rights.

This was the advice of the DTI as the Digital Filipino web site has come up with a study, which shows that over $34 trillion was spent worldwide on online trading and shopping sites, and that Filipinos are the fifth fastestgrowing market today.

Lawyer Samuel Gallardo, DTICAR Consumer Protection Division chief, on Wednesday said that, while the DTI recognizes the contribution of online shopping to an active economy, the agency cautions buyers when shopping online.

Gallardo added that an online seller must first secure a permit from the Fair Trade Enforcement Bureau of the DTI before conducting business online.

In a news statement issued, the DTI-CAR stated that “online selling is just like any selling platform, the Internet is not devoid of unscrupulous individuals who would take advantage of others in a selling activity whether goods are sold face-to-face or online,” the statement said.

“Consumer rights are not diluted or lessened just because the transaction is done online, Article 50 of the Consumer Act considers practices as deceptive when there is false representation or manipulation in a sale or transaction,” it added.

At present, the DTI is pushing for laws that protect the rights of consumers who transact online. PNA

BusinessMirror

news@businessmirror.com.ph

Zambo City has longest-running power outage in Mindanao–MinDA

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By Manuel T. Cayon | Mindanao Bureau Chief

AVAO CITY—Zamboanga City and its main canning industry is reeling from one of the country's longest-running brownout after the Mindanao grid lost efficiency of its hydroelectric power plants due to critical water level and many of its nonwater generating power supply sent to the repair department for regular maintenance.

The Mindanao Development Authority (MinDA), which hosts the Mindanao Power Monitoring Committee, said that the Zamboanga City Electric Cooperative “ is implementing one of the longest rotational brownouts at a maximum of nine hours per feeder, an average of seven

hours and a minimum of five hours.”

“The Zamboanga del Sur Electric Cooperative 2 is implementing a five-hour brownout per substation,” MinDA said.

Other areas were also unfortunate with the cutbacks on power supply.

MinDA said that the Sultan

Kudarat Electric Cooperative is also implementing a five-hour brownout per feeder, and Surigao del Norte is implementing a 4.5-hour brownout per feeder in its franchise area.

However, the South Cotabato Electric Cooperative 2 has now remained unaffected with load shedding “with modular generator sets providing stop gap supply.”

“Likewise, the Davao del Sur Electric Cooperative is also not implementing any rotationa l brownouts due to their 12 megawatt (MW) modular genset,” the MinDA said.

The Mindanao Power Monitoring Committee (MPMC) disclosed that it noted water levels of Lake Lanao, and Agus and Pulangi dams “to continue to drop in the past few days, breaching critical points as of Tuesday, based on data from the National Power Corp. (Napocor) Mindanao Generation.”

“The water level of Lake Lanao is at 699.24 meters above sea level (masl), as compared to the previous 699.26 on July 17. The normal high water level for the lake is at

701.10 masl, while the minimum operating levels is at 699.15 masl,” it said in a message sent to the BusinessMirror on Tuesday.

Meanwhile, the MPMC said that the water level of Agus 4 “stands at 358.31 masl, which is nearing its minimum operating level of 357 masl, and is lower as compared to 358.88 masl a couple of days ago.

The dam has a normal high-water level of 359 masl.”

“Further, Pulangi 4’s water level is at 280.40 masl as compared to the previous 281.02 masl. The dam, which is in Maramag, Bukidnon, has a normal high-water level of 285 masl and minimumoperating level of 282 masl. It is currently churning out just 20 MW out of 250 MW capacity, largely on account of siltation,” it added.

The MinDA said that the lowwater levels of the dams, "which provide around half of Mindanao’s power supply, has brought down the capacity of the hydropower plants of the Agus-Pulangi Hydropower Complexes. This re-

sulted to lower power supply in areas in Mindanao.”

“Another factor to the lower power supply of Mindanao is the preventive maintenance shutdown (PMS) of the 105 MW Unit 2 of the 210 MW STEAG coal-fired power plant of State Power Inc. (SPI) in Misamis Oriental. Unit 2 has been on PMS since July 18, and is expected to get back online on 16 August,” it said.

As of Tuesday the National Grid Power Corp. of the Philippines announced that Mindanao has a power deficiency of 248 MW. “This prompted distribution utilities and electric cooperatives to undertake measures as necessary, such as voluntary load curtailment, activation of the Interruptible Load Program and tapping of embedded modular generator sets,” the MinDA said.

Based on the latest monitoring of the MPMC, rotation brownouts for each distribution utility and electric cooperative in Mindanao “is averaging at one to four hours per feeder.”

AF Payments exec targets full AFCS activation by September

By Lorenz S. Marasigan

W

hile the online world was quick to criticize the Aquino administration for the new tap-and-go ticketing system, the company behind the technology is more than upbeat to continue improving the payment scheme, its president said on Wednesday.

In a matter of two days, a total of 6,000 tickets were sold, a welcome development since the testing phase for the automatic fare collection system (AFCS) was started on Monday, AF Payments Inc. President Peter Maher said over lunch in Makati City.

“We sold between Monday and Tuesday over 6,000 beep cards, very high rate of takeup of stored-value card. More than 80 percent of tickets sold were beep cards—that’s a very high percentage. We’re very pleased that the public has confidence and were willing to purchase the card and use it immediately. 6,000 is, remember you need to buy the ticket once,” he said.

So far, the whole system is performing well, despite minor glitches in the ticket vending machines, Maher added.

“The gates are performing well.

Ticket machines are performing well.

Personnel in the ticket booth are very

Light Railway Transit Line 2 (LRT-2) commuters try their hand in using the beep card ticketing system’s ticket vending machines on LRT-2 Legarda station during its first pilot test on Monday. PNA

familiar with the computers they are using. I can see becoming proficient in using the tickets quickly,” the executive explained.

