BusinessMirror August 25, 2015

IS A REPEAT OF ASIAN CRISIS IN THE OFFING? A

SIA’S biggest economy is slowing, the Federal Reserve (the Fed) is about to kick off an interest-rate tightening cycle, and China has just devalued its currency. That chain of events back in 1994 eventually touched off a round of competitive currency devaluations that helped trigger the Asian financial crisis, featuring bank and corporate failures and recessions across much of the region.

Is the current market turmoil foreshadowing yet another reg ion-w ide bu st? T here a re certainly parallels, but important

RAUL RODRIGUEZ sweeps the floor of the New York Stock Exchange after the close of trading on August 21. The Dow Jones industrial average has plunged more than 530 points and is in a correction, amid a global sell-off sparked by fears about China’s slowing economy. Oil tumbled below $40 per barrel for the first time since the financial crisis. AP

2006, 2010, 2012

U.N. MEDIA AWARD 2008

A broader look at today’s business Saturday 2014 25, Vol. 10 No. 40Vol. 10 No. 320 Tuesday,18, August 2015

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BSP allows peso to fall to new five-year low B B C

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HE peso was at its lowest in more than five years at the close of Monday’s trading, having lost 31.5 centavos at the local currencies market to 46.815 per dollar, its weakness attributed to a global rout that, in turn, was traced to a suspected deepening of economic malaise in China.

INSIDE

WHAT A RACE! BusinessMirror

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| TUESDAY, AUGUST 25, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

Nevertheless, the Bangko Sentral ng Pilipinas (BSP) allowed the local currency to adjust to market conditions and refused to make its presence felt at the Philippine Dealing System (PDS).

Data from the PDS show that the peso shed about a third of its last traded rate from a week earlier, when a holiday shortened the trading week by a day.

The total traded volume aggregated only $572.5 million from the

$699.7 million on Thursday last week. The peso’s weakness was attributed by one currencies trader to global developments and to the accumulated reaction of the market unable to trade last Friday, which was a national holiday.

“The local financial markets have recently been greatly affected by external developments, including the shift in the Chinese yuan to a more market-influenced foreign exchange C  A

SPECIAL REPORT

WHAT A RACE! Sure, for Usain Bolt, the winning result, the bow-and-arrow victory celebration and even the setting may have been the same as 2008.

But the show he put on Sunday in a .01-second victory over Justin Gatlin at the Bird’s Nest was something very different.

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The Associated Press

EIJING—A heart-stopper. A lean at the line.

A next-to-nothing margin over a more-thangame challenger.

Sure, for Usain Bolt, the winning result, the bow-and-arrow victory celebration and even the setting may have been the same as 2008. But the show he put on Sunday in a .01-second victory over Justin Gatlin at the Bird’s Nest was something very different.

Bolt crossed the line in 9.79 seconds—pedestrian by his standards. Yet it very well may have been his greatest race ever.

“My coach said, ‘You’ll have to run 100 meters if you’re going to win the race,’” Bolt said after capturing his record ninth career gold medal at world championships. “So I ran 100 meters.”

The 29-year-old Jamaican came in hurting and anything but race ready—a far cry from seven years ago, when he put his stamp on the Beijing Olympics in the same stadium by slowing down and bringing his hands out to his side to start the celebration with 20 meters left. Even with that, he crossed the line in a then-world-record time of 9.69 seconds.

By now, that’s ancient history, and the proof was in the results from the last two years. Gatlin has been dominating the sprint game, while Bolt has spent more time rehabbing than racing.

The problems carried right into Sunday. Bolt’s semifinal run—normally a stress-free jog—turned dicey when he stumbled on his fifth step out of the starting block. He was in sixth place more than halfway through and had to push to beat out Trayvon Bromell.

In the next semifinal race, Gatlin breezed, just as he had the night before in the heats. Set against each other, those performances turned Gatlin into the betting favorite, and who could argue?

And so, the stakes were set: The world-record holder and track’s happy warrior against a twice-convicted doper, who also won the 100 at the 2004 Olympics and the world championships in 2005.

That Gatlin burst from the blocks faster was no surprise; Bolt was his typically slow self in unfurling his 6-foot-5 frame from the start.

That Gatlin was winning at the halfway point wasn’t too shocking, either. “The best part of my race is usually the end,” Bolt said.

At 80 meters, the math started changing. Bolt drew to within a step but Gatlin was holding him off.

Then, with about 15 meters left, Gatlin over-strided, then did it again, then started leaning toward the line. Bolt stayed upright, crossed with a big kick and with his chest pushed forward. A sliver of space for a man who wins by body lengths.

After eyeing the scoreboard, Bolt punched his right fist down and kicked his left leg up, a clearly unchoreographed celebration for a man who often starts planning them while the race is still going. It was the closest 100 final at the worlds since 2003, when Kim Collins edged Darrel Brown by .01.

“At the end of the day, I guess I would say I gave the race away the last five meters,” Gatlin said.

A bitter pill for the 33-year-old ex-champ, who handled it with his typical class, but still gets asked about his doping past no matter what the result.

“He served his suspension, and all of a sudden, selfrighteous people who’ve never done anything wrong in their lives want to vilify him,” said Gatlin’s agent, Renaldo Nehemiah.

Also winning gold medals on Sunday were Jessica Ennis-Hill of Britain in the heptathlon, Joe Kovacs of the United States in the shot put and Pawel Fajdek of Poland in the hammer throw.

Gatlin will presumably get another

LOVE WINS, WOODS STRUGGLES G

REENSBORO, North Carolina—Davis Love III’s long victory drought is over. Tiger Woods will have to wait a while to get another chance.

Love won the Wyndham Championship on Sunday to become the third-oldest winner in Professional Golfers’ Association (PGA) Tour history, while Woods’s season came to an abrupt end.

