BusinessMirror August 5, 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, August 2014 Vol.5,102015 No. 40 Vol. 10 No. 300 Wednesday,

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U.N. ADVISER BATS FOR ‘DECARBONIZATION’

SPECIAL REPORT

INTEGRATION REMAINS Jeffrey Sachs to ADB: Stop AN ELUSIVE DREAM FOR funding coal-power projects PHL STEEL INDUSTRY

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INSIDE

NITED Nations Special Adviser to the Secretary-General Jeffrey Sachs urged the Manila-based Asian Development Bank (ADB) to “decarbonize” by not funding coalpower projects.

GADGET LUST The brightness of His light

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LMIGHTY God, Your eternal word became flesh to fill us with the brightness of His light. May the brightness we have within because of our faith be reflected in our every word and deed.

May our faith be deeper than the ocean. May our hope stand the test of time. May our daily undertakings lead us to holiness. Amen.

DAILY PRAYERS, VIRGIE SALAZAR AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

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Life

YAHOO! UNVEILS NEW LIVE VIDEO AND TEXTING APP »D2

BusinessMirror

Wednesday, August 5, 2015

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Some bits and pieces on gadget lust ❶ XIAOMI Mi 4i ❷ HUAWEI Honor 7 ❸ SONY Xperia M5 ❹ SONY Xperia C6

B G R Lifestyle & Entertainment Editor

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ELL, that was quick.

Wasn’t it only recently when it was reported in this newspaper and elsewhere that Apple, thanks in particular to its lustworthy iPhone 6 Plus, has become the No. 1 smartphone vendor in China, the largest market for smartphones in the world by sheer population alone, and the market that just about every consumer electronics company, big and small, is eyeing to conquer?

To paraphrase that delicious Dinah Washington song: What a difference a quarter makes.

According to a just-released report by analyst firm Canalys, the Cupertino, California-based company has been bumped off from its Chinese market-leading perch—and bumped off to not only the second spot, mind you, but third place in terms of the number of smartphones shipped and sold in China in the second quarter of 2015. The Canalys report is echoed by a separate one released by the Asia-based market research and consulting firm Counterpoint

Technology Market Research.

Which smartphone vendor delivered the blow to Apple’s fortunes? Most likely, you would assume that it is Samsung, whose twin flagship smartphones, the Galaxy S6 and the Galaxy S6 edge, made splashy debuts in the second quarter. However, according the Canalys report, the global consumer electronics giant based in South Korea could only muster a disappointing fourth-place finish (according to Counterpoint’s report, it finished fifth behind Vivo Electronics Corp., a smartphone vendor also based in China), as Apple’s iPhone 6 and iPhone 6 Plus continued to find greater favor in the Chinese market than Samsung’s latest top-tier offerings.

It was two Chinese companies, however, that took the wind out of Apple’s sails (or sales). According to the Canalys report, Xiaomi, riding on the coattails of its well-received Mi 4, Mi 4i and Redmi Note 4G, took a leading 15.9 percent of the smartphone market in China, while Huawei, spurred no doubt by the huge success of the Honor 7, scored a 15.4-percent share. And Apple’s? A 12.2-percent market share.

Xiaomi has certainly been generating plenty of buzz, not just in China, as the company launched in late July around these part the Mi 4i, with no less than Steve

Vickers, general manager for Xiaomi Southeast Asia, flying in to do the honors. While we haven’t been able to get our hands on the company’s latest smartphone offers, the Mi 4i is apparently targeted at the mid-range market with an octa-core Qualcomm Snapdragon 615 processor, plus dual SIM with dual standby support, 2 gigabytes RAM, higher-capacity battery to provide more juice, 5MP front-facing camera and built-in 16-GB storage. The original Mi 4, on the other hand, features a quad-core Qualcomm Snapdragon 801 processor, 3-GB

B C U. O

Sachs said decarbonization means reaching zero-net carbon-dioxide emissions by 2070. This, he said, will prevent global temperatures from rising by 2 degrees Celsius.

“For the bank [ADB], standards of what is meant by appropriate energy technology and energy investments are very important. Basically, I want to talk you out of coal investments,” Sachs said. “The world’s climate system depends on us getting out of coal.”

S “J S,” A

RAM, 8-MP front-facing camera, and is available in 16-GB/64-GB storage variants.

Unlike Xiaomi’s new mid-range offering, the Mi 4 has no dual-SIM support and a less power-packed battery, but both provide users with no memory expansion as there’s no memory card slot to be found in either smartphones, like in Samsung’s latest flagships—a page obviously taken from Apple’s sealed-off smartphone.

C  D

New mobile video experience THE country’s No. 1 mobile brand Globe Telecom (www.globe.com. ph ph)continues to lead the drive in mobile-data usage in the country with its recent partnership with popular online video web sites YouTube and Dailymotion to further boost video-content consumption and accessibility of the sites on mobile devices with affordable online video bundles.

With the YouTube and Dailymotion Video Bundle, Globe prepaid and TM customers get 100 megabytes of data to access YouTube to watch and stream videos for as low as P10 per day. Customers who subscribe to the promo get extra access to more online videos via another online video site—Dailymotion—a video platform

which attracts 300 million users who watch 3 billion videos on its player each month. Users who avail themselves of the video bundle now have the power to view thousands of videos of their choice with access to the world’s biggest online video databases. Another unique feature of the YouTube and Dailymotion Video Bundle is that it is “stackable”, which means that a customer can register to the promo multiple times, while the current registration is still active so that one can get more MBs to stream more videos.

Globe Senior Advisor for Consumer Business Dan Horan enthuses, “As we continue to revolutionize the mobile landscape and drive the country’s positioning as the ‘digital lifestyle capital of the world,’ we are happy to introduce another groundbreaking offer in YouTube10. We know that Filipinos are heavy consumers of video content, and we are excited to bring YouTube and Dailymotion closer and more accessible to our prepaid customers at a pocket-friendly price on their tablets and smartphones.

“We want to make sure we are making YouTube as enjoyable as possible for our growing base of mobile users in the Philippines.

By working with Globe to create a

more affordable way for people to watch videos on mobile, we hope Filipinos will be able to enjoy a better YouTube experience across devices, either at home or on the go,” said Rajan Anandan, vice president and managing director of Google Southeast Asia and India.

“Dailymotion is always looking to expand its reach across the globe to bring our expansive collection of online video content closer to more users. We are excited to partner with Globe in the Philippines to give avid Filipino users a convenient and affordable way to access our online video database,” shared Clement Gosse, director of partnerships at Dailymotion.

Videos viewed outside of YouTube and Dailymotion will be charged regular browsing rates if not registered to any surf promo.

To keep prepaid load safe from data charges, one can use SurfAlert, which sends customers free notifications for every visit to another site. To learn more about SurfAlert, dial *143#, then select My Account > Turn on mobile internet alerts > SurfAlert.

To start using the YouTube and Dailymotion Video Bundle, customers just need to text YouTube10 to 8888 or via *143#.

LIFE

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BusinessMirror

E1 Wednesday, August 5, 2015

NONIE REYES

WEST GALLERY PLACE Editor: Tet Andolong

Ayala launches West Gallery Place B B S

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N keeping with its legacy of building premium properties, Ayala Land Premier (ALP) recently launched West Gallery Place, a 49-story luxury residential building at Bonifacio Global City (BGC) in Taguig City.

Located at the heart of the upscale High Street South area, the new development combines the luxury of a townhouse-like living experience and a condominium setting.

“West Gallery Place provides another opportunity to live the vibrant, stylish and creative life that High Street South block evokes, while providing something distinctive in character. It’s a location where a premium residence like this will be the superior choice in living spaces,” ALP Managing Director Jose Juan Jugo said.

The new high-rise property is a “sibling” of the East Gallery Place launched in 2013, which was met by a warm market reception.

He noted that the twin towers, which complement one another, solidifies ALP’s presence in BGC’s cultural district with their blend of business and leisure outlets, and landscaped spaces.

There are seven residential concepts spread out in 420 residences that suit different active professional lifestyles cutting across demographic profiles.

Units of West Gallery Place range from 52 square meters (sq m) for a one-bedroom Classic, to an opulent

701-sq-m four-level Villa with an 80sq-m balcony with a breathtaking view of the megacity. Located on the second to the sixth floors are the Courtyard units, which are a mix of one-, twoand three-bedroom suites, which affords a view of Gallery Square, a courtyard separating the villas from the main tower. The three-bedroom Park View Suites have larger than usual areas, with sizes ranging from 213 to 277 sq m up to 84 sq m of balcony in each unit that offers a refreshing outdoor for admiring the cityscape.

Its north wing has two-bedroom 92-sq-m and three-bedroom corner units at 188 sq m, while its south wing has one- and two-bedroom Classic units, with floor areas of up to 69 sq m and 135 sq m, respectively.

Meanwhile, Skycove, with only nine bilevel units with a private deck, boasts of an expansive floor area from 259 sq m to 334 sq m with a view of the eastern or western horizon.