The system is currently undergoing its pilot-testing phase, starting with the youngest of Metro

Manila’s train lines, the Light Rail Transit (LRT) Line 2.

Transportation Secretary Joseph Emilio A. Abaya has imposed a two-week target for the complete rollout of the payment scheme at the said railway system.

The department has lined up the activation of the remaining stations in the following order: Betty GoBelmonte; Katipunan; Pureza and J. Ruiz; Cubao; Anonas and Gilmore; Recto; V. Mapa; and Santolan.

Under the testing phase, a lim-

ited number of new single-journey and stored-value tickets, branded as beep cards, will initially be sold for P20 at the line’s stations.

Commuters may purchase them at designated windows and at two ticket vending machines inside each station.

The shift to a contactless ticketing system aims to enable seamless transfers from one metro line to another by unifying their ticketing schemes, and to shorten queuing time for the riding public.

A transition period before completely rolling out the system is needed to identify any possible bugs in the system and to familiarize passengers with the new payment scheme.

Upon its completion, commuters can expect faster payment processes and reduced queuing time for buying tickets, as well as seamless transfers from one rail to another.

All three railway lines will fully transition to the new system by September.

Metro Pacif ic Investments Corp. and Ayala Corp., the lead proponents of AF Payments, are interested in expanding this payment system beyond transport to make money out of their over P3billion investment.

P75-billion budget for AFP Drilon prods Aquino speed up public modernization in 2016 to spending a year before term ends undergo strict scrutiny

T

he proposed P75-billion military modernization budget for 2016 “sticks out like a sore thumb” and will undoubtedly be subject to greater scrutiny in the House of Representatives, a party-list lawmaker said on Wednesday.

“We have yet to see the actual budget proposal, but based on what the Department of National Defense [DND] has announced yesterday [Tuesday], the AFP Modernization Program will get a substantial bump in the 2016 budget, from the current P20 billion to P75 billion. That’s a substantial increase, and if the DND and the AFP think this proposal can get a free pass from Congress because they’re using the West Philippine Sea issue as justification, then they’re wrong,” Partylist Rep Terry Ridon of Kabataan said.

According to the DND, P25 billion of the P75 billion will be used to acquire two frigates, two twin-

engine long-range patrol aircraft and three aerial surveillance radars, and pay for the amortization of 12 FA-50 light fighters.

“While the DND is keen on emphasizing the need to strengthen our nation’s maritime defense, we have to put this budget request in context. Since the enactment of the AFP Modernization Act in 1995, Congress has been appropriating billions for military modernization annually. It’s already 2015, and we still have weak maritime defense and creaking World War 2 era ships. So we need to ask the DND and the AFP to report on where the billions sunk into the modernization program went,” Ridon explained.

As bulk of the budget request of the DND will be for the procurement of new military equipment and facilities, Ridon also said that the budget request is “highly vulnerable to corruption.” PNA

By Recto Mercene

S

enate President Franklin M. Drilon yesterday urged President Aquino to use his remaining months in office to crack the whip on underperforming officials to improve the delivery of services to the people.

He cited the case of the growing problems on the public transport system, as he also expressed concerns over the safety of the riding public who endure the everyday glitches in the Metro Rail Transit Line 3 (MRT 3).

At the same time, Drilon said the government should accelerate public spending in the last year of the Aquino administration, saying that underspending would pull down the country’s economic gains.

“We must be more efficient in spending. The gross domestic product (GDP) has been affected by un-

derspending. What we should realize is government spending is crucial to achieving overall economic growth because 20 percent of the economy depends on government spending,” he said.

In a televised interview on Tuesday, the Senate leader said that the government should come up with the solutions hounding the public-transport system at least in the remainder of the Aquino administration.

“I would like to see in the last year of the President some firm Executive action on transport services. Let’s face it, the MRT 3 is a disappointment,” he said.

“I feel the frustration of our people and so the improvement of services in this area is really critical,” Drilon said, pointing to the recurrent troubles and issues faced by the Metro Manila-based masstransit line—capped off by a train accident last August 14 that left 38

passengers injured.

On Tuesday and Wednesday this week the operations at the MRT 3 were disrupted due to technical glitches.

“So I would like to hear—and I’m sure the public wants to hear—what the administration is going to do, even in the remaining short term, to alleviate the situation of the commuting public,” he then said.

While Drilon expressed disappointment at the state of the transport system, he does not support calls for the resignation of the officials involved: “No, we don’t have to go into that. Let’s provide more attention, closer supervision and monitoring.”

“What is necessary is strong Executive action. Spend what needs to be spent and do what must be done, for the sake of our people. After all, the MRT 3 and other rail systems, are at their essence, a public service” Drilon said.

Economy BusinessMirror

news@businessmirror.com.ph

Govt pushing P1.08-billion rehab of Angat Dam, dikes

By Butch Fernandez

T

he Aquino administration on Wednesday moved to allay experts’ fears of the 30-year-old Angat Dam being damaged by a strong earthquake, affirming a P1.08-billion rehabilitation program to strengthen the dam providing Metro Manila’s water supply.

In a speech after inspecting the Angat Dam facilities—which also hosts the Korean-operated Angat Hydroelectric Power Plant—President Aquino made sure of the availabilty of funding for the Angat Dam and Dike Strengthening Project, which involves mandatory rehabilitation based on dam safety study conducted

by Poyry Energy Ltd. The project, he was informed, would involve “ increasing the height of the impervious core of the Angat Dam and the widening of the downstream slope of the Angat Dam and dikes with the project cost to be borne by the Angat Hydropower Corp. pursuant to the Operations and Management Agreement between the Korean K-Water firm and the government.