The 51-year-old Love closed with a 6-under 64 for a one-stroke victory over Jason Gore.

“Any victory now is going to be really sweet when you’re over 50,” Love said.

The dominant storyline all week at Sedgefield Country Club was the mere presence of Woods, who needed a victory to earn a spot in the FedEx Cup playoffs opener next week.

He was poised to challenge on Sunday, starting just two strokes off the lead. But he only had one birdie during his first 10 holes, dropping way off the pace with a triple bogey on the par-four 11th. Woods shot a 70, finished four strokes back and ended at No. 178 in the standings, well outside the cut-off of 125.

“I gave myself a chance, and I had all the opportunity in the world today to do it,” Woods said. “I didn’t get it done.”

Now comes a break before his next tournament, the Frys.com Open in October in northern California. It’s the first event of the tour’s 2015 to 2016 season.

“This is my offseason right now,” he said.

Love—who started at No. 186—played himself into The Barclays by earning 500 FedEx Cup points and $972,000 in prize money.

At 51 years, four months and 10 days, Love trails only Sam Snead and Art Wall on the tour’s age list. Snead won the last of his eight Greensboro titles at Sedgefield in 1965 at 52 years, 10 months and eight days, and Wall took the 1975 Greater Milwaukee Open at 51 years, seven months and 10 days.

Love has 21 career victories, three in Greensboro. His previous two wins came across town at Forest Oaks in 1992 and 2006, and he had just one win since then—at the 2008 Children’s Miracle Network Classic in Florida.

“To have your name thrown out there with Sam Snead at any point is incredible,” Love said. “For some reason, this tournament has been good to guys in my age group.”

Love finished at 17-under 263. Gore, the third-round leader, shot a 69. Scott Brown (68), Charl Schwartzel (66) and Paul Casey (67) were two strokes behind Love.

Love, who was four strokes back after three rounds, started strong with four birdies and an eagle on Nos. 2 to 6. He moved to 17 under with an eagle on the par-five 15th—the first of his career during a competitive round on that hole.

He closed with three straight pars, walked off the 18th green with a two-stroke lead over Brown and Gore, and headed to the range to hit a few shots and rest up for a possible playoff.

“You don’t really know what to do,” Love said. “You don’t go to the cabin and think that you’ve won.”

Brown pulled within one stroke of Love with a birdie on 15, and Gore made things even more interesting with an eagle on that hole.

Neither got any closer.

Brown hit his approach on the 18th to about 60 feet, left his putt about 10 feet short and three-putted for bogey.

Gore needed to make a 50-foot birdie putt on 18 to force a playoff, but he left it about a foot short to wrap up the victory for Love.

“I told my coach starting today, ‘17 is a playoff and 18 is a winner,’” Brown said.

PHL’S SLOW BUT EXPENSIVE INTERNET SERVICE

USAIN BOLT (right) crosses the line in 9.79 seconds—pedestrian by his standards. Yet it very well may have been his greatest race ever. AP

chance at gold, and another chance at Bolt, on Thursday in the 200-meter final—the race Bolt has always called his favorite.

No matter how it goes, there figures to be some drama and tension between these two over the next 11-1/2 months, as the lead-in to the Olympics in Rio de Janeiro heats up.

In Rio, Bolt will try to make it 3-for-3 at the Olympics in the 100, 200 and the 4x100 relay. He’ll go there having proven something that most long-time champions have to prove sooner or later: That he could win a close one when he wasn’t close to his best and his opponent was.

“Ask any athlete, and they’ll tell you, if you start doubting yourself, you’ve already lost,” Bolt said. “I never started doubting myself. I just tried to put together a race.”

He did.

And so, the final photo taken on the track looked like so many others that Bolt’s taken over the years: The world’s fastest man holding that long, languid bow-and-arrow pose—smiling, playing to the crowd.

What a race.

“I was screaming. I was screaming because I didn’t know what was going to happen,” Bolt’s father, Wellesley, said after a harrowing night in the stands.

“But we know Usain. He’s a very stubborn man and he didn’t give up.”

DAVIS LOVE III (left) becomes the third-oldest winner in Professional Golfers’ Association Tour history, while Tiger Woods’s season came to an abrupt end. AP

There was quite a crowd near the top of the leaderboard for a while. Midway through the afternoon, five players shared the lead at 15 under.

None of them was Woods.

Chasing his first victory since 2013, he opened with six straight pars, including one on the easiest hole on the course—the par-five fifth, which he birdied in each of the first three rounds.

Woods sent his tee shot on the par-3 seventh into the huge gallery that had been waiting for him to reel off some birdies and make his move, then twoputted for his first bogey.

And when he made the turn, he was three strokes behind coleaders Gore and Brown—his playing partner.

“I just wasn’t able to get any kind of roll early,” Woods said. “I had my chances to get it going. I just never did.”

Brown, who had a hole-in-one on the par-3 third, joined Love at 17 under with a birdie on 11—the same hole that pretty much sank Woods.

Woods’s chip-and-run on the 11th ran all the way off the green. He couldn’t keep his ensuing chip on the green and wound up three-putting for triple bogey. Not even three straight birdies on Nos. 13 to 15 could help him recover.

Woods was far from the only player who needed to play well at Sedgefield to advance to next week. Defending champion Camilo Villegas finished at 10 under—good enough to move him from No. 129 to No. 123 and put him in The Barclays. AP

SPORTS

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GLOSSY CABINETS SHINE IN TODAY’S KITCHEN Forgiveness and loving care

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EAR Lord, if we are always in the state of grace, rejoicing in Your forgiveness and care is so easy to attain. With the renewed strength You will give, may we accomplish everything peacefully and faithfully according to Your will. Amen.