A limited-edition residence with only six units available is the elegant two-level Villa measuring 259 sq m to 291 sq m, with three bedrooms and spacious balconies.

The three-bedroom Skyrise

ONE-BEDROOM classic living and dining

PARK View Suite master bedroom

units, on the 47th and 48th floors, have a 4-meter high ceiling to allow natural lighting and ventilation come into play.

Another prime cut is the four-level Villa with a private lift, wrap-around balconies on all levels, a private swimming pool and an outdoor deck. Designed for buyers who like to welcome and entertain guests, or those with midsized families who love indoor amenities, the Villa is among the most prestigious residences because only two units of its kind will be constructed.

The project’s piece de resistance is the ultra-luxurious Skyrise units at the upper floors, which has only 10 cuts ranging from 200 sq m to 253 sq m.

The 832-sq-m Skyrise 49, the only one of its kind and the sole residence on the said floor, boasts of a lap pool, covered terrace, an expansive outdoor deck and a great hall with a junior master bedroom. Located at the topmost level, it offers unobstructed view of the metropolitan skyline.

“ALP condominium units have a reputation of being luxurious by virtue of the level of craftsmanship, the finishes adorning the units, the size of the units, features and amenities.

By having a large number of residential formats, ALP is offering the luxury of choice to its buyers,” ALP Project Development Group head Leya Moya said.

She said that with this current undertaking, ALP has strengthened its market position as the dominant high-end offering at BGC. She added that like previous developments, the current project is a product of the premier quality in design, innovation and function, which is part of Ayala’s corporate tradition.

Described as “a tower in an island of green,” the building and the East West Gallery are surrounded by Gallery Park and Terra 28th Park, thus, serving like oases and art spaces in the concrete jungle.

ALP Studio Head Arch. Manny Illana said the concept of the Villa brought down the penthouse and created a home out of it. He added that the project factored in the benefits of green spaces to physical activity, psychological well-being and the general health of urban residences.

West Gallery Place will have select establishments on the ground floor to complement the area’s urban landscape, which promotes active lifestyles and community interaction.

He noted that as a prime mover in the Philippine Green Building Council, ALP is advocating the application of green building technologies and practices to the property industry to ensure a sustainable environment.

Such earth-friendly engineering, he noted, is a growing trend in tropical megalopolises in Southeast Asia, especially in the island state of Singapore.

Set for completion by the third quarter of 2021, the project already has a total sales value of P1.6 billion, with unit prices from P13 million for a one-bedroom Classic, up to P234 million for the Skyrise 49. www.ayalalandpremier.com.

B C N. P

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WEST Gallery Place

A sound investment at The Grove

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OWADAYS, people have to be smart about how they use their money and where to put it. Investing on something must yield great worth and value, which is why The Grove by Rockwell is a perfect choice.

A modern oasis nestled in Ortigas in the bustling city of Pasig, The Grove is a true testament of Rockwell’s continuous commitment in developing communities that deliver on five key promises: safety and security, exclusivity, convenience, property management and capital value. It also boasts of a very nature-friendly environment that marries well with the needs of today’s very contemporary lifestyle.

Indeed, as an investor, one can enjoy these basic things that The Grove has to offer, and much more.

Aside from thoughtfully designed units and living spaces, existing and incoming residents can enjoy amenities and facilities that

make everything nothing less than worth it. One real example of this is the newly completed Amenity Deck.

Enclosed in the middle of the residential development’s six towers, residents can enjoy its sprawling lawn and luxurious pool at their own convenience. Its highly accessible location makes it ideal for all residents to engage in all sorts of active or relaxing activities without the hassles of going out the complex. Undoubtedly, it’s an amazing feature, with 8,000 square meters (sq m) of open space that perfectly showcases the resort-like lifestyle of The Grove.

Aside from the Amenity Deck, The Grove also has a Retail Row that will include a wide array of brands, restaurants and services.

As the turn over of the residential towers are coming into completion, The Grove enters into a new phase wherein new additions to the Retail Row are being made to better cater

to the needs of its residents and neighboring communities. Exciting new dining concepts, coffee shops and pubs, such as Asukasa, Burger Pub, Precynct and The Gardens are to be unveiled. A supermarket that will soon cater to the needs

I.T. SUMMIT Information Technology and Business Process Association of the Philippines (Ibpap) President and CEO Jose Mari Mercado (left)

PROPERTY

of everyone is something that many can look forward to, as well.

Last, a real advantage that proves The Grove’s worth and value, especially to investors, is its high investment value, the highest in Pasig, in fact. With an aver-

age rate of P635 per sq m for fully furnished units, a smart investor can take advantage of this opportunity and reap great returns.

Truly, The Grove by Rockwell can more than deliver on what they can offer. With a few more units left,

don’t miss out on the chance to be part of the vibrant The Grove by Rockwell community and experience more than what you’ve expected.

With world-class services and facilities, one can definitely say in the end, “I’ve made a sound investment.”

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briefs the media on the annual International IT-BPM Summit, with the theme “Harnessing Information, Powering Nations, Connecting the World,” during its launchat a hotel in Pasay City. Present during the news conference are Ibpap Board of Trustees Vice Chairman Lito Tayag (center) and Chairman Dan Reyes. ALYSA SALEN

‘August power rates to reflect tight supply’ B L L

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HE Manila Electric Co. (Meralco) said the generation charge for the month of July, which will be reflected in consumers’ August power bills, should reflect, in part, the tight supply experienced last month.

Meralco Utility Economics Head

PESO EXCHANGE RATES

Larry S. Fernandez said there were several periods of yellow alerts in July that will be properly reflected in customers’ bills in August. “There are upward pressures because of the numerous yellow and one red alerts at the start of the month,” the Meralco official said in a text message.

A yellow alert means thin power reserves. This is issued when pow-

US 45.6740

JAPAN 0.3684

er reserves dwindle and fall below 647 megawatts (MW). A yellow alert does not necessarily mean power outages or blackouts, but the situation could turn to a red alert, which means power outages are likely to occur.

The yellow alert issued by the National Grid Corp. of the Philippines (NGCP) was a result of unscheduled

UK 71.1829

HK 5.8911

CHINA 7.3552

shutdowns of some power plants in Luzon and the gas-flow restrictions at the Malampaya facility.

Fernandez said there were instances when the gas flow from the Malampaya facility was restricted, prompting the power plants fed by natural gas to shift to liquid fuel, which is more expensive than gas.

Conclusion

HILE recognizing that the vision to integrate the country’s steel production is still far from becoming a reality, the Department of Trade and Industry (DTI) is now taking steps to address the gaps and challenges in the iron and steel industry.

According to a DTI official who is working with the private sector, the agency is in talks with the Department of Science and Technology to conduct studies on the possibility of establishing upstream and downstream facilities for the steel industry.

“We’ve had meetings with the iron and steel industry on July 10 and 14. We’re at the beginning stages, but we need to do studies first to see

the technical viability of such a project, since an ISM [integrated steel mill] facility will be very capital-intensive. After that, we determine if it’s economically viable,” said the DTI official, who asked not be named.

The ISM being pushed by the private sector, the source said, is a highly capital-intensive project, so it needs to be “thoroughly studied.”

But, the official said, there are still “no talks” on the suggestion of the iron and steel industry for National Development Corp. (NDC), the investment arm of the government, to reacquire shuttered flatsteel facilities.

The Philippine Iron and Steel Institute (PISI), in its road map, floated the idea of acquiring the shuttered flat-steel facilities of Global Steel’s plant C  A

S “P ,” A

SINGAPORE 33.1451

AUSTRALIA 33.2271

EU 50.0313

SAUDI ARABIA 12.1791 Source: BSP (4 August 2015)

A2 Wednesday, August 5, 2015

BMReports BusinessMirror

news@businessmirror.com.ph

Integration remains an elusive dream for PHL steel industry in Iligan through the NDC, an attached agency of the DTI. The NDC, according to the group, should spearhead projects that basic industries like iron and steel need.

Moreover, the industry is also pushing for the government— through the NDC—to begin feasibility studies on an ISM project, with the aim of using the country’s rich resource of iron ore that could be used for a specific type of steelmaking technology.

“There have been several reports of big-volume extraction of iron sands in Region 1. This information has to be investigated further, particularly on the quantity or quality, specific source and size of remaining supply or reserve, because there is a distinct possibility that these materials are suitable,” according to the position paper of steel industry stakeholders submitted to the BOI. “What we have to do now is to start the feasibility studies so we know what kind of technology to use, and determine the amount of investments we can attract for integration projects,” the Pisi said.

According to the stakeholders’ position paper, the ISM project should be done by the DTI and BOI, the NDC, the departments of Environment and Natural Resources, and Energy.

Pisi officials stressed that with the country’s apparent steel consumption estimated to reach 20 million metric tons (MMT) by 2030, and with the integration of the domestic steel industry far from real-

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ity, import dependence is sure to rise—from the present 80 percent to 100 percent.