Mr. Aquino noted that the Angat Dam system, 60 kilometers northeast of Metro Manila, was built by the National Power Corp.

(Napocor) in the early 1960s as a multipurpose facility to provide domestic water supply for an estimated 97 percent of the Metropolitan Waterworks and Sewerage

System service areas, irrigation for 25,000 hectares of farmlands in Bulacan and Pampanga, and power generation of about 246 megawatts for the Luzon grid of the Napocor, and also for flood control.

Surrounded by the well-forested Angat Watershed, its major structures consist of a 131-meter-high rockfill main dam and a 55-meterhigh rockfill main dike, both of which have inclined earth core.

The Philippine Institute of Volcanology and Seismology (Phivolcs), however, had warned way back in 2002 that the “potentially active” West Valley Fault that runs through central Metro Manila, is “approximately 200 meters east of the main Angat dike and any movement may affect the local fault.”

It added that, in the event that Angat Dam and dikes sustain serious damage, this would disrupt Metro Manila’s water supply and irrigation for farmlands in Bulacan and Pampanga.

“Dam failure would also present considerable risk to lives and properties downstream as the contents of the water reservoir would flood the nearby areas,” a briefer furnished to media stated. It added that“with the safety and reliability of Angat Dam system a matter of national security, strengthening the structures to improve their ability to withstand seismic activities associated with the West Valley Fault is an important and urgent undertaking for the government.”

Thursday, July 23, 2015 A5

Meralco’s Reyes says CSP power-supply deals should be implemented on voluntary basis

A

By Lenie Lectura

Department of Energy (DOE) circular that requires Competitive Selection Process (CSP) in power-supply deals will work best if implemented voluntarily, the Manila Electric Co. (Meralco) said.

Meralco President Oscar S. Reyes, when sought for comment, said the utility firm is not against the implementation of DOE Circular 2015-06-0008. Rather, he pointed out, the CSP’s intended benefits will be maximized if its implementation will be voluntary, to apply where such may be of value or useful, such as rational clusters of small distribution utilities (DUs) who, individually—because of their size, operational characteristics or financial standing—cannot secure contracts with the best prices and terms for their end users.

“Our view is it doesn’t promote the best interest of consumers. It’s a nice concept, an attractive concept, but do it on a voluntary basis. We respect the intentions of the CSP, but make it voluntary,” Reyes said.

The CSP requires all DUs and electric cooperatives to bid out their power requirements instead

of entering into negotiated contracts with power producers or generation companies (gencos).

Meralco sources a good majority of its power requirements through bilateral contracts.

The way CSP is envisioned to work is that the bidding will be conducted by a third party duly recognized by the DOE and the Energy Regulatory Commission (ERC). The International Finance Corp. (IFC) has been tapped by the DOE to conduct a study on the implementing rules for the CSP. The results of which will be forwarded to the ERC. The DOE policy would still require implementing rules and regulations to be issued by the ERC within 120 days after the circular takes effect.

Meralco First Vice President and Regulatory Management Head Ivanna G. de la Peña said separately that Meralco has struck good deals with gencos and this, she pointed

out, has resulted in savings for Meralco customers.

“Why close that venue for purchasing? Some utilities need to aggregate their requirements. But for us large DU, we can enter into bilateral contracts. It’s a case-by-case basis and as such, it should be done voluntarily,” she said.

Meralco said Reyes has yet to submit its position paper to the DOE. He said the utility firm will continue to work with key industry stakeholders in encouraging private investment in power generation, which, it believes, is the underlying intent of the CSP. “The CSP is still up for discussion.

We would like to continue dialoguing with the ERC and the DOE,” Reyes said. When asked if Meralco would volunteer to adopt the CSP, Reyes said the most appropriate model for Meralco would be “a mix of bilateral, voluntary CSP, and WESM [Wholsale Electricity Spot Market].”

“All would be best rather than force the entire DU industry to go into CSP. Different utilities have different requirements. Will the template for CSP fit everyone? Are we sure that all gencos that will participate are serious? I think certain parties maybe interested but some may not want to invest such significant sum if they don’t know the basis for it. In a bidding, when one does not win, that party will object and raise

issues,” Reyes commented.

Former Energy Secretary Carlos Jericho L. Petilla, who signed the department circular, said he expected industry stakeholders to oppose this all the way to the courts.

“For me, this is just common sense. Why is it good and why is it not good? I am quite sure that the DOE will take into consideration any opposition they have but the main reason we will have CSP is transparency,” Petilla had said.

Industry sources said CSP is also meant “to eliminate self-dealing activities in cases when the DU has an affiliate or sister firms engaged in power generation.”

In the power industry, it is known fact that Meralco has a power arm engaged in the generation business, while AboitizPower is also involved in distribution business via Visayan Electric Co., Subic Enerzone Lima Enerzone and Davao Light.

Petilla said the DUs should not worry about the possible financial implications of the CSP when it is implemented. “It will not affect the financials of DUs and ECs because on their books generation is a pass-through cost.”

Aside from transparency, Petilla earlier said that it is also worthy to note that this policy will encourage investments in the power sector because it will not be monopolized by any of the big firms.

Opinion BusinessMirror

A6 Thursday, July 23, 2015

editorial

Toshiba’s tough lessons for Japan

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apan’s corporate-governance code, introduced only a month ago, raised hopes that the country’s ossified corporate culture might finally crack open. The $1.2-billion accounting scandal at Toshiba, which has brought down the company’s CEO and his two predecessors, underscores how much further the country has to go.

After all, venerable Toshiba met one of the new code’s main provisions: The company has included four outside directors since at least 2006—double the number encouraged by the reforms.