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

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

Life

WHY NASA SCIENTISTS ARE EXCITED ABOUT MATT DAMON FILM ‘THE MARTIAN’

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BusinessMirror

Tuesday, August 25, 2015 D1

Glossy cabinets shine in today’s kitchens B B B

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Chicago TYribune

S ultra-contemporary kitchens gain in popularity, interest is soaring in shiny cabinets that contribute a huge modern cachet.

New York-based designer Patrick Mele loves the sheen and reflection that variations on glossy paint, other finishes and lacquer add to a kitchen. He and other designers credit European cabinetmakers for producing some of the smoothest, glass- or mirror-like finishes, rivaling those from automotive manufacturers.

Patty Vila is among American homeowners who like the look. She resurfaced kitchen cabinets in her Miami Beach home by having them spraylacquered white. “They look amazing, and it’s a popular look for others living on the beach. It makes the room look larger, sleeker and cleaner,” Vila says.

Chicago designer Scott Dresner also likes glossy cabinets as a way to add a pop of shine and make a kitchen look more distinct. He has his own private label line fabricated in Italy.

Mele, who likes a choice of hues depending on the colors in the rest of the interior, gives black a big thumbs-up. “It’s like having a tuxedo in your apartment,” he says.

But there’s another trend that’s emerged, which appeals to those who may not want such spare sophistication, reminiscent of the high-tech lab look popular in the late 1970s and 1980s. They favor warming up minimalist glossy cabinets with some matte or wood-grain cabinets and honed countertops, says designer Veronica Van Deusen, owner of Fabulous Interior Designs in Fredericksburg, Virginia. But combining finishes and colors like a pro takes some careful planning.

Van Deusen recommends separating the different surfaces—either above or below countertops, or isolating the glossy cabinet boxes in a certain area such as an island or butler’s pantry as a focal point.

Besides deciding whether to go with a total or partial glossy look, another key decision is which type of gloss to select, which can affect price. Many of the glossiest cabinets reflect a labor-intensive process of rolling or brushing on paint, spray-painting, applying a urethane-type finish or lacquering, often in multiple layers and sometimes with an automobile manufacturerstyle buffing afterward. These choices can end up being as expensive as pricey stainless-steel and custom-painted cabinets, Dresner says.

Because of the time-consuming labor required and regulations regarding VOC off-gassing with oil-based finishes, the work may have to be done off-site, before installation. Even touch-ups may require removing cabinet doors and sending them back to a shop. Same goes when existing cabinet fronts are resurfaced. So, it’s important to ask in advance about the process. But the good news is that the best glossy finishes usually are highly durable and viewed as a “lifetime investment,”

Mele says.

Less-costly versions are available, though not all are exact clones. Vila shopped hard to find an installer to lacquer her cabinets for an affordable fee. Van Deusen has discovered costs sometimes can be trimmed if clients take their cabinets to an auto body shop, skilled in this type of work.

Ikea retails high-gloss cabinets. And many paint manufacturers have semigloss and high-gloss products for DIYers or professional painters.

Benjamin Moore’s Advance line is an innovative product—a waterborne alkyd, a type of paint that produces a look similar to an automotive finish, Brand Manager Joe Dellafave says. “What makes it unique is that it offers a hybrid performance of oil-based paint but dries to a waterborne finish with minimal odor, cleans up easily, has low VOCs and is very durable,” he says. It also can be applied on-site and contains a self-leveling component that eliminates the look of brushstrokes.

Still another option is to use cabinet boxes covered in a laminated paper or plastic material that’s thermoformed to an engineered wood surface. They look glossy and are practical and affordable. Typically, these are also scratchresistant and can be buffed for repairs on-site.

They also clean easily.

Designer Alena Capra from Fort Lauderdale, Florida, likes thermofoil fronts for their cost-effective look and durability when she seeks a shiny look. But before you make a choice, ask yourself the following questions to make a smart investment that works for you: n How important is going green? Many glossy paints are green but not all; lacquers can be either oil- or water-based. Read labels if this is important. n How much will fingerprints show? Some reflective surfaces show them more than others— white more than black. To avoid smudges, install knobs or pulls, and place boxes in a less-trafficked zone or on cabinets that get less use—maybe those high up, Mele suggests. n How do you want to open cabinet doors?

Some designers and homeowners prefer an absolutely spare look and no pulls, which means cabinets have to have another option built in to open them. Those who favor pulls are advised to choose a style that’s sleek and in stainless steel if they want to play up a modern look, Dresner says. n How durable is durable? A glossy finish will make caring for cabinets exposed to grease, moisture and other contaminants easier, according to paint manufacturer Dunn-Edwards.

Generally, the harder the coating, the greater its washability. But lacquer may require extra care to install. Again, read labels just as you do for food products to know what the finish is made of. Scientists at Bayer MaterialsScience, North America, headquartered in Pittsburgh, Pennsylvania, make resins for polyurethane coatings for kitchen cabinets. It sells the resins to paint manufacturers, which use the resins to formulate paint that produces finished highgloss cabinets.

CHICAGO designer Scott Dresner designed a spanking-white kitchen with high-gloss painted cabinets for a unit’s contemporary vibe. JIM TSCHETTER/DRESNER DESIGN

B L S. M

BENJAMIN MOORE’S Antique Jade and Maid of the Mist Advance semigloss paints were used on cabinets for a shine-enhanced finish without the hassle of true lacquer finishes. BENJAMIN MOORE

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ANOTHER example of MasterBrand Cabinets’s high-gloss painted cabinets in striking black reflects sophisticated glamour in a city apartment. MASTERBRAND CABINETS

Using art to spark inspiration

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Excellence is in the details

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S it possible to go back in time? Maybe not, but what’s possible is to relive memories so vividly and clearly—as if you’re experiencing these special moments live all over again.