“We are also looking at specific human-resource skills and competencies that would need to be devel-

oped for the industry. The association has provided a list of these skills, which we would discuss with Tesda [Technical Education and Skills Development Authority] and/or CHED [Commission on Higher Education]

for possible development of technical skills regulations and consideration in tertiary education [even K to 12] curriculum setting,” said Evariste Cagatan, director for Manufacturing Industries Service at the BOI.

This is in response to a request by the industry, which stressed that if the Philippines were to meet the goal of 70-percent production share in the estimated steel demand of 20 MMT by 2020, studies should be conducted

immediately. “We can only know the amount of investments needed and the proper incentives for the industry when these studies are done.

The problems are interconnected in the industry,” said Rolando Narciso, former president of the National Steel Corp.

On the issue of incentives, however, Narciso said the present package offered by the BOI. through the Investment Priorities Plan, may not be enough to lure investors.

“The grant of incentives may need to be restructured [e.g., fixed amount, lump sum, front-end; with ‘blossom or perish’ condition] to ensure early and continuous efficiency improvements and avoid prolonged, unnecessary, yearly dole-outs that breed ‘forever’ infant industries,” Narciso said, echoing the position paper of iron and steel stakeholders.

Aside from streamlining incentives to what it considers as “deserving industries,” the iron and steel industry also backs the proposal to give perks to mergers and consolidations among steel firms, to achieve economies of scale and ensure the idle capacities in the industry are used.

With various reforms put forward by the industry, the low-hanging fruit, Narciso said, is working on the “horizontal issues” the iron and steel industry faces with other sectors.

“To get these capital-intensive projects started, we need foreign direct investments, we need foreign players to come in. But with so many hindrances, transportation, infrastructure and electricity costs, how will we entice them?” Narciso rhetorically said.

news@businessmirror.com.ph

The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Wednesday, August 5, 2015 A3

Coloma: Public funds won’t be used in Roxas’s campaign

Appelate court tells Trillanes: Substantiate bribery claim

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By Butch Fernandez

RESIDENTIAL Communications Secretary Herminio B. Coloma Jr. dared administration critics on Tuesday to prove that Interior and Local Government Secretary Manuel Roxas II is misusing government funds to promote his presidential bid, after President Aquino rejected his resignation and asked him to stay in his Cabinet post.

In a news briefing, Coloma assured that Roxas, having been formally endorsed the administration candidate in the 2016 presidential elections, would relinquish his Cabinet seat in due time, allaying fears that public funds may be diverted to Roxas's campaign after the President asked him to stay in his post a little longer to attend to unfinished tasks.

“Kaya nga ang nais ng Pangulo ay magkaroon ng smooth transition at tinitiyak naman iyan sa

p a ma ma g it a n ng mga partikular na direktiba kay Secretary Roxas at patuloy din naman niyang tinututukan ang mga ipinapagawa sa kanya ng Panroxas gulo,” Coloma explained.

Brushing aside suggestions by election lawyer Romulo Macalintal that Roxas ought to voluntarily step down out of delicadeza, even as the law allows Roxas to stay until after officially filing his candidacy in October, Coloma indicated that the Roxas will step down soon as the President names his replacement.

“At sa takdang panahon ay ipapatupad na po ang pagpapalit ng pinuno diyan [in Department of the Interior and Local Government] dahil kinikilala na-

Group says Tapat election system cheap, easy to use

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HE Commission on Elections (Comelec) has been urged to consider the use of the Transparent Election System (Tapat) amid the legal and other problems surrounding the use of the automated election system (AES) in the coming 2016 polls.

T he use of Tapat is being backed by the Automated Election System Watch (AES Watch) through an on-line petition created over change.org.

Under the technology created by Filipino computer engineers Arnold and Angelo Villasanta, the Tapat system requires voters to shade ballots with the preassigned numbers of their chosen candidates.

Afterwards, the accomplished ballot will be scanned by the optical mark reader.

The machine will then issue a receipt, called voter verified paper audit trail, which will allow voters to double-check if the machine read their votes accurately, before both the receipt and the ballot are dropped into the ballot boxes. “ The Tapat developers, the Villasantas, just built an android program and installed it in the tablet. It’s not rocket science. The Comelec should heed this call,” AES Watch Spokesman Nelson Celis said in a statement.

Tapat's developers said it will only

take three minutes for a voter to fillup the ballots and the whole system will cost only P1 billion.

“The tablets to be used in Tapat are commercially off-the-shelf gadgets. Not only cheap and easy to use, tablet technology is considered mature and there are local companies producing Filipino-made tablets,” Celis noted.

Last month the AES Watch led the conduct of a mock election at the Pamantasan ng Lungsod ng Maynila to showcase the system’s capability, wherein Comelec Chairman Andres D. Bautista and Commissioner Rowena V. Guanzon were among the participants.

While agreeing on the promising features of the Tapat system, Bautista has said that the proximity of the 2016 elections makes it impractical to experiment with a technology that is not yet tried and tested.

The Comelec has kept its two options open in order to comply with the law mandating an automated elections.

The first option is the reuse of the 81,896 Precinct Count Optical Scan machines to be supplemented by the 23,000 Optical Mark Reader (OMR), while the other one is the use of all new OMR units by combining the 23,000 and the 70,977 OMR units to be acquired.

Joel R. San Juan

Cops, troops foil rebel ambush, 4 communist guerrillas killed

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OUR New People’s Army (NPA) guerrillas and a soldier were killed on Monday, after the rebels ambushed a convoy of policemen and soldiers in Masbate.

Four ot her sold iers were wounded in the ambush, which was followed by a 15-minute firefight in Barangay Tuburan, Cawayan, Masbate.

Maj. Gen. Yerson Depayso, commander of the Army’s Ninth Infantry “Spear” Division, said the policemen and soldiers, who were onboard two trucks, were returning to their camps when they were waylaid by the rebels at around 4:30 p.m.

The convoy came from Barangay Cabungahan, Cawayan, where the policemen and soldier conducted joint operations that resulted in the seizure of an Ingram submachine gun and a caliber .45 pistol.

Depayso said that during the firefight, four rebels, who remained unidentified, were killed. A soldier was killed in the first volley of fire, while three other soldiers were wounded.

The bodies of the dead rebels were turned over to local officials for their relatives to retrieve them.

On the other hand, the government fatality was Staff Sgt. Fernando Leynes.

Wounded were Sgt. Pedro Umandap, Cpl. Ian Abonita and Cpl. Rolly Razalo.

Depayso said that another platoon, which is jointly composed of soldiers and policemen, also arrested two rebels and confiscated an M-16 rifle, landmines and a laptop in Barangay Libas, Placer, Masbate.

“The joint Army-police security operations in Masbate is one of the efforts of the security forces to priority areas, wherein the conduct of focused military operations will result to the clearing of rebel-affected areas,” Depayso said.

Masbate and Sorsogon have yet to be declared “conflict-manageable provinces” in the Bicol region. The government seeks to degrade the rebel presence in the two provinces by the end of next year. Rene Acosta

man po na kinakailangan na niya [Roxas] magbitiw at maghanda para doon sa kanyang dapat paghandaan.”

Roxas earlier volunteered to resign his Cabinet post, but Aquino prevailed on him to stay on to complete unfinished business that the President assigned to Roxas, including police capability upgrading and housing projects.

Asked about reported concerns aired that allowing Roxas to retain his post could trigger charges public funds may be used in his presidentiual campaign, Coloma challenged critics to produce a proof to back it up.

“Baka po mas mainam na iyong mga nag-iisip at nagpaparatang niyan ay magbigay ng kongkretong batayan,” Coloma said. “Paano po kaya magagamit iyon [public funds]?

Mayroon po ba kayong kongkretong manipestasyon ng inyong sinasabi hinggil diyan?” he asked.

Groups ask govt to rap Canada over waste dumping

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FTER bringing the case of the Canadian waste dumping in the Philippines before the Secretariat of the Basel Convention, environmental group BAN Toxics (BT) and Seattle-based Basel Action Network (BAN) are now urging the government to do its part.

They want the Philippine government to alert the Implementation and Compliance Committee (ICC) at the Basel Convention should Canada continue to ignore the clamor for that country to take back household waste that it illegally shipped into the country last year.

The groups issued the call after the announcement from the Department of Foreign Affairs (DFA) that it will lodge a diplomatic protest against Canada over its negligence to the treaty.

The Terms of Reference of the Mechanism for Promoting Implementation and Compliance provides that a “party that has concerns or is affected by a failure to comply with and/or implement the convention’s obligations” may submit these concerns to the ICC. BAN Toxic Executive Director Richard Gutierrez said the Philippine government needs to do more than just issue a diplomatic protest in this case.

“It is in the government’s best interest and the interest of the global community to ensure that this dumping will not happen again and that no other countries should suffer the indignity that we are experiencing because of Canada’s non-compliance. The ICC can help ensure this,” he said.

The DFA said it is still waiting for some documents from the Department of Environment and Natural Resources and the Bureau of Customs to back its note verbale to the Canadian Embassy.