And Toshiba remains one of the 400 companies included in a new Tokyo Stock Exchange index for their higher returns on equity and relatively strong governance.

Nonetheless, an external panel found “systematic” and “deliberate” efforts to inflate profit figures at Toshiba over more than six years—the result of pressure from the top to meet unrealistic targets. Cheaters will find a way to cheat in any system, of course. But Toshiba’s case highlights several areas, in which Japan would do well to embrace more stringent corporate-governance reforms.

Simply adding more outsiders to boards isn’t enough. These positions often go to retired bureaucrats who have too little expertise to spot potential problems and too little incentive to ask tough questions. Japan needs to make sure directors are capable of serving as a true check on management, and perhaps eventually, like the New York Stock Exchange, require that the majority of members on a given board are independent.

Perhaps, more important, Japan needs to address a hierarchical corporate culture in which underlings feel unable to resist pressure from above to manipulate numbers or otherwise break the rules. Some structural changes might help. The tight link between seniority and pay needs to be broken, so that sheer obedience and longevity aren’t the only routes to career success. In Toshiba’s case, a whistle-blower appears to have gone directly to regulators with his or her suspicions, at the risk of being fired. Rules similar to those included in the Dodd-Frank legislation in the US could protect employees from retribution if they do the same and also offer them a percentage of any fines eventually levied for wrongdoing.

Conversely, the long-standing practice of allowing senior executives to hang around after retirement in vaguely defined positions—something that may have contributed to the pressure underlings felt at Toshiba—should be discouraged. Companies should be compelled to report the compensation paid to such figures and to justify their roles to shareholders.

Finally, while it makes sense to use market incentives to produce better corporate behavior, Japan needs to get tougher on laggards. Right now, companies that choose not to comply with the mandated reforms merely need to explain to shareholders why they haven’t. Webs of crossshareholdings and a traditionally passive investing culture continue to insulate many of them from any backlash.

Even before looking at making these measures mandatory, regulators should dispel the impression that big-name companies and senior executives are generally safe from serious punishment. In past scandals, wrongdoers have often received suspended sentences or avoided prosecution entirely. In Toshiba’s case, regulators have allowed the company time to conduct its own investigation rather than haul in executives for questioning. Perhaps, many of Japan’s corporate titans can be nudged to do the right thing. Others may require more forceful encouragement. Bloomberg editorial Since 2005

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It is going to get worse John Mangun

OUTSIDE THE BOX

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hese are dangerous and risky times, and anyone who believes otherwise—unfortunately most of the Philippine political class—is simply burying their heads in the sand.

The upcoming earthquake drill brings back memories of the 1990 Luzon earthquake. When it hit, some people panicked and did not know what to do.

Others stood their ground, acting courageous in the face of what would happen next. Still others gathered people together and led them down the highrise stairwell in the darkness to leave the building.

Several events in the last 25 years have called for near extraordinary leadership to figure out what to do and get other people to follow and do what needs to be done.

The economic fallout from the failed 1989 coup attempt, the subsequent earthquake, and the eruption of Mount Pinatubo were disasters that could have had much deeper and much longer effects. The total amount of gross domestic product dropped by over 5 percent from 1989 until it hit the bottom in 1993.

The 1997 Asian economic crisis effectively started on a Friday, June 6th.

The peso was trading at 26 to the US dollar and after the weekend, opened on Monday at 36 to the dollar. The stock market reached its historic high early in the year and by January 1998 was down from 3,500 to just over 1,000 for a loss of about 70 percent.

One of the worst, if not the worst, natural disaster in Philippine history came in November 2013 with Supertyphoon Yolanda. And Yolanda followed Typhoon Pablo almost exactly one year earlier. Millions of people were seriously affected and the cost was measured in the billions of pesos.

Preparations can be made for typhoons and earthquakes, but the real test comes in the aftermath, as no preparations are completely foolproof. Some calamities come without warning like a wayward bus. Other dangers sneak up on you—like the

Asian economic crisis—and the first response may be “I should have seen it coming and I should have done things differently.”

The “experts,” particularly in the financial press and government, look at the big picture and tell us that everything looks good. The US economy is growing even if slowly, so all is good.

Greece has not collapsed and more loans are coming so the problem is under control. The International Monetary Fund (IMF) says that 2015 will show the slowest global growth since 2009.

But that statement is followed by “The IMF expects global growth to pick up again next year.”

It is the data away from the headlines that tell the genuine story.

For the first time in history, the US has more bartenders and waiters than workers in manufacturing. Nearly 25 percent of all Greek businesses are making plans to set their headquarters and operations outside of Greece.

However, the greatest indication of how bad the global economy is can be found in the prices of commodities. The global economic system runs on two commodities: coal and oil.

Forty percent of all electricity comes from coal.

Coal came to the end of a multidecade of rising prices in 2012 but the current price is back to 2003 levels.

And while the US is shifting from coal, it accounts for only 15 percent of global demand. While oil prices are not back

Toshiba exposes Japan’s weak oversight William Pesek

T

BLOOMBERG VIEW

oshiba’s CEO and two other top executives resigned after presiding over a $1.2-billion accounting scandal. Well and good, but when do we see some criminal indictments?

Could Hisao Tanaka really have been unaware that his underlings were fudging the books? Even an internal panel concluded it was management pressure that drove the iconic Japan Inc. manufacturer to overstate profits for at least six years. For Tanaka to suggest he didn’t know is to imply he’s the dimmest CEO ever.

Few are holding their breath waiting for arrests, though, and that should worry a Japan that claims to be in the midst of revolution in corporate governance. Over the past two years, Shinzo Abe’s government has unveiled a raft of initiatives to internationalize business practices—including new codes of conduct, increased transparency, outside board members and a new index for 400 solidly run companies.