A young man discovers this as he watches a memory from his wedding day come alive on the LG Super Ultra High-Definition 4K TV. Watch the video online at bit.ly/GreaterDetails.

The Super UHD TV series from LG Philippines (www.LG.com/ph) lets viewers see greater details than ever before, boasting of premium Tru-4K Engine Pro technology that allows image upscaling to near 4K quality, as well as the latest in IPS screen technology for true-to-life vibrant image-viewing pleasure.

With LG’s latest high-definition TV series, the viewing experience will never be the same again.

OME use art to brighten up spaces; others tap into it to make a statement. In the case of Makati Commercial Estate Association (MaCEA), which will soon unveil new murals in the Makati City underpass system, it’s both.

As part of the “Make It Happen, Make It Makati” campaign, the development of the murals were spurred by an overall vision of making the country’s central business district more pedestrian-friendly.

“We wanted to promote the city’s walkability by enhancing the pedestrian experience of Makati,” explains Dave Balangue, president of MaCEA. The underpass murals started in Sedeno and Legazpi last year and they received such overwhelming positive response, it was only a matter of time before the city sought to find more people who supported the idea of highlighting the advantages of pedestrianization for a city as busy as Makati.

The underpass murals will make walking more pleasurable for the 300,000 pedestrians who pass them daily. Moreover, beyond aesthetics, efforts such as this create an opportunity to let people be aware that creating pedestrian-friendly walkways makes a great livable city. Quite simply, people will become more inspired and uplifted as they traverse to work or to the diverse establishments in Makati City.

That said, the addition of four new murals in Makati City hopes to give city-dwellers more reason to jump on their feet, become inspired and explore the beautiful city. Sponsored by companies who share

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THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE

Sports

differences, as well. This time around, Asian economies have stronger current-account balances, fiscal positions and foreignexchange reserves that provide a thicker buffer against turbulence.

Risks are building nonetheless, as China’s surprise yuan policy Uturn on August 11 sends ripples across the globe from Vietnam to Kazakhstan, and threatens v u l nerable emerg i ng- m a rket economies from Brazil to Turkey.

The global sell-off deepened on Monday, with US index futures signaling more losses.

MAKATI Commercial Estate Association (MACEA) board members with the Ayala Land team: (from left) Jimmy Matias, general manager of MaCEA; TTony Puyat; Cathy Bengzon, AAVP of SLMG; Dave Balangue, president of MaCEA; Raul Irlanda, MaCEA gov.; and Shiel Aguilar, project development manager of MaCEA the same thrust as MaCEA, brands such as Nestlé (at the Sedeno underpass), with its colorful take on city life; RCBC (at the Rufino underpass), as it depicts community building through art; Security Bank (at the Paseo de Roxas underpass), which highlights an inspirational vision for the youth; and Shell (at the Salcedo underpass) creating a modern interpretation of its corporate mission, all define a new and more

colorful experience and statement for Makati City.

“One only needs to take a walk across the city to see what a big difference these murals make in terms of experience,” Balangue ends. This project is spearheaded by MaCEA and Ayala Land Inc. under the Make It Happen. Make It Makati campaign to strengthen Makati City’s position as the leading city for business, lifestyle, entertainment and culture.

LIFE

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Second of three parts

ITHOUTan amendment to the mandate of the National Telecommunications Commission (NTC) and the reclassification of the Web access as a basic service, the regulator will only have little power over the Internet market in the Philippines.

But these are just a few of the factors that affect Internet speed and price. Another reason why Internet connection in the Philippines is slower compared to its Association of Southeast Asian Nations (Asean) peers is the lack of investments—both public and private. NTC Director for Regulations Edgardo V. Cabarios said the Philippines is one of the developing countries that still do not have a universal-access fund.

“Under the existing laws, we do not have a so-called universal access. The law only states that we have to give priority to the development of infrastructure in unserved and underserved areas, but it did not specify how,” he said.

So, what happened was, private money was used to develop the needed infrastructure to provide Internet access.

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‘PHL CAN TAKE ADVANTAGE OF GSP+WHILE FTA WITH E.U. PENDS’ B C N. P

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HILIPPINE products have not lost their competitiveness in the European market despite the success of its regional rival Vietnam in forging a free-trade agreement (FTA) with the European Union (EU), the economic bloc’s delegation to Manila said.

Walter Van Hattum, head of the trade and economic section of the EU Delegation here, said the Philippines still has the EU Generalized System of Preference Plus (GSP+) scheme to take advantage of in marketing its products in the 27-member European bloc.

“With the GSP+, the Philippines remains very well-placed regarding the EU market access..although an FTA is, of course, more ambitious and permanent,” Van Hattum said.

Still, he said, the Philippines should take its engagement with the EU to a higher level, by pushing ahead with the proposed Philippines-EU FTA. “[The EU-Vietnam FTA] is a good deal that shows the EU’s commitment to the Association of Southeast Asian Nations (Asean) region, and possibly an inspiration for other countries in the region, such as the Philippines,” Van Hattum added. The GSP+ is a preferential trade scheme extended to the Philippines by the EU that allows over 6,000 product lines from the Philippines to enter the EU duty-free.

The Philippines was accorded this privilege last December, and is the only Asean nation to enjoy this preferential trade treatment.

However, with Vietnam and the EU having reached an agreement“ in principle” for an FTA this month (now pending the European Council and Parliament’s approval), questions on the impact of this development on the Philippines’s competitiveness have arisen.

Ceferino S. Rodolfo, assistant secretary for Industry Development of the Department of Trade and Industry, earlier raised concerns on the Philippines’s position as a trading partner of the EU given Vietnam’s edge in garment exports.