BAN and BT had already taken the case of Canadian waste dumping in the Philippines before the secretariat of the Basel Convention, asserting that it is a Basel Convention Annex II waste, export of which should be strictly controlled by Canada in accordance with the rules of the Basel Convention.

The groups said Canada maintained that its domestic laws do not control household waste, indicating that Canada has failed to properly transpose its international treaty obligations into domestic law.

The Basel Convention has adopted the ICC for handling matters of noncompliance. Cases can only be brought to the ICC either by the country out of compliance (Canada), an impacted country, or in this case the Philippines, or by the Secretariat.

The groups believe that the Philippines’s making a submission with the ICC sends a strong signal that international law functions well and provides hope for countries similarly victimized. Jonathan L. Mayuga

By Joel R. San Juan

HE Court of Appeals (CA) has ordered Sen. Antonio F. Trillanes IV to appear before it and substantiate his allegations of bribery against two CA associate justices who ruled against the implementation of the suspension order issued by the Ombudsman against Makati City Mayor Jejomar Erwin S. Binay Jr.

In a resolution written by Associate Justice Stephen C. Cruz of the CA’s Special Fifth Division, Trillanes was directed to appear in the oral arguments on the petition filed by Binay to cite the senator in contempt “for issuing irresponsible statements” against the CA justices handling Binay's petition.

The oral arguments will be held on August 14 at the CA Paras Hall.

“Accordingly, let a hearing be set for oral argument on August 14 at 2 p.m. at the Court of Appeals, Paras Hall, Maria Orosa Street, Ermita, Manila, for the aforesaid purpose,” the resolution said.

The CA believes that the allegations of Trillanes against CA Associate Justices Jose C. Reyes Jr. and Francisco P. Acosta shoud not be left unresolved.

“Be that as it may, we believe that there are matters to be clarified, hence, there is a need to set a hearing to allow parties to be heard and for this Court to propound classificatory questions to the parties or their witnesses,” the July 28 resolution said.

Concurring with Cruz were Justices Ramon Paul L. Hernando and Maria Luisa Quijano-Padilla. The CA ordered Trillanes to explain why he should not be cited for contempt for making baseless allegations.

In his petition, Binay asked the CA to cite Trillanes in contempt for issuing irresponsible statements against the CA magistrates handling the petition of Binay.

Trillanes claimed that Reyes and Acosta received P25 million to rule against Binay’s suspension.

The CA’s Sixth Division, composed of Reyes, Acosta and Associate Justice Eduardo B. PeraltaJr. issued a temporary restraining order and subsequently a writ of preliminary injunction, which indefinitely barred Ombudsman Conchita Carpio-Morales from implementing Binay's first suspension order.

Economy

A4 Wednesday, August 5, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

Palace told: Go beyond ‘hints’ on state workers’ pay hike

T

By Recto Mercene

he Senate has called on Malacañang to unveil the payhike package it is proposing for the nation’s civil servants, if any, so that it can be studied in earnest by Congress and by the state employees themselves.

The call was made by Senate President Pro-Tempore R alph G. Recto, who said that “serious discussions” on adjusting government pay should go hand in hand with the 2016 national budget deliberations.

“We should go beyond hints and teasers, and start tackling proposals on the table,” Recto stressed.

Last week Budget Secretary Florencio B. Abad was reported as “hinting” that a round of salary adjustments in the public sector “is possible” before President Aquino steps down from office in June next year.

Government pay is governed by the Salary Standardization law (SSL). The last and third edition of the SSL was enacted in 2009, and

was implemented in four annual tranches, which ended in 2012.

According to Recto, an “SSL IV” is needed, “but crafting it requires a thorough review and broad consultation.”

“One critical aspect is the funding—the clear sources of funds— must be identified. It is easy to pick a figure. The challenge is to raise the cash to fund the increase,” he said.

On this, Recto said “a budget space” can be created out of next year’s proposed P3-trillion appropriations.

“Kayang gawan ng paraan kung talagang gusto,” Recto said.

He stressed that any pay hike should prioritize teachers, policemen, firemen and soldiers, as they constitute about four-fifths of the government work force.

“Ito ’yung Police Officer 1, Teacher 1, Firemen 1. They’re mostly clustered around the Salary Grade 11 to 13 brackets. They get a basic monthly pay of between P18,549 and P21,436. These are the people who are in need of a salary hike,” he said.

At present, the government’s “Compensation and Position Classification System” has 33 salary grades. Except for Grade 33, which is occupied by one person, the President, each salary grade has eight steps. “So there are a total of 257 pay categories which must be studied and adjusted. There must be distinctions and differentiation between and within the salary grades,” Recto said.

“What makes the job harder is that all of these 257 pay categories must be accommodated within a ceiling, which at present is P120,000 a month—the salary the President gets,” he said.

At the other end of the spectrum is the P9,000 monthly salary of a Salary Grade 1, Step 1 holder, the entry-level position in the government.

Paying the salaries of these employees plus militar y pensioners and veterans cost P746 billion at present. This expense

class is called in budgeting as Personal Services (PS).

With the hiring of more personnel, mostly teachers, plus a rise in the number of uniformed personnel pensioner, PS expenses will rise to P810.8 billion next year.

At present, there are 1,433,186 permanent positions in the national government plantilla.

“Dahil sa laki ng bilang ng empleyado ng gobyerno, when we plan any increase in pay, we should be mindful of the fact that any increase in the salaries of government workers will be shouldered ultimately by their employers—the people,” Recto said.

PS costs have grown by 77.2 percent since 2010, from P457.6 billion to the proposed P810.8 billion in the 2016 budget.

Priority bill

Two lawmakers urged President Aquino on Tuesday to include in his priority bills the measure granting salary increases to the 1.6 million government workers.

Lakas Rep. Ferdinand Martin Romualdez of Leyte and Nationalist People’s Coalition Rep. Rodolfo Albano III of Isabela said that the salary increases for public em-

ployees should be included in the proposed P3.002-trillion national budget for 2016. “The government should find clear sourcing of funds to increase the wages of our state workers. This must be included on the list of priorities,” Romualdez, a lawyer and president of the Philippine Constitution Association said.

“Let us make the government compensation system competitive with the private sector. We should attract competent civil servants and prevent the exodus of professionals seeking better paying jobs abroad,” he added.

Albano said the proposed pay increase for all government workers is one of the commitments made by the President to his “bosses” when he assumed office in 2010.

“Making good on his commitment to the country’s 1.6 million state workers as he ends his term next year would be one of many fitting accomplishments of President Aquino that would concretely prove that he cares and is sensitive to the plight of his bosses,” Albano, a member of the House Minority Bloc, said.

With Jovee Marie N. dela Cruz

Abaya under fire for paying P478M to ‘erring’ supplier of vehicle plates

By Marvyn N. Benaning Correspondent

A

fter escaping criminal charges for approving an anomalous maintenance contract for Metro Rail Transit Line 3 (MRT 3), Transportation Secretary Joseph Emilio A. Abaya now faces a more serious rap— that he allowed a firm to collect P478 million for another dubious deal.

Abaya, who is also the president of the Liberal Party (LP), has been on the carpet for allowing companies partly owned by Marlo de la Cruz, another LP member from Pangasinan, to take over the maintenance of the MRT 3 from Sumitomo Corp., which maintained 73 coaches from Inekon of the Czech Republic for the use of the masstransit system until 2012.

Inekon, the original supplier of the MRT 3 system, has been shunted off in favour of Dalian Locomotive of China, which purportedly do not manufacture coaches for mass transit systems.

The first deal was declared to be illegal by Ombudsman Conchita Carpio-Morales and charges were filed against Al Vitangcol, formerly the MRT 3 general manager and several others.

Another deal was hatched with APT-Global, a company in which de la Cruz acts as a director, but this did not raise any red flag as far as Morales was concerned.

The latest headache of Abaya concerns the alleged rigging of contracts for the Motor Vehicle License Plate Standardization Program (MVLPSP) of the Department of Transportation and Communications (DOTC) and the Land Transportation Office (LTO).

Rep. Terry Ridon of Kabataan Party-list filed House Resolution (HR) 2241 on Tuesday to ask the House Committee on Transportation to investigate Abaya and LTO chief Alfonso Tan Jr. for what he described as the “anomalous” MVLPSP contract awarded to the joint venture of Power Plates Development Concepts Inc. and J. Knieriem B.V. Goes (PPI-JKG).

Ridon said that motor-vehicle owners, bus companies, drivers and even LTO personnel themselves have demanded an investigation into the mess that could probably lead to the filing of charges against Abaya and Tan. In HR 2241, Ridon noted a 10-page Notice of Disallowance was issued to the LTO and DOTC by the Commission on Audit (COA) on June 13, which also advised the two offices to stop further

transactions with PPI-JKG as regard with the supply of license plates.

COA tagged the DOTC deal with PPI-JKG as irregular and illegal, and contravened the provisions of Republic Act 9184, also known as the Government Procurement Reform Act. Irregularities also hounded the award of the contract to the consortium, COA added.