Toshiba shows why all this is too little, too late for an insular corporate culture skilled at hoodwinking regulators. This company, remember, already had outside directors before it started

fiddling numbers. And it has yet to be bounced from the JPX-Nikkei Index 400 of companies lauded for “efficient use of capital and investor-focused management perspectives.”

Prime Minister Abe’s efforts to make companies more accountable have always lacked imagination and teeth.

Toshiba is only the latest example of corporate chieftains running amok with scant accountability. How is it that the CEO of deadly air-bag maker Takata, Shigehisa Takada, still has a job? For the same reason no one went to jail for the $1.7-billion Olympus fraud case in 2011 or Tokyo Electric Power and the negligence that has radiation leaking from Fukushima: Japan Inc. answers to no one.

The absence of perp walks looks especially hypocritical after the Julie Hamp fiasco. Yes, the Toyota executive exhibited bad judgment in illegally importing the painkiller Oxycodone (considered a narcotic in Japan). But police arrested her, tipped off the media so TV

cameras could document her humiliation, held her for 20 days—during which she “resigned”—and then decided not to charge her.

The cops said they pounced because Hamp knew she was breaking the law.

By that logic, why did Olympus leader Tsuyoshi Kikukawa avoid prison? (He got only a suspended sentence.) Or Masataka Shimizu, on whose watch Tepco fudged safety reports at its nuclear reactors? And why isn’t Toshiba’s Tanaka in a holding cell for at least the next 20 days?

It’s this chronic permissiveness that Abe says he wants to change. If so, his government needs to take off the gloves.

It’s astounding, for example, that Washington held hearings on Takata’s faulty air bags and Tokyo still hasn’t. Saying that’s just not the Japanese way is unsatisfying.

Abe ignored the will of his people to make an end run around their pacifist constitution so that he can send troops overseas.

Love him or hate him, this prime minister knows how to get his way.

He should start by naming and shaming retrograde CEOs. His government should launch investigations that end in fines that hurt—and in jail time. Next, Abe should set a timeline to end the practice of cross-shareholdings between friendly companies. With the yen down 35 percent, you’d think acquisitive multinational companies would be rushing Japan’s way. Barely a nibble, thanks to intricate takeover defenses that Abe has yet to dismantle.

Then, kill off the corrupting practice of amakudari—literally descent from

to 2009 recession lows, the price has broken the upside trend that began in late 2009 and is down 60 percent from the 2014 high in spite of the world being in an “economic recovery.”

These are the two most economically sensitive commodities on earth and we are seeing a return of “price discovery” as supply and demand takes over the pricing mechanism from the speculators and traders.

Coal traded at $62.79 at the bottom of the 2009 recession; the current price is $62.27. Oil similarly was at about $39 and is now trying to hold above $50.

Other commodities are looking to go into the same kind of negative trend. In the last week, here are some commodity price changes: wheat 6.7 percent lower; sugar dropped 9.5 percent; soybeans fell 2.5 percent; and precious metals just broke long-term support levels.

This is not what you see during an economic recovery and it is going to get worse. When the “worse” starts to unravel, money will flow quickly into the dollar looking for safety and into stock markets looking for returns. The Philippines will survive and then will thrive. But the next two months will be a time for caution and common sense.

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.

heaven. When bureaucrats bank on one day getting plumb, lucrative gigs in industries they oversee, they tend to go easy on offending executives. Abe’s push for more outside directors could actually accelerate the revolving door between public and private sectors. CEOs might see it as a means to reward obliging government officials.

By Abe’s reasoning, the mere presence of outside voices will make Japan more competitive. But Sony has had outside directors for a decade, and it’s spiraling toward irrelevance. Nor have outsiders halted the garish father-daughter brawl over control of furniture retailer Otsuka Kagu. What matters more is the people companies choose. If CEOs can load boards with retired public officials, golf buddies and pushovers, governance reforms are purely cosmetic. And Toshiba shows how one company’s negligence affects others. If Tepco had acted more responsibly, Japan’s nuclear industry wouldn’t have been shut down in ways that eroded Toshiba’s earnings. Toyota and Honda have been pulled into Takata’s mess, too, announcing recall after recall.

Finally, Abe should take the bureaucracy down a peg and create a new corporate accountability board. It would be a drastic step for harmony-obsessed Japan, but one that’s needed to shake up its change-averse corporate culture.

Entrusting the process to ministries and regulators reduces the odds that Abe’s corporate governance revolution will succeed. Japan needs to get bold—and bring the handcuffs.

opinion@businessmirror.com.ph

Opinion

The hunting game

Food for the fullness of life

BusinessMirror

Atty. Ron Erwin L. Esquivel

Msgr. Sabino A. Vengco Jr.

Tax law for business

Alálaong Bagá

I

N 1920 the 18th Amendment to the United States’ Constitution took effect banning the manufacture, transportation and sale of intoxicating liquors; ushering in what is known in history as the Prohibition Era. The move was devised to eliminate criminal activities and to boost the sales of other products and the economy.

However, what materialized was the opposite. Jobs were lost, establishments closed, the economy suffered and crime rate rose.

During the same period, a man named Alphonse Gabriel “Al” Capone, also known as “Scarface,” rose to infamy as the leader of a mafia in Chicago and was branded as one of the most famous and notorious American gangsters.

While manufacturing, transportation, and sale of intoxicating liquor was illegal during the Prohibition, consumption thereof was not. As a result, bootlegging became rampant to cater the underground market and Al Capone was one of the major industry players. In order to dominate the market, he ordered the elimination of threat from rival gangsters. This lead to the infamous St. Valentine’s Day Massacre.