“We have access to the EU market with the EU-GSP+, we have the advantage there. But if they [Vietnam] conclude an FTA with the EU, 90 percent of their products will be at zero duty. Sa S “GSP+,” A

PESO EXCHANGE RATES n US 46.3690

n JAPAN 0.3796 n UK 72.8086 n HK 5.9823 n CHINA 7.2580 n SINGAPORE 32.9255 n AUSTRALIA 34.0348 n EU 52.7308 n SAUDI ARABIA 12.3648 Source: BSP (24 August 2015)

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news@businessmirror.com.ph

Phl’s slow but expensive Internet service continued from A1

It was not enough, however.

Need for a universalaccess fund

“We let the private sector do it. But private investments require return,” Cabarios said. “There goes the problem. Can you bring the price down?

No, because private investments require financial return. Nobody will invest if they will not get something out of their money.”

Private investments over the past 10 years, estimates show, likely reached more than P600 billion. However, these are limited to the networks of the two main telecommunications players in the Philippines.

Over the past decade, Philippine Long Distance Telephone Co. (PLDT) had invested P300 billion in network facilities and support infrastructure alone, company spokesman Ramon R. Isberto said.

Globe Telecom Inc., on the other hand, has been spending an average of P25 billion annually since 2005 to improve its network coverage.

This year the telecommunications company of Manuel V. Pangilinan has earmarked P43 billion to further develop its facilities and content, while the Ayala-led firm has programmed a P39.65-billion capital for this year.

“Average indust r y capit a l

expenditures is at P60 billion per year, but this is not enough. For us to provide a 2-megabits-per-second [Mbps] connection to 80 percent of the households in the Philippines, we have to invest roughly P800 billion on the average,” Cabarios said.

But at the rate of P60 billion per year, it may take more than 10 years before each household could be equipped with such a speed. “ This plan is listed on the Philippine Digital Strategy, that by 2016, we should have a minimum 2-Mbps connection for each household. But the problem is, we do not know how, given the limited resources that we have,” the NTC official lamented.

Hence, private investments are helpful, but government intervention is needed.

“You cannot just let the private sector invest by itself. We have to address the problem in a comprehensive approach,” Cabarios said.

In Thailand, for example, the government has invested $114 million to improve the Internet service or availability. The fund is part of Bangkok’s economic policy.

The Vietnamese government, on the other hand, owns two of the three largest telecommunications companies in Ho Chi Minh City.

Investments mainly come from the government.

Malaysia, he added, has now spent a total of $4.5 billion over a 10-year

period to lay fiber-optic lines to every home in the country’s urban area.

Other developing and developed economies are investing billions of dollars to improve Internet access in their countries, Cabarios added.

“Universal-service funds have been created in developing countries, often in cooperation with the World Bank, as policy tools for liberalizing markets to provide financial assistance to meet regional and rural service targets for both telephony and Internet services, among others,” he said, citing a GSM Association report on access funds.

The problem is, there is no legislation for a universal-access fund in the Philippines.

“We have charges for power, road usage and water, but none in telecommunications. The proposal of the commission is for the fund to come from 1 percent of the total government revenue. We need that to deploy broadband in unserved areas and help small and medium enterprises to compete,” Cabarios said.

Thus, Internet infrastructure and pricing are controlled by the country’s top 2 telcos, Mary Grace Mirandilla-Santos, an independent researcher on information and communications technology (ICT) and telecommunications policies, said.

Absence of public backbone

A fellow of ICT policy and

regulation think tank Learning Initiatives on Reforms for Network Economies (Lirne) Asia, Santos said the country is relying on the infrastructure of PLDT and Globe, both of which are not enough to provide adequate or decent access to all Filipinos.

“We do not have a national backbone. We rely on the private companies for infrastructure. What we need is a carrier-neutral backbone,” she said.

Engr. Rodolfo Noel I. Lozada agreed, comparing the current state of the country’s Internet connection to a network of roads and highways that were built over the long period of agricultural and industrial era.

“Those roads were built primarily by the government for public transport use, allowing unhampered movements of people and goods that led to the progression of the Filipino nation to what it is now,” he said.

The tollways, however, were only built less than a decade ago, riding on the progression of the Philippine economy. The country is now in the cusp of the digital era, where digital products and goods are traded globally. This requires a transport infrastructure to move these digital goods.

“This is where the heart of the current problem lies. The government has not built any major digital highway for public use.

Practically all of the digital roads and highways are privately owned and imposes a ‘toll fee’ per use,” Lozada explained.

“Can you imagine if all the roads and highways are all private toll roads? Traveling from any point to another location will be very expensive and slow,” he added.

In December last year, motorists complained that the normal fivehour drive going up to Baguio City took them 12 hours due to the queue at each toll-road junction connecting three superhighways.

Lozada said if only the government had built the National Broadband Network (NBN), the country could have been spared from the current slow Internet speeds.

“That is similar to how the government had built the public roads and highways during the agricultural and industrial era. It is a must for the government to provide for a big digital highway that allows very fast and free public transport of digital products and goods,” Lozada said.

He added that with a state-owned backbone in place, “private service providers will be limited to providing on a pay-per-use arrangement the last mile connection to the end users and the local loop connection to the NBN.” This design will provide a very fast and low-cost Internet service to the entire nation, to both cities and rural barangays alike, he said.

“It will effectively negate the current worst of the Third World kind of Internet that the country is experiencing right now,” he said.

Lozada is best known for being the whistle-blower of the blotched NBN-ZTE scandal during the Arroyo administration.

Sustainable exchange

This is where the peering between Internet service providers (ISPs) comes in. Essentially, the peering of Internet protocols (IPs) allows the exchange of Internet traffic among data-service providers, making it faster for the transfer of information from one point to another.