Ridon agreed with COA on the highly irregular holding of a bidding for a P38-billion MVLPSP in 2013, when the General Appropriations Act (GAA) or the budget law only allocated P187 million for the project.

In short, DOTC and LTO were rushing the contract with the full knowledge that the national budget had not appropriated any sum for it.

Government only appropriated the full amount for the project last year. LTO also failed to procure a multiyear obligational authority from the Department of Budget and Management before it issued the notice of award to PPI-JKG for the five-year project, which extends far beyond the end of the Aquino administration.

Moreover, LTO failed to secure a Special Allotment Release Order (Saro) for the project before it issued a notice of award to PPI-JKG. COA also ordered Abaya and Tan to recover the initial payment of P477,901,329 to PPI-JKG and return the same to the national treasury. Ridon also claimed that the PPI-JKG “has not been able to prove itself worthy to handle the project.”

He stressed that PPI itself has been accused of producing bogus license plates. “During a Senate hearing a few months before, LTO officials were not able to produce evidence proving the credibility and reliability of said companies. Reports also say that PPI was previously disqualified from bidding because of its involvement in the production of fake license plates,” Ridon said.

“Some pieces of evidence on their lacking the capacity to handle the project are the complaints regarding the plates being substandard and the very long delay in delivering the plates,” the legislator noted.

“It is only just that Congress immediately intervene and conducted positive measures to avoid further violation of the law and loss of public money…DOTC and LTO officials, primarily Abaya and Tan, must be held liable and accountable for awarding the contract to PPI-JKG and pushing through with the program despite the fact that the procurement process is in violation of the law,” Ridon said.

Daredevils in action

Like a scene straight from an action flick, two glass cleaners use ropes and harnesses to climb the façade of a newly built hotel in Parañaque City. The duo say that risking their lives to reach such heights and perform maintenance work is just part of their regular routine. Nonie Reyes

DOE forecasts 3,108-MW total capacity for Mindanao by 2016

T

he Department of Energy (DOE) said it expects Mindanao to have a total power supply of 3,108 megawatts (MWs) by 2016.

In the budget proposal of the DOE, which cites its targets for 2016, it said that the 2014 dependable capacity and the committed power projects for “Mindanao [grid] totals 3,108 MWs for 2016.”

The DOE noted the projects that were included had a committed status on June 2015.

The expected 3,108-MW capacity

is far from the current supply of 1,232 MW, based on National Grid Corp. of the Philippines’s (NGCP) data on Tuesday, due to the lack of water elevation in most of the dams in Mindanao, as earlier reported by the National Power Corp. (Napocor).

On Tuesday the NGCP said the island lacks a capacity of 58 MW. DOE data, as of June 2015, bared that 1,205 MW of capacity will come online by the end of next year. The power plants are: 300-MW coal-fired Therma South Energy (by Aboitiz

Power Corp.; the 200-MW coal-fired Southern Mindanao power station (Alcantara Group); the 405-MW coalfired FDC Misamis (Filinvest Group); and 300-MW SMC Davao power plant (San Miguel Power Corp.).

For Wednesday, NGCP forecasts a shortage of 115 MW, coming from a power demand of 1,238 MW and a supply of 1,353 MW. Last month the Mindanao Power Monitoring Committee said that Lake Lanao and the Agus and Pulangi dams had dropping water levels. PNA

JCOCPE urged to scrutinize funds for Yolanda rehab, reconstruction

By Jovee Marie N. dela Cruz

T

he Joint Congressional Oversight Committee on Public Ex penditures (JCOCPE) should convene and scrutinize the government’s use of funds appropriated for Yolanda rehabilitation and reconstruction efforts, as well as the government’s use of savings and unprogrammed funds, a lawmaker said on Tuesday.

Rep. Terry Ridon of Kabataan Party-list made the statement following reports of the slow release of funds for Yolanda rehabilitation, as affirmed by former presidential adviser on rehabilitation and recovery Sen. Panfilo M. Lacson Sr. Ridon said that the JCOCPE should particularly look into how the P88.96 billion already released for Yolanda rehabilitation has been utilized and review the sources of the said funds.

“It’s not only Lacson who’s sounding the alarm. Even the United Nations (UN), through the UN special rapporteur Chaloka Beyani, has taken notice of the snail-paced rebuilding and rehabilitation efforts in Yolandastricken areas. There is an immediate need for Congress to review how the Department of Budget and Management [DBM] and our national government agencies are handling the rehabilitation funds,” Ridon said.

Section 99 of the 2015 General Appropriations Act created the JCOCPE to “monitor compliance by agencies with the requirements and/ or conditions under pertinent laws in the utilization of public funds.”

The JCOCPE is composed of seven members each from the Senate and the House, respectively, with one seat allotted for the minority group in each chamber.

DBM earlier said that unprogrammed funds were tapped to fund various housing initiatives under the Yolanda rehabilitation program since there were excess revenue collections certified by the Bureau of Treasury.

Ridon said that the practice of tapping unprogrammed funds has already been questioned by the Supreme Court in light of the Disbursement Acceleration Program controversy.

“Even before we start deliberating the additional P18.89 billion funding request for Yolanda rehabilitation and reconstruction contained in the 2016 proposed budget, a thorough assessment should be done. We need to ask: What are the causes of the rehabilitation and reconstruction bottlenecks? Is the government following public finance laws and regulations strictly with regard to Yolanda funds?” Ridon added.

Meanwhile, the lawmaker also asked the committee to review the Aquino administration’s use of overall savings for fiscal year 2014.

DBM has transferred a total of P7.3 billion from overall savings to augment the budget of the Department of Social Welfare and Development, the National Disaster Risk Reduction and Management Fund, the Contingency Fund, and the budget of the People’s Television Network, according to Ridon.

briefs chinese steel maker eyes trading venture in phl A Chinese government-controlled company is considering to set up a shop in the Philippines for steel trading, a development seen as a reflection that business relations between Manila and Beijing continue to thrive, according to the Philippine Chamber of Commerce and Industry (PCCI).

Local government officials from the Sunshine City (Rizhao City) in the Shandong Province expressed interest in opening up a satellite office, revealed Dr. Francis Chua, PCCI chairman emeritus.

“They want to put up an office in the Philippines to be managed by a company engaged in steel trading. They already import 1.5 million metric tons a year of steel to the Philippines,” Chua said in an interview with reporters.

“They said that there is a difference between the political issue and business, so as far as they are concerned, tuloy ang negosyo. This is a government unit looking at investment opportunities here,” he added.

While talks are still preliminary, Chua said putting up a steel mill is one of the options he has offered. Catherine N. Pillas

palace vows to renew drive against poverty

Malacañang renewed on Tuesday its vow to continue with poverty reduction and social-safety net programs imperative to further improve the quality of life of Filipinos.

Presidential Communications Operations Office Secretary Herminio B. Coloma Jr. issued the statement following the release of latest Social Weather Station (SWS) survey indicating that Filipinos are now more optimistic about their personal prospect and the overall economy.

The SWS survey showed that net personal optimism and optimism about the economy ratings rose to “very high.” “[Survey results] affirm President Aquino’s report to his bosses during his final State of the Nation Address that, indeed, the Filipinos have acquired a highly positive mindset during the past five years,” he said.

Coloma said the President has consistently emphasized the importance of continuing poverty reduction and social programs “so that our bosses” optimism will be brought to full fruition.” PNA

A6 Wednesday, August 5, 2015

Opinion BusinessMirror

editorial

The social costs of govt underspending

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irst, it was the National Economic and Development Authority reporting that 23 socioeconomic projects supported with official development assistance have been delayed in the pipeline because of funding and procurement problems.

Then comes Sen. Ralph Recto telling us that thousands of classrooms that the new K to 12 educational program will require have not been constructed, despite the fact that funds have been appropriated for the purpose. Now, it is Communications Secretary Herminio B. Coloma Jr., on learning that a United Nations official has lamented the inadequacy of the government’s assistance to the victims of Supertyphoon Yolanda of November 2013, promising that funds for the resettlement of the stricken people will be appropriated soon.

What’s wrong with the government’s spending priorities? Why is the government apparently unable to systematize its spending procedures? Why can it not spend budgetary appropriations in the time and place that they are needed?

The answer is not as simple as it seems. First of all, systematic procedures require that the budget of the department concerned must be sufficiently detailed as to provide unambiguous guidance for decision-making by officials concerned; not the lump-sum appropriations that characterize the usual departmental budgets. Detailed budgets require effort and time to prepare, commodities that the uninspired government bureaucrat is loathe devoting time to such duties. Moreover, detailed itemization of budgetary allocations leaves little room for the exercise of “discretion,” making itemization unattractive to officials who have little designs of their own.

The systematization of government spending procedures, thus, requires technical competence and moral integrity on the part of the participants in the spending process. Do not members of our civil service have these qualities? Of course, they do. A possible explanation for the shortcoming is that civil servants, after attaining security of tenure, no longer feel wedded to the lofty standards of service they entered into when they enlisted in the government and have now passively succumbed to the life of the dispirited and the mediocre. A more credible explanation is that the cronies who have been appointed to positions of leadership in the government are not technically and morally qualified for those positions.