His other activities include gambling, prostitution, bribery, narcotics and robbery. And it seemed that the authorities could not touch him. From all his activities, law enforcers could not find a way to incarcerate him, except for some minor violations. But there is one thing that placed him behind bars for a period of time that really made him suffer: tax evasion.

In the Philippines, we did not experience the Prohibition, but we have a fair share of tax-evasion activities from ordinary taxpayers to big corporations and businessmen. So, what is tax evasion? In the case of Yutivo Sons Hardware Company v. Court of Tax Appeals, G.R. L- 13203, January 28, 1961, the Supreme Court stated that “tax evasion is a term that connotes fraud through the use of pretenses and forbidden devices to lessen or defeat taxes.” In other words, it is a way of defrauding the government of taxes due and to escape the payment of taxes through illegal means.

In order to reduce, and eventually eliminate, tax-evasion activities, the Bureau of Internal Revenue (BIR), the tax arm of the government, enacted Revenue Memorandum Order (RMO) 24-2008, with certain provisions amended by RMO 27-2010, with the objective of providing “policies and guidelines for the development, investigation and prosecution of cases under the Run After Tax Evaders [Rate] Program of the bureau.”

The above-mentioned RMO states that, “under the Rate Program, the bureau is mandated to investigate criminal violations of the National Internal Revenue Code [NIRC] of 1997 and assist in the prosecution of criminal cases that will generate the maximum deterrent effect, enhance voluntary compliance and promote public confidence in the tax system.”

To qualify under the Rate Program, a case must conform to the following conditions: (a) Cases representing violations under any of Sections 254 (Attempt to Evade or Defeat Tax), 255 (Failure to File Return, Supply Correct

and Accurate Information, Pay Tax, Withhold and Remit Tax, and Refund Excess Taxes Withheld on Compensation), 257 (Penal Liability for Making False Entries, Records or Reports, or Using Falsified or Fake Accountable Forms), and 258 (Unlawful Pursuit of Business) of the NIRC of 1997 including onetime transactions, etc.; (b) High-profile taxpayers or taxpayers well-known within the community, industry or sector to which the taxpayers belong; and (c) Estimated basic tax deficiency is at least P1 million per year and tax type, but priority should be given to tax cases where the aggregate basic tax deficiencies for all tax types per year is P50 million or more.

Therefore, any taxpayer falling under the above-enumerated conditions may be subjected to investigation and prosecution of cases under the Rate Program. In order to avoid the same, every taxpayer must be vigilant and should faithfully comply with his tax obligations under different rules and regulations issued by the BIR. It is a simple sacrifice in order to avoid more stringent penalties, interests and surcharges, and possible imprisonment.

It may be a cliché, but just like what they always say, taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for the lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of one’s hard-earned income to taxing authorities, every person who is able to must contribute his share in the running of the government. The government, for its part, is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that it is an arbitrary method of exaction by those in the seat of power.

The bottom line is, whether you are just a simple taxpayer, an established businessman, or a notorious mafia boss, you do not want the government to use its power of taxation to bring you down.

The author is a junior associate of Du-Baladad and Associates Law Offices (BDB Law), a member firm of World Tax Services 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 erwin.esquivel@bdblaw. com.ph or call 403-2001 local 313.

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he hand of the Lord feeds us and He answers all our needs; He is near to all who call on Him (Psalm 145:10-11, 15-16, 1718). Jesus took the loaves and blessed them and distributed them, and all had their fill (John 6:1-15).

You give them food in due season Psalm 145 is a hymn of praise of God’s greatness. Our verses speaking directly to God start off by inviting all of God’s works to give thanks to Him and His faithful people to bless Him. All the wonders of the created world fashioned by God, as well as everything God has done give testimony to the magnificence of the Creator. They can all discourse on the might of the Lord. But above all, His faithful ones can speak of His marvelous deeds on their behalf: How He has freed them from bondage, established them as His people, provided for them in their need, and promised them a secure future.

These covenant partners of God are summoned to bless and honor God in awe and reverence.

The glory (kabod) of God is revealed in His dominion; His loving rule is everlasting, as well as universal. In His divine providence, He provides all living beings with food.

All of life stands trusting before

Him, confident of His generosity.

The goodness and greatness of the Lord is finally manifested by His justice (sedek) and His loving kindness (hesed), the basis of His covenant magnanimity. God is righteous and kind in all His dealings with His creatures. His faithful ones can rely on His provident care: He responds with kindness and salvation to all who call upon Him and relate to Him in love.

He cares especially for the weak and the needy. God watches over all who love Him; He is always there for them.

The crowd followed Him

The miraculous healings done by Jesus had a mesmerizing effect on the crowds. They followed Him around, across the lake and up the mountain.

It could be less out of faith and more out of a hope to see Him perform some of His marvelous deeds and perhaps be benefited themselves.

But the miracles of Jesus are signs, not to be merely looked at, but to be seen through and meditated upon.

Bloomberg View

I

’m worth $10 billion. There, I’ve said it and it feels good.

I’ve always been hesitant about disclosing my wealth, largely because going public creates a lot of problems that average Americans aren’t familiar with: cold calls from financial managers, probing questions from the Internal Revenue Service, family members eagerly awaiting your death, and so on.

But no longer. I’m a free man. And I’d like to thank the person who liberated me: Donald Trump.

Donald and I first met in the 1990s when I was writing a book about gambling, and we intersected again later when I was a reporter for the New York Times. Eventually I wrote a book, TrumpNation, that looked at Donald’s myriad roles as a carnival-barker-cumreal-estate-developer-cum-gambling-

mogul-cum-celebrity. Donald cooperated with the project, and I spent time on his plane, in his cars, at his homes, in his office, and out and about, absorbing some valuable business lessons. After the book came out, I didn’t hear from Donald for a few months. Then, in early 2006, he sued me for $5 billion (half of my net worth!), claiming that the book libeled him because it expressed some skepticism about his wealth.