To do this, ISPs have to be linked via an Internet exchange, ideally in the Philippine Open Internet Exchange (Phopenix), a governmentoperated Internet-exchange facility.

“Without IP peering, local incountry Internet traffic need to travel out of Philippine borders and be exchanged abroad, transit, before reaching its local destination. Enterprises that are IP peered with Phopenix will have cost savings, as local in-country Internet

traffic exchanged through Phopenix will not count against the use of international network links or backhaul usage,” Democracy.Net. PH, a group that advocates for the Magna Carta for Philippine Internet Freedom, cofounder Pierre Tito Galla explained.

As local in-country Internet traffic will not need to transit abroad, ISPs will exchange with each other to lower latency—that is, better response times—and deliver this lower latency for the enjoyment of consumers.

Lower latency for consumers means a faster, more reliable and more stable Internet-connectivity experience, particularly for e-commerce transactions with businesses, financial institutions and government front-line services.

“IP peering helps the Philippines achieve a more robust, fault- and attack-resistant network infrastructure. As local in-country Internet traffic need not transit abroad, the impact of events such as submarine cable breaks and DDOS attacks initiated by foreign cyberattackers and cybercriminals will be mitigated,” Galla said, referring to the distributed denial-of-service, or DDOS, attack.

A DDOS attack occurs when multiple systems “flood” the bandwidth of a targeted system, resulting in the unavailability of online services.

“This is especially true for government traffic, which may include sensitive national-security data and citizens’ personal information, that can be exchanged locally through the Phopenix,” he said.

Simply put, IP peering allows consumers to enjoy “more robust, fault- and attack-resistant network infrastructure, which is personally important to consumers in their transactions through the Internet, such as tax filing, banking, e-commerce and Skype conversations with family and friends overseas, among the many uses of fast, reliable and inexpensive Internet.”

But there exists a lack of effective and reliable interconnection among ISPs. PLDT and its subsidiaries are not too positive with the mandated IPpeering policy of the government.

For the country’s No.1 telecommunications provider, peering through a single, governmentowned Internet exchange should have a “basic multilateral-peering framework” to trade traffic.

Isberto said his company is now in discussion with the Department of Science and TechnologyAdvanced Science and Technology Institute (DOST-ASTI) to make its open Internet exchange more sustainable.

“Globally, the sustainability of an open-Internet exchange is largely dependent on its members adhering to basic multilateral peering framework leading to a member-governed Internet exchange that allows participants to trade traffic,” he said.

While working to develop such multilateral peering framework, PLDT was able to reach an agreement with DOST-ASTI on the free use of PLDT fiber and collocation facilities for the open-Internet exchange.

“This would allow the DOST to setup and operate a Phopenix node in PLDT’s Vitro Data Center facility. This arrangement will not only facilitate future bilateral peering connectivity engagements between PLDT and Phopenix members, but more important, the multiple node setup will also provide additional resiliency to Phopenix’s network,” Isberto said.

Globe General Legal Counsel Froilan M. Castelo said the proposed peering arrangements should have minimum to no cost at all to the telecommunications players.

“Globe maintains that there should not be any access charge to this to maintain or lower Internet costs. A draft NTC memorandum circular on Internet peering,

circulated for the industry players’ comment in 2011, ‘orders all ISPs in the Philippines to deliver and receive traffic between domestic end-points and without passing the traffic across the international border.’ We have proposed that such delivery and receipt of traffic should also be free of Internetpeering charges,” he said.

He added that the open exchange should be telco-neutral to keep local traffic local and peering charge-free.

“The Internet exchange proposed

by Globe and other ISPs will allow participating networks to be physically interconnected in a single facility, and traffic from one member ISP passing through this Internet exchange will not be billed by the other member ISPs. Also, operating costs shall be equally shared by all participants. We believe this arrangement will level the playing field,” Castelo said.

No brunt for consumers

Galla assured consumers that the peering policy will not have any negative effect to consumers.

“Unlike increasing transit and settlement, consumers need not fear increases in costs that are passed on to them; with IP peering, consumers can expect decreases in costs of bandwidth. Nor should consumers expect increased costs due to additional capital expenditure on the part of telecommunications companies; IP peering with Phopenix does not require heavy capital expenditure,” he said.

With the reduction in the need for transit, consumers can expect lesser latency or “lag.” With the reduced requirement for transit bandwidth, consumers can expect telecommunications firms to use their cost savings to improve their network infrastructure and even perhaps reduce the costs of bandwidth.

IP peering, he added, is likewise beneficial to the ISPs

“As far as telecommunications entities are concerned, the fact that Globe Telecom is peered with Phopenix and is urging its competitor PLDT and its affiliates to do the same, supported by the fact that many other competing telecommunications entities, service providers, government networks and other entities are peered with Phopenix, is a clear signal to the industry that IP peering is good for each enterprise individually and for the ICT sector as a whole,” Galla said.

Localization of content

But given the current situation— wherein there is an apparent lack of effective and reliable interconnection among ISPs—the possible localization of foreign content is being stalled. Having localized foreign content allows for the faster loading of data from web sites.

“One of the inherent problems relating to the Internet is that all the foreign traffic has to run through undersea cables. The way to improve Internet speed in the country is to get foreign content localized,” said Louis Napoleon C. Casambre, undersecretary of DOST. This, according to NTC’s Cabarios, would entail the setting up of caches of content providers in the Phopenix.

Having a cache in an Internet exchange will allow faster loading of data. Google, for one, has deployed a cache here in Manila, hence, it loads faster compared to other web sites.

“The fact that deploying a cache here in the Philippines is not easily done implies that the cost is quite high. Their considerations are the average Internet traffic in the Philippines, revenues from advertising, among others,” Cabarios said.