As everybody should now know, this woeful spending habit of the government is costing us much. It is reducing the growth rate of our economy and, in the process, diminishing the economy’s capacity to create jobs for the working people, constricting our ability to reduce the income inequality that distinguishes our society. It is preventing the implementation of socially oriented programs that will cure widespread poverty in our midst and enhance the living standards of the Filipino people. Obviously, we cannot allow this state of affairs to persist. One of the steps to be taken involves the technical revitalization of concerned members in the civil service. Another is the dismissal of incompetent department secretaries and their coteries, and having them replaced with technically and morally qualified people.

Must we wait for the next administration to carry out these vitally necessary measures to attune our government to the demands of development?

From the mail: Why share death benefits with illegitimate minor children?

Susie G. Bugante

All About Social Security

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letter writer, Mrs. V, was the legal wife of Social Security System (SSS) member Pedro, who died three years ago. She had been receiving the death pension for three years when it was stopped by the SSS, after a contesting death claim was filed by Ms. A., Pedro’s common-law wife, with whom he had two illegitimate children. Mrs. V would like to know why her pension was stopped, and why should the pension for illegitimate children be taken from her pension as the primary beneficiary.

In response to Mrs. V’s query, it should be pointed out that the suspension of her pension was just temporary, as the SSS had to readjust her pension benefit to take into account Pedro’s two illegitimate children, who are still

minors. According to the socialsecurity law, a member’s primary beneficiaries are the legal spouse and the minor children, whether legitimate, illegitimate or legally adopted.

When Mrs. V’s death-benefit

claim was originally approved, there were no claims coming from the common-law wife. Thus, Mrs. V received the whole death pension. However, with two minor illegitimate children now contesting the death claim, the SSS determined that they also have a right to the pension benefit.

In order to recover the amount that should have gone to the two minor children since their father’s death, the pension benefit to Mrs. V was temporarily stopped. As soon as the children’s share had been recovered and paid to them, Mrs. V’s share of the pension will then be paid.

Meantime, the two minor children will continue to receive their share of the death-benefit pension until they reach their 21st birthday. Once the younger child turns 21 years of age, Mrs. V will once again receive the whole death-benefit pension.

The SSS death benefit of the legal spouse is a lifetime pension, unless

the surviving spouse remarries or cohabits with someone else. In this case, the surviving spouse is no longer qualified to receive the benefit.

Last week this column discussed the increase in funeral benefit, which, effective August 1, 2015, shall range from P20,000 to P40,000. The new funeral benefit consists of the fix amount of P20,000, plus 0.5 percent (not 5 percent as written previously) of the product of the total contributions times the average monthly salary credit.

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

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

Beijing and Tokyo will get torched by the Olympics William Pesek

T

BLOOMBERG VIEW

okyo and Beijing are still celebrating the news that they’ll host the 2020 Summer and 2022 Winter Olympics, respectively. But it’s time to congratulate the real winners: all the cities that have decided to steer clear of competing for the honor.

Last week Boston shocked the International Olympic Committee (IOC) by withdrawing its bid for the 2024 Summer Games, after residents balked at the soaring price tag. Similar outcries in Oslo, Munich and Stockholm led those cities to drop their 2022 bids, leaving the IOC to choose, awkwardly, between two cities (Beijing and Almaty, Kazakhstan) that lack snow and winter-sports cultures.

Winning the Olympics clearly cheered Chinese President Xi Jinping, who’s having a tough year amid slowing growth and plunging stocks.

The news that Beijing will become the first city to stage both the Winter and Summer Olympics offers Xi a fresh opportunity to drum up nationalism among his 1.3 billion people and build on the soft power China amassed during the 2008 Games.

Japanese Prime Minister Shinzo Abe, likewise, hopes to recreate some of the 1964 Olympics magic that propelled Japan into the ranks of the Group of Seven nations. After 20 years of deflation and sliding geopolitical relevance, Abe sees the

Tokyo 2020 Summer Games as an ideal opportunity to reintroduce a resurgent Japan to the international community.

But the leaders of Asia’s two biggest countries might be getting ahead of themselves. There’s a good chance the Games will actually do more harm than good to the trajectories of Asia’s two biggest economies.

Take China, which officially spent between $40 billion and $70 billion on the 2008 Games and got little to show for it, economically, other than debt. “Hosting the Olympic Games is generally thought to boost investment demand in the host country via the construction of facilities and additional tourism,” wrote Goldman Sachs economists Yu Song and Michael Buchanan in a July 2012 report. “But the Beijing Games do not appear to have had this effect on China’s economy.”

China can easily afford the 2022 Winter Olympics. After all, its official 2008 bill amounted to less than 0.5 percent of gross domestic product (GDP). And Beijing has pledged to reuse some of its stadiums and sports

centers from the earlier event. But China’s spending for the 2022 event will likely come at the expense of its economic-reform efforts.

Chinese officials won’t be able to closely monitor the coming explosion in public-works spending. Local governments that have been under pressure to curtail debt will likely find ways to piggyback on the boom. New mini-Manhattans that nobody needs are sure to soon sprout up around Beijing, together with redundant six-lane highways, international airports, five-star hotels, riverside parks, opera houses, museums and high-speed rail projects.

Whatever its impact on the Olympics, this spending will result in an increase in pollution, economic overcapacity and, of course, debt. At about $4 trillion, local government IOUs already exceed Germany’s annual GDP. Outstanding loans for companies and households hit a record 207 percent of GDP in June, up from 125 percent in 2008. A new building bonanza will support GDP in the short run, allowing Beijing to continue putting off painful upgrades into the future. Yet, it will mask China’s worsening debt load until it’s too late. Already, Xi’s team is dragging its feet on shifting China’s growth engines away from excessive debt and toward domestic demand.

Japan seems to be falling into its own complacency trap as the Tokyo Games approach. Officials in Tokyo—from Abe to top lawmakers to Tokyo Governor Yoichi Masuzoe—are increasingly hitching their political and economic hopes to the 2020 event. The government has

declared it wants to show a primary budget surplus by that year, without offering specifics on how it plans to achieve it. Masuzoe, for his part, has said he wants to wrestle back Tokyo’s status as Asia’s financial hub from Singapore by 2020 (again, without saying how to accomplish that goal).

And what year are companies like Honda using as their benchmark to make English their official language?

You guessed it—2020.

“Thing is, 2020 Japan is not 1964 Japan and as it becomes increasingly apparent that Abenomics is not economic Viagra, misplaced hopes are now pinned on the Olympics,” says Jeff Kingston, director of Asian Studies at Temple University in Tokyo. “They won’t be a game changer and currently are at risk of being remembered for all the wrong reasons.”

Those reasons include the spiraling costs of an event the Japanese government had sold to the public as an economical venture. Last month Abe intervened to scrap plans for the main stadium designed by BritishIraqi architect Zaha Hadid as the cost approached $2 billion. But the controversy also put a spotlight on the ways that Japan’s politically connected construction companies pad their bills—a long-standing problem that contributes to the country’s massive public debt, the world’s largest.

If economic ambition were an Olympic event, Asia would be sweeping the medals stand. But, in economics as in sports, it’s hard work that’s rewarded, not facile hopes for miracle improvements. Chances are Tokyo and Beijing will soon wish they had followed Boston in abandoning their bids to play Olympics host.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Compulsory insurance coverage for passengers and cargo of domestic ships Atty. Dennis B. Funa

R

INSURANCE FORUM

epublic Act (RA) 9295, otherwise known as the Domestic Shipping Development Act of 2004, is known for having deregulated the rates for passenger and cargo vessels. It is also noted for having authorized Maritime Industry Authority (Marina) regional offices to issue Certificates of Public Convenience (CPCs). Chapter 5, Section 14 of the Domestic Shipping Development Act of 2004 provides for the legal basis of the compulsory insurance coverage for passengers and cargo of all domestic ship operators. Under Section 3, a domestic ship operator or owner “shall mean a citizen of the Philippines, or a commercial partnership wholly owned by Filipinos, or a corporation at least 60 percent of the capital of which is owned

by Filipinos which is duly authorized by the Marina to engage in the business of domestic shipping.”

Domestic shipping, on the other hand, is defined as “the transport of passengers or cargo, or both, by ships duly registered and licensed under Philippine law to engage in trade and commerce between Philippine ports and within Philippine territorial or internal waters, for hire or compensation, with general or limited clientele, whether permanent, occasional or incidental, with or without fixed routes, and done for contractual or commercial purposes.”

Section 14 makes it a requirement for a domestic ship operator to acquire: “1) Adequate insurance coverage for each passenger in an amount to be computed in accordance with existing laws, rules and regulations, and the total amount of such coverage shall be equivalent to the total number of passenger accommodations being offered by the vessel; 2) Adequate insurance coverage for cargo in an amount to be computed in accordance with existing laws, rules and regulations, and the total amount of such coverage shall be equivalent to the total cargo capacity being offered by the vessel; and 3) If a domestic ship operator should offer both passenger and cargo service, the total insurance coverage shall be in the total sum equivalent to that stipulated in paragraphs [1] and [2] of this section.”