But Donald had no idea how hard it was to get this right! On a single day in August 2004, he told me his net worth was $4 billion to $5 billion, then revised that later the same day to $1.7 billion. Forbes said at the time he was worth $2.6 billion. A year later Donald told me he was worth $5 billion to $6 billion, but a brochure left on my nightstand at his Palm Beach resort said he was worth $9.5 billion. When I interviewed Donald’s chief financial officer in a Trump Organization

So now, seated in the position of a teacher and his disciples around Him, Jesus proceeded to teach once more everyone. They were on a mountain, where people ascend and God descends; Jesus was where the human and the divine meet.

The large crowd of people meant one thing for the shepherd who directed to have them recline on the grass in the area: they would be hungry and need food. “The Lord is my shepherd, I shall not want. He makes me lie down in green pastures.... He restores my soul” (Psalm 23:1-3). The particular time near the feast of Passover and of the Unleavened Bread set the tone: Everyone was conscious of God’s saving action in the past and of the anticipation for the final age of fulfillment. Jesus with His feeding of the crowd would lead them to a meditative experience of the coming of the messianic age with the appearance of the long-awaited prophet like Moses (Deuteronomy 15:18), making available heavenly nourishment.

Jesus took loaves and blessed them

Faith is necessary to see through a sign. Beyond physical hunger and material bread, Jesus started to incite the faith of His disciples by bringing out the physical impossibility of feeding there and then such a large crowd. As Philip pointed out, “Two hundred days’ wages worth of food would not be enough.” Andrew’s comment after finding a boy with five barley loaves and two fish simply

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underlined the impossible situation: “What good are these for so many?”

But neither money nor a big supply of bread were necessary for the miracle Jesus would do, so that they could experience the saving presence of God through the eating of bread coming from His hands.

In the face of human scarcity and want is the invitation to receive from the divine abundance. The prophet awaited has come with that end-time abundance. The barley man harvests can provide only so much loaves; the bread from the hands of God’s servant can fill all and as much as they want. The fragments left over filling 12 wicker baskets say it clearly: Where this comes from, there is enough for all, to satisfy the need of all of God’s people. But the crowd still did not understand Jesus; they wanted Him king for their physical hunger and material needs. The truth Jesus handed to His disciples was still too much for the crowd’s insufficient faith. He withdrew again to the mountain to be alone with His heavenly Father.

Alálaong bagá, the spiritual teaching of Jesus is more difficult to digest than the excitement of the miraculous. The life we receive from God’s kindness and generosity is full life in all its dimensions, life in Christ.

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.

The myths of political parties in the Philippines Ariel Nepomuceno

O

DECISION TIME

ne of the penalties for refusing to participate in politics wisely is that you end up as “a victim” of a flawed process that will influence your future.

Effective democracies thrive because of strong, established and working political parties. This is particularly showcased by resilient and well-entrenched republics like the United States, the United Kingdom, Japan, Malaysia, and many others where political parties play a critical role in obtaining the collective demands of the citizenry, transforming the same into firm action by the state’s decision-makers, educating the populace on relevant issues and most important, using its ideological foundation to institute meaningful change in the country.

The 2016 upcoming election compels us to reevaluate the role of our current political parties in the strengthening of our democracy, which has remained almost stagnant throughout various stages in our political history.

The existing political parties

remain to be personality and patronage based, popularity driven, and devoid of a distinct ideology and action plan to address the needs of the constituencies that they claim to represent and fight for. This malaise is frequently attributed to the early American political structures imported in bulk and style by our politicians then who hailed from the rich and landed classes in Philippine society.

The fundamental orientation of our earlier political leaders at that time was to defend the status quo, articulate the interests of the elite with a hope of sharing some of the advantages of the supposed democracy to the toiling and marginalized masses in the process.

Participation through the ballot was, in itself, a concession given to the people. This made them believe that at least and at last, they have been given a chance to choose their

Dear Mr. Trump: I’m worth $10 billion, too

By Timothy L. O’Brien

Thursday, July 23, 2015

conference room in 2005 to discuss the range of numbers, the figure shared with me was $5 billion, not $6 billion.

“I’m going to go to my office and find that other billion,” the CFO advised.

My sources at the time—all of whom had worked closely with Donald and had direct knowledge of his finances—believed that his net worth was $150 million to $250 million. Donald attributed those figures to naysayers.

“You can go ahead and speak to guys who have 400-pound wives at home who are jealous of me,” he told me, “but the guys who really know me know I’m a great builder.”

When the net worth confusion appeared in my book, Donald sued, saying that low-balling his riches had damaged his reputation. My attorneys proceeded to get Donald’s tax, bank and property records. We stood our ground, and the suit was dismissed in

2009. Donald appealed, and in 2011 an appellate court affirmed the earlier ruling.

My lawyers deposed Donald for two days during the litigation, and we covered a range of interesting subjects.

Among the documents discussed was a Deutsche Bank assessment that pegged Donald’s net worth at $788 million in 2005. At the time, Donald was telling his bankers and casino regulators that he was worth $3.6 billion; he was telling me he was worth $5 billion to $6 billion.

Have you “always been completely truthful in your public statements about your net worth,” my attorneys asked Donald. “I try,” was his reply.

When they asked him about how he calculated his net worth, he noted that the figure “goes up and down with markets and with attitudes and with feelings, even my own feelings.” Later he added that “even my own feelings affect my value to myself.”