Isberto said around 90 percent of the content being accessed in the Philippines is foreign. To be continued

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The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Tuesday, August 25, 2015 A3

LTO opens 25 licensing sites to wipe out 900,000 backlog

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By Lorenz S. Marasigan

he Land Transportation Office (LTO) activated 25 licensing sites around the Philippines on Monday to help complete the processing of more than 900,000 driver’s licenses by October.

ROAD CLOSED

Kennon Road, one of the main access roads to Baguio City, remains closed to traffic due to a landslide in Sitio Wabac in Barangay Camp 7. The Department of Public Works and Highways advised motorists to take alternate roads to Baguio, including the Marcos Highway and Naguilian Road. Mau Victa

The 25 licensing offices tapped to expunge the license backlog are in Metro Manila and Regions 3, 4A and 8, said LTO chief Alfonso Tan Jr. “We will print licenses on Saturdays and after office hours on weekdays, in order to erase the current

backlog of around 900,000 licenses

by October this year,” he said.

These new license cards sport a color-coded design: orange cards will be issued to student drivers, yellow cards to conductors, and the current blue card to both professional and nonprofessional drivers.

T he Department of Transportation and Communications recently awarded the LTO License Cards Supply Project to A llcard Plastics to the tune of P336.87 million.

Allcard is responsible for the delivery of 5 million pieces of license cards over a 12-month period, which is expected to cover demand for the next three years.

“Our effort to break a 30-year monopoly in driver’s license cards supply is finally about to bear fruit.

It is unfortunate that we had to resort to temporary licenses for several months, but good governance principles demanded an open, fair and transparent bidding. We will now work double time to normalize this service,” Transportation Secretary Joseph Emilio A. Abaya said.

Port operator plans to haul Court of Appeals justice to Supreme Court

T

he operator of the Harbour Centre Port Terminal in Manila plans to haul an associate justice of the Court of Appeals (CA) to the Supreme Court (SC) if he continues to refuse to inhibit himself in the case involving the company and businessman Reghis Romero II. “The High Court is our last resort,” said Cyrus Paul Valenzuela, president of One Source Port Services, who has filed an urgent motion with the Fifteenth Division of the CA on August 13, asking Associate Justice Noel Tijam to inhibit in the case pending under his division because of his close ties with Romero.

Valenzuela cited the CA justice’s inability to have a fair and objective decision. “If he has delicadeza, Tijam would not try the case lest he be accused again of favoring Romero,” he said.

According to Valenzuela, Tijam is no stranger to controversies.

Five years ago the magistrate was being groomed to become a member of the SC.

The position vacated by thenJustice Renato Corona, who was appointed as chief justice with the retirement of Reynato S. Puno, was open and Tijam was nominated before the Judicial and Bar Council.

However, Tijam’s chances were scuttled because of a case involving Romero in the failed Smokey Mountain Development and Reclamation Project (SMRDP).

In June 2010 the Group Against Plunder, led by Allan Ramos Pojas, charged that Tijam was not fit to be a nominee because he failed to practice fairness when he ignored the Deed of Assignment/Conveyance of the Asset Pool of the SMRDP that should have been under the supervision of the Home Guaranty Corp. (HGC).

The evidence notwithstanding, the group said, Tijam still decided in favor of Romero.

In a 2010 decision penned by Tijam under his 15th Division, the CA ruled in favor of Romero in a

case involving the SMRDP despite glaring legal flaws.

HGC was seeking to dismiss Romero’s case before the Manila Regional Trial Court (RTC) Branch 22 because his firm, R-II Builders, failed to pay the required docket fees. The court, however, ruled in favor of the R-II Builders owner.

From there, the HGC ran to the CA, but Tijam dismissed the appeal in favor of Romero.

In his motion, Valenzuela underscored the friendship between Tijam and Romero based on the favorable decision that the latter’s company, R-II Builders, got from the associate justice’s CA Division in January 2010, a decision which was reversed by the SC because of numerous errors.

Valenzuela said that when HGC filed a motion with the SC, the high Court reversed the CA’s decision in 2011, and ruled that the CA’s “proceedings below was error upon error” and that it “gravely erred,” saying that the RTC Branch 22 did

Sarangani lady exec gets 18 yrs jail term for filching P20,000

4 Mers-CoV positive OFWs confined in Saudi hospital

FTER allowing Sen. Juan Ponce Enrile, who is accused of plunder, to post bail out of compassion, the Supreme Court showed no mercy in the case of a lady Sarangani official when it imposed a maximum of 18 years imprisonment for her for malversation of public funds amounting to P20,000.

In a 13-page decision penned by Associate Justice Arturo Brion, the SC’s Second Division denied the petition filed by Amelia Carmela Constantino-Zoleta, executive assistant of the Sarangani vice governor, seeking the reversal of a November 5, 2008 ruling issued by the Sandiganbayan.

In said decision, the anti-graft court found her guilty of malversation of public funds by falsification of public documents, defined and penalized under Article 217 in relation to Article 71 (2) and Article 48 of the Revised Penal Code.

Zoleta, the daughter of the late Sarangani Vice Gov. Felipe Katu Constantino, and private individual Violita Bahilidad, were earlier sentenced to a maximum of 16 years’ imprisonment for conspiring to dupe the provincial government.

Zoleta was also perpetually disqualified from holding any public office.

The Sandiganbayan held that the vice governor conspired with her daughter and the other accused in using a dummy organization, Women in Progress, headed by the petitioner, to facilitate the malversation of P20,000.

Aside from Zoleta and Bahilidad, others accused in the case were provincial accountant Maria Camanay and provincial board member Teodorico Diaz.

The case against the vice governor was dismissed after he died in a vehicular accident, while Camanay and Diaz remained at large.

Bahilidad was earlier acquitted by the SC in a separate petition questioning her conviction.