Section 14 further adds that “if a domestic ship operator should operate more than one vessel, the amount of insurance coverage required under this section, for purposes of proving financial capacity shall be the amount equivalent to the total number of passenger accommodations, or total cargo capacity, or both, of the largest operating vessel which the domestic ship operator may have.” Provided that “the total insurance coverage which may be required of any domestic ship operator shall not exceed the value of such vessel.”

Under Sections 16 and 18, Marina shall have the power to impose penalties against those who will fail to maintain the required insurance coverage.

Pursuant to the Implementing Rules (Section 7.4.3.15) of RA 9295, adopted on October 26, 2009, prior to the issuance of a CPC, the applicant must submit insurance coverage for “a) Passenger Insurance Coverage with an aggregate limit of liability in the amount of P200,000 per passenger; and b) Marine Insurance Coverage.” Under Rule 5 (Compulsory Insurance Coverage), it is an annual requirement to submit the following: “14.1.

Adequate insurance coverage for each passenger in an amount not less than P200,000 per passenger; and the total amount of such coverage shall be equivalent to the total authorized number of passengers of the ship; 14.2. The Marina shall require every domestic shipowner or operator to secure adequate cargo liability insurance.”

In addition to compulsory passenger and cargo insurance, Section

15 (Rule 5 of the Implementing Rules) also requires as mandatory the “marine insurance covering liabilities arising out from oil pollution” (Oil Pollution Coverage). This was implemented through Marina Circular (MC) 184, dated February 21, 2003, (Revised Rules Governing Mandatory Cover Against Civil Liability for Oil Pollution Damage). This was mandated under the International Convention on Civil Liability for Oil Pollution Damage (CLC Convention, or CLC Protocol 92). As provided in MC 184, “(a)ll Philippine-registered ships, defined under [paragraph] I are required to be covered by insurance or other financial security for not less than the limits herein set to answer for the liability for pollution damage under the CLC 92.”

As to the amount of benefits, it was originally pegged at P20,000 under MC 40. In 1998 MC 40-A was issued increasing the coverage to P50,000 per passenger. In 1999 it was again increased to P100,000 per passenger under MC 149, with an aggregate limit based on the total passenger capacity. Under MC 149, all passengers were covered whether manifested or unmanifested, ticketed or unticketed.

However, under MC 2009-18, only manifested passengers shall be covered by the insurance; while unmanifested passengers “shall be deemed self-insured by the shipowner/operator for the same amount of P200,000 per passenger,” and the same shall be settled or paid within a period of five days from the recovery of the bodies.

Eventually, under the Implementing Rules of RA 9295, the coverage was increased to “not less than” P200,000.

Interestingly, MC 2009-18 also required a compulsory survivorship insurance coverage of P50,000 for each survivor of maritime accidents (Compensation for Survivors of Sea Accidents). This was, however, suspended by Marina Board Resolution 60, dated March 8, 2010, and deferred for further review.

As of 2008, there were 22 insurance companies, appearing in the IC records, with approved Marina Compulsory Group Personal Accident Insurance policies. Marina, on the other hand, has only approved six companies with Marina compulsory passenger insurance.

These are: Commonwealth Insurance Corp., Phil. British Assurance Co. Inc., Phil. Fire and Marine Insurance Corp., QBE SeaboardEastern Insurance, Phil. First Insurance Co. Inc., and Charter Ping An Insurance.

Senate Bill 1380, An Act Amending Chapter V, Section 14 of RA 9295, was filed by Sen. Bam Aquino seeking to provide for a “no risk, no fault” insurance coverage of all passengers whether manifested or not.

Dennis B. Funa is currently the deputy insurance commissioner for Legal Services of the Insurance Commission. E-mail: dennisfuna@yahoo.com.

Wednesday, August 5, 2015

A7

Export-Import Bank is a tiny but tempting target Megan McArdle

BLOOMBERG VIEW

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N Washington, the high-stakes battles of yesteryear have given way to a grim stalemate, in which Obama doesn’t try to do much of anything, and Republicans half-heartedly try to stop him from doing not very much, and everyone tells reporters how important it all is.

In this extended siege, the strangest skirmish has been over the Export-Import Bank. It’s a tiny government arm—more of a pinky finger, really—that provides subsidized loans to companies selling abroad.

Its importance can be measured by the fact that you may well never have heard of it, or at best, learned of it for the first time when you heard that it was under attack by conservatives.

And yet, it arouses great passion in columnists on both sides.

Joe Nocera has fired the latest salvo over the wall. Railing against the “conservative ideologues” who have thus far kept it from being reauthorized, he writes: “With the Ex-Im Bank, the extreme right has drawn a line in the sand. Given the very real benefits it provides exporters, the time has come for the rest of us to do the same.”

I should probably note at this juncture that I count several of the Ex-Im Bank’s most formidable enemies as good friends; one of them was a reader at my wedding. I have been personally chided by same for pointing out that on the cosmic scale of things, the Ex-Im Bank simply

doesn’t matter. Its impact on the US economy, for good or ill, is trivial.

And yet, columns like Mr. Nocera’s force me to add a codicil: “Nonetheless, count me with the ideologues.”

The Ex-Im Bank is fundamentally indefensible. Mostly what it does is subsidize production for very large firms that are quite capable of getting finance in the traditional way, by going to people with money and asking for it.

So every time the Ex-Im Bank gets involved in a deal, there are only two possibilities: The government is needlessly subsidizing something that would have happened anyway, giving away cheap money to a huge corporation. Or else it’s subsidizing a deal that wouldn’t have happened anyway, in which case we are defending the use of taxpayer dollars to sell cheap manufactured goods to foreigners. It’s not even as if we’re picking out especially needy foreigners, who may require a charitable contribution from the prosperous citizens of the US; the subsidy is distributed on the basis of who is willing to, say, buy cut-rate US airframes. And guess who benefits? US corporations that

export a lot.

This is not a good use of taxpayer dollars, and conservative ideologues, bless their hearts, are quite right to want to get rid of it. Their passion is a little out of proportion to the harm that this agency does, but even a small step in the right direction is better than none. The bank’s opponents concede that. For them, the appeal of taking on Ex-Im is that they might be able to take it down.

Against this impeccable economic and political logic, the bank’s supporters marshal a few arguments.

First, they often claim (as Nocera implies) that the Ex-Im Bank generates a lot of money for the Treasury. Which is sort of true...except. First of all, it doesn’t account for the opportunity costs of the distortion; resources are diverted into production of certain goods, and away from others. And second of all, government accounting for loans is rather weird. According to the Congressional Budget Office, if we used a fair value accounting method, which would account for the risk of changing market conditions, the Ex-Im Bank’s six largest programs would be generating a deficit, not a surplus.

We are also told that Ex-Im is a vital matter of national security.

I’m going out on a limb here, but I’m pretty sure that if the US government needs to find some money to give foreigners as a vital matter of national security, they will manage to find it even if the Ex-Im Bank is shuttered and its silent halls hold only the lingering ghosts of departed exporters.

Supporters of Ex-Im will also say that the economic logic against it applies only in a vacuum. In reality,

other countries are offering these kinds of sweet deals, so the US feels pressure to do so too. Economists at the University of Tampa decided to ask themselves whether this sort of “leveling the playing field” actually helps the US. Their conclusion: This retaliation makes the country worse off, not better, in a world where everyone else is offering subsidies.

Now, of course, that doesn’t mean that everyone in the country is better off if we stick with our free-trading ways. Exporters and their employees would be worse off (which is why defenses of the Ex-Im Bank like to point to the jobs the bank creates). But the subsidy approach we’re using now is hurting the country as a whole. Subsidizing a few big manufacturers at the expense of other taxpayers is not, I submit, the proper aim of US economic policy.

And even if it doesn’t matter on a macroeconomic scale, it does matter on a micro scale. One of the worst features of US government is the grave difficulty of killing off any program, no matter how stupid, because it has a built-in constituency that will rise swiftly and fiercely to its defense, while the broad mass of taxpayers and consumers is very hard to mobilize against something so small.

At the end of his great book on the phenomenon, Demosclerosis, Jonathan Rauch argues that the only way to prune back this crony capitalist tangle is to make relentless war on each daft distortion, not expecting to win with one big battle any more than we expect to “win” the war on crime. Ex-Im is a good example of the sort of program we should kill when we have a clear shot, if for no other reason than pour encourager les autres.

More online, more on mobile: Advertising executive to IOC

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UALA LUMPUR, Malaysia—A leading advertising executive told the International Olympic Committee (IOC) on Sunday that the Olympic body needs to stay relevant with the younger generation and concentrate more of its content on the Internet and via mobile devices.

And the once futuristic-sounding technology of virtual reality will likely be part of the planning.