Sadly, our political parties are now loose coalitions that are weak and driven by temporary partnerships whose primary goal is electoral victory. Even the nontraditionals, like the party-list groups, have been slowly devoured by the very same conventional parties.

Some have even openly supported candidates who are diametrically opposed to their advocacies.

leaders, albeit from a limited class of individuals whose concerns radically differ from theirs.

Sadly, our political parties are now loose coalitions that are weak and driven by temporary partnerships whose primary goal is electoral victory. Even the nontraditionals, like the party-list groups, have been slowly devoured by the very same conventional parties. Some have even openly supported candidates who are diametrically opposed to their advocacies. So nevermind the platform, the promises made and the primordial aim of transforming and educating the polity on the value of good governance. Winning

and sharing the spoils of the electoral battle is the end game.

What exactly ails our political parties? Aside from the utter lack of ideological and issue-oriented foundations, they are plagued by the essential gap between solid national and local level supporters; frequent political horse-trading and turncoatism; inadequate organizational management that covers membership concerns; absence of mechanisms like discipline and dismissal or accountability for party assets and funds.

Perhaps solutions can be found in seriously searching for the possibility of passing the proposed political party reform bill, which aims to change current mind-sets about electoral campaign spending such as financing by providing a state subsidy fund for the parties but with very strong penalties on misuse. This bill would also institutionalize party discipline by penalizing political switching. The much-avowed merits of the party-list system should also be revisited as it has failed to become a genuine alternative for our people We must first unravel the myth covering our political parties in order to finally transform our political system into an effective tool for national progress. As the ancient philosophers and historians would claim: Who says politics cannot be our liberation?

Donald and I haven’t been in touch much recently. But when he announced his presidential run last month, waving a document showing a net worth of more than $8.7 billion, I paid attention. When he filed with the Federal Election Commission last week, his net worth had risen $1.3 billion over the course of a month to $10 billion. A warm glow washed over me. After all, I have feelings, too. So I roughed out some numbers over the weekend, and here’s how I feel about the $10 billion I’ve amassed: My wife and I bought a house several years ago for $1.1 million. But we raised our children in it, we have a great herb garden, two dogs, a fleet of groundhogs, and I live there. Value: $6 billion.

I own a Ford Escape Hybrid, which we bought several years ago for about $35,000. Ford stopped making hybrid Escapes, so they’re prized among en-

vironmentally aware drivers. I drive it.Value: $3 billion.

Scottish woolens, German knives, French art (I used to live in Europe). Value: $300 million.

A Japanese kimono, Chinese jades, Thai fabrics (I used to live in Asia). Value: $300 million.

Argentine silver, Chilean wine, an alpaca poncho and a bottle of Inca Kola (I used to live in South America). Value: $300 million.

My son’s collection of Pokemon cards and the future value of any bestsellers I write (I’m planning on defining “best-selling business book of all time” the way Donald did for The Art of the Deal.)Value: $100 million.

Of course, these numbers could change. But Donald has given me a newfound confidence (even though I’m a member of his “loser list”). Next week I just might feel good enough to run for president.

2nd Front Page BusinessMirror

A8 Thursday, July 23, 2015

www.businessmirror.com.ph

BSP won’t tweak rates in case of Fed liftoff

T

By Bianca Cuaresma

he monetary setting and policy environment in the Philippines should be able to withstand the interest-rate hike expected from the US Federal Reserve (the Fed) at some point forward, according to the Bangko Sentral ng Pilipinas (BSP).

Central bank Governor Amando M. Tetangco Jr. told reporters the current monetary-policy settings in the Philippines—at 4

percent for borrowing and 6 percent for lending—need not be adjusted if the only consideration is the Fed’s recent strong hints on a

2015 rate hike.

“Remember, we took tightening measures last year, in 2014.

We increased reserve requirements and rates. Those preemptive measures were designed in anticipation of the Fed liftoff. That was one of the things. Those haven’t been unwound, and they’re still there,” Tetangco said.

“We’re in a good position,” he quickly added.

In 2014 the BSP raised its key policy rates twice on the back of rising inflation. Likewise, the Monetary Board (MB) decided to raise the deposit reserve ratio that keeps the liquidity level in check on the back of an acceleration in money supply.

As to whether recent devel-

opments warrant the need for another preemptive move on monetary-policy setting, Tetangco expressed confidence on the strength of the economy. He said their most recent assessment proved that the country can handle whatever currency vola-tility and other forms of disruptions may be generated down the line.

“Credit is still growing at a reasonable pace. There’s ample liquidity in the system. Domestic demand remains firm, so in the last meeting of the Monetary Board, the assessment at the time was there was no need for additional monetary stimulus. Investment and consumption continued to go up,” Tetangco said.

“At this point in time, the stance

of policy is appropriate,” he added.

Tetangco remained cautious though of possible changes in global markets and, in turn, sentiment shifts in the near term.

“Things can change.… Should there be a need to change the stance, we’ll have to make a decision on which tools to use,” he said.

“On liquidity, I have to relate it to what’s happening to capital flows. If there are outflows as a result of the liftoff, that would contract domestic liquidity. We’ll see if that would require a response,” he added.

Tetangco also brushed aside risks on deflation, saying such were considered “minimal.”

The MB will meet on August 13, its fifth policy meeting this year.

PHL. . .

Continued from A1

of the government, particularly in liability management and tax administration, have contributed in making the Philippine economy resilient to external shocks. “Structural reforms have been put in place; we continue to open up the financial sector and let market forces drive the economy in a level playing field with a clear regulatory environment. Our greater reliance on domestic financing, as well as our emphasis on broadening fiscal space and good management of local government finance ensure we run a tight ship over troubled waters.”