Martin Sorrell, CEO of advertising agency WPP, said the IOC was in a unique position because its biggest asset was its live content.

“Live sports coverage is the last bastion of high-value traditional programming,” Sorrell said, adding that most consumers want to watch video when and where they choose.

“But they can’t do that with live sports. Its power is its immediacy.”

Sorrell also told the IOC that it needs to stay current by increasing its on-demand content and social media.

“It’s critical to find your voice more than just 17 days every two years,” Sorrell said, referring to the rotation of Summer and Winter Games. “The time is now to engage and inspire, and the Olympic Channel’s time has come.”

Last year the IOC backed the launch of a digital channel to promote Olympic sports between the games and engage with young viewers. The channel will feature material from the IOC’s archives, transmit some international sports competitions and offer a promotional platform for bid cities.

Sorrell said that while the new

channel was a good idea, its content was crucial to its success.

“The IOC needs to create a range of content that is more than archive and TV footage,” he said. “You have the ultimate story platforms—tell stories about the athletes, their families, friends and dreams.”

And he stressed that most of the IOC’s efforts should be via mobile platforms.

“Mobile is a critical factor to engage the world,” he said. “If the IOC and media partners do not seize the opportunity, it risks losing an entire generation of new audiences.”

Sorrell said he expected the next big communication tool would be virtual reality.

“Digital leaders believe that virtual reality could be the next big thing,” he

said. “It allows people from remote locations...to experience a 360-degree video and sound of a distant event as if I was present there in person, virtually.”

He said the technology could become real time in the future.

“You could put on a pair of goggles as though you were an athlete in the stadium, bringing people to the athletes,” he said.

Later Sunday Yiannis Exarchos, CEO of Olympic Broadcasting Services, said virtual reality could be in the Olympic Channel’s plans for next year’s games in Rio de Janeiro.

“It raised a few eyebrows,” said Exarchos, who gave a demonstration of how the digital channel’s mobile app would operate. “But it’s a very important part of the broadcast of the future.” AP

2nd Front Page BusinessMirror

A8 Wednesday, August 5, 2015

PHL economy likely grew slower in Q2–ING

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By Bianca Cuaresma

ocal output—measured as the country’s gross domestic product (GDP)—may have accelerated in the second quarter, but likely at a pace slower than that reported in the second quarter last year, the Manila unit of the Dutch financial-services giant ING Group said.

ING Bank economist Joey Cuyegkeng said the pace of expansion might have acelerated by 6 percent in the April-to-June period this year.

Should the forecast prove spot on, the second-quarter expansion will prove an improvement from the lackluster 5.2 percent reported in the first quarter. But growth at 6 percent, however, should be weaker than local expansion, averaging 6.7 percent in the sec-

Jeffrey Sachs. . .

ond quarter last year.

“The Philippine economy is not immune to the concerns of slower growth…the second-quarter growth should be better than the first quarter of 2015, but slower than the 6.7-percent, second-quarter 2014 growth,” Cuyegkeng said.

The anticipated moderating growth in the second quarter was traced to agricultural production having likely contracted because of a dry spell during the period.

This, however, may have been offset by such positive development, as the acceleration of infrastructure spending during the quarter.

The slowdown in agriculture output was not expected to stoke inflationary fires over the near term.

“Inflation is low, while risks are on the upside, with a more intense El Niño episode in the fourth quarter of 2015 and first quarter of 2016 implying steady monetary-policy settings for now,” Cuyegkeng said.

The economist also said the decelerating economy has affected the sentiment of foreign-currency traders, and, as a consequence, the value of the peso has become rangebound relative to the US dollar.

The peso on Tuesday closed just 5 centavos higher to 45.61 per dollar, from the 45.66 the previous day.

The total traded volume for the day was at $683.4 billion.

The Philippine Statistics Authority is set to release the secondquarter GDP data at the end of this month.

Continued from A1

Sachs said that the latest research on this showed that if the world allows “runaway” climate change to occur under a business-as-usual scenario, this could increase global temperatures by about 4 to 6 degrees Celsius.

If this happens, Sachs said that this would make not only economic growth “unlikely,” but also make life “impossible” in many places around the world. As it is, Sachs said, the world is already in a dangerous position, as global temperatures are steadily rising. “What’s our chance of staying below 2°C To do that, we need to

decarbonize and, essentially, we have to get to zero by around 2070 plus changing the direction of land use, as well,” Sachs said.

At the heart of decarbonisation, he said, is the need to roll out sustainable and green-energy solutions, particularly for the world’s electricity needs.

Sachs said this can be achieved through energy efficiency, decarbonization of power generation, such as veering away from coal-powered investments, and the use of clean energy.

He said the world needs new low-carbon technologies,

US firms need more Filipino medical coders C

hanges in the United States disease-classification system this year would bode well for the local business-process outsourcing (BPO) industry, particularly the health-care information-management subsector, the Information Technology and Business Process Association of the Philippines (Ibpap) said.

“The need for talent is always there, but we’re a little behind in providing the talent, especially in certain areas.

For example, in health care, the biggest demand is in ICD-10 [International Code for Diseases] coders,” Ibpap President Jose Mari Mercado said in an interview.

“When US companies start shifting to [the ICD-10] code, they need more coders to support the demand. There’s not enough in the US, so they’re looking at the Philippines,” Mercado added.

Currently, he said, the US health-care industry is subscribing to a disease-classification system at the nine-digit level.

US companies will be making a shift to the 10-digit standard this year (the ICD-10), and will be in need of authorized and accredited coders, which the Philippines can supply.

According to the Ibpap head, of the

such as storage of renewable energy, zero-emission vehicles, fourth-generation nuclear energy and smart grids based on high renewables.

“In a way, it’s a no-brainer, except that the amount of change it will take in the amount of investments we make and the continuing technological improvements that will be required are large but they’re not technological improvements beyond the current technological potential, they’re technological improvements within sight,” Sachs said.

Meanwhile, Sachs said the final document for the Sustainable Development Goals (SDGs) has been approved by the UN General Assembly on August 3, more than a

150,000 new employees to be hired by the BPO industry this year, as much as 20 percent could go to the growing healthcare subsector. US companies are seen to begin hiring by October.

Mercado said that the shift to the ICD-10 code will lead to “more permanent”opportunities in the BPO industry.

“The reason India was so successful in the IT space is because when Y2k happened, and there was panic that we need so many new coders for the shift, India was the first to supply that need. After that, these same companies saw what they did, and placed them in application development. This ICD10 can be the Y2k of the Philippines,” Mercado said.

“It will open the doors for us to prove our capabilities in the health-care space, specifically in the US market,” he added.

Another growth area, Mercado said, is clinical assistance, or “telemedicine.”

“Clinical assistance is also a growth area, this is a situation wherein USregistered nurses provide health care remotely over the phone but are based in the Philippines. American firms are actually helping local nurses to be registered in the US,” Mercado said.

Catherine N. Pillas

month before 193 countries are set to adopt the goals.

The SDGs aim to end poverty and hunger; promote universal health; education for all and lifelong learning; achieve gender equality; sustainable water management; ensure sustainable energy for all; decent work for all; resilient infrastructure; and reduce income inequality between and among countries.

The goals also seek to create sustainable cities; ensure sustainable consumption and production; take action against climate change; conserve and sustainably use oceans and marine resources; reduce biodiversity loss; achieve peaceful and inclusive societies; and revitalize global partnership for development.

www.businessmirror.com.ph

Power rates. . .

Continued from A1

“The intermittent Malampaya restrictions also meant First Gas plants resorted to use of liquid fuel, while the scheduled maintenance of Ilijan Block A led to a much lower dispatch of Ilijan,” Fernandez said.

The Malampaya facility fuels the 1,200-megawatt (MW) Ilijan, the 1,000MW Santa Rita and the 500-MW San Lorenzo natural-gas plants, which provide around 40 percent of Meralco’s supply requirements. The San Lorenzo and the Santa Rita power plants are owned by the Lopez Group.

But Fernandez could not yet say the actual generation charge, which is a major component of a Meralco bill, that will be reflected in electricity bills in August.

He said Meralco would need to wait for all the billings from its suppliers to have an actual view of rates for August.

“However, we are also awaiting the quarterly repricing of the Malampaya natural gas. We’ll know with more certainty as the bills come in, and plan to announce the August rates on Thursday,” Fernandez said.

Meralco said it does not earn from the pass-through charges, such as the generation and transmission. Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to NGCP. Of the total bill, only the distribution, supply and metering charges accrue to Meralco.

Meralco stressed that, if necessary, it is prepared to call on its Interruptible Load Program (ILP) participants.

“They are being notified in cases when a yellow alert is issued and are asked to confirm readiness to activate, if needed,” Fernandez added.

Under the ILP scheme, big power users are asked to run their own generators when supply is short, particularly in the summer months, instead of getting their power from the Luzon grid. In exchange, they will be compensated for their fuel costs.

The electricity that would not be taken from the grid would be available to households and other users, sparing them from rotating blackouts.

The ILP program, however, is a volunteer program.