“The connivance between the accused is made more glaring by the fact that the entire transaction—from the letter-request, to the approval of the disbursement voucher, until the processing and release of the check was completed in only one day,” the Court pointed out.

It also noted that the disbursement had been approved even without the required supporting documents, such as the Articles of Cooperation and Certificate from the Cooperative Development Authority.

The SC also denied the claim of petitioner that she was denied due process when the Sandiganbayan convicted her of malversation through consent, abandonment, or negligence because this allegation was not contained in the information.

“All that is necessary for conviction is sufficient proof that the accountable officer had received public funds, that he did not have them in his possession when demand therefor was made, and that he could not satisfactorily explain his failure to do so,” the Court explained.

“Direct evidence of personal misappropriation by the accused is hardly necessary as long as the accused cannot explain satisfactorily the shortage in his accounts,” it added.

However,the SC modified the Sandiganbayan ruling when it increased the maximum term of the penalty imposed on the petitioner from 16 years, five months and 11 days to 18 years, two months and 21 days.

Concurring with the ruling were Associate Justices Antonio Carpio, Jose Catral Mendoza, Estela Perlas-Bernabe and Marvic Leonen. Joel R. San Juan

By Recto Mercene

A

F

our Filipinos working in Saudi Arabia were reported to have contracted the Middle East respiratory syndrome coronavirus (Mers-CoV) and are now confined in a Riyadh hospital to receive the best possible health care.

“Our embassy in Riyadh was assured by the hospital management that the patients are being given the best possible care, and the hospital is equipped to deal with MersCoV cases,” said Foreign Affairs Department Spokesman Charles Jose in a media briefing.

T hose infected were descr ibed as “three females and one male who is 55 years old.” The females are aged 29, 32 and 50, respectively.

Mers-CoV is a viral respiratory illness, first reported in Saudi Arabia in 2012 and has since spread to South Korea. The virus’s source is unknown, although experts said it was likely to have originated from an animal.

At the moment, there is no vaccine against the disease.

Jose said two of the patients are in the intensive care unit, one in isolation and the last one was reported not showing the symptoms, but is under observation.

The 29-and 32-year-old patients, however, were found positive of the virus.

“The embassy is making sure that they get the proper treatment. And we reiterate our previous advisories for Filipinos in Saudi Arabia to take precaution, and follow the advisories of local authorities,” Jose said.

Filipino health workers in Saudi hospitals were also advised to follow preventive protocols, while those exhibiting symptoms were advised to report immediately to the nearest hospital for diagnosis and treatment.

not have jurisdiction over the case because R-II Builders failed to pay the docket fees.

Tijam’s controversial decision drew fire and sparked public protests. Ultimately, the controversial decision backfired against Tijam when it was included as part of the evidence against Tijam, showing he is not fit to be nominated to the SC. The Kapisanan Kontra Korap

published an open letter to President Aquino in a newspaper about the HGC case and cited the CA Fifteenth Division’s bias in favor of Romero, asking the President to investigate R-II Builders’ Smokey Mountain project.

In his motion, Valenzuela said: “Given the controversial 2010 decision favoring Reghis, it should have been prudent for Justice Tijam to recuse himself at the onset—yet he

has not done so.”

“One source now unequivocally declares that it has no faith and trust in the ability of Tijam to render an objective and fair decision or opinion in the instant case,” he said.

He added that Tijam’s “insistence on being involved in resolving this case despite the instant motion would just emphasize even more the private respondent’s suspicion of bias and partiality.”

Economy

A4 Tuesday, August 25, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

news@businessmirror.com.ph

Group, lawmaker question DAR’s ₧10.13-B budget, ₧1.5-B allocation for tourism dept

W

ith the absence of an agrarian-reform law following the expiration of the Comprehensive Agrarian Reform Program (CARP) in June last year, the Kilusang Magbubukid ng Pilipinas (KMP) expressed fear that the P10.13billion budget allocation for the Department of Agrarian Reform (DAR) will serve as campaign kitty of the Liberal Party (LP) in the 2016 elections.

This developed as Party-list Rep. Terry Ridon of Kabataan also questioned the P1.15 billion in the proposed budget of the Department of Tourism (DOT) for “local projects” that do not have any detail and suspects the money may just also be used for the elections.

This huge stash of cash will be allocated, which may end up being used for projects that will be inaugu-

rated by Interior Secretary Manuel A. Roxas II, the designated LP presidential candidate for the May 2016 elections, Ridon said.

KMP Chairman Rafael Mariano noted that 2016 is an election year and the government resources, such as the DAR’s budget next year, may be used to boost the candidacy of LP members or, worse, commit electoral fraud to ensure victory.

Describing the DAR’s 2016 budget as “premeditated savings” and “LP campaign kitty,” Mariano added that the bulk of the DAR’s budget, such as lump-sum funds, were prepositioned to “LP-friendly downloading stations, administration bailiwicks and vote-rich territories.”

“Without a land-reform law, the P4.5-billion allocation for land acquisition and distribution of the DAR is obviously a lump-sum allocation highly vulnerable to corruption,” he said in a news statement.

He added that with the new definition of savings, chances are the DAR budget will be another deep source of the ruling party “designed to suit their fiscal and electoral agenda next year.”

According to Mariano, CARP expired on June 30 last year, preventing the DAR to cover lands under the land acquisition and distribution component of the program.

Ridon argued that the funds for these “locally funded” projects are part of the P648 billion in lump sums that may be spent according to the wishes of Malacañang and its

“daang matuwid” drumbeaters.

Ridon and the seven-member Makabayan Bloc at the House of Representatives have consistently questioned the practice of Budget Secretary Florencio B. Abad of pushing the so-called budget transparency, only to create layers of codes and unspecified expenditures that end up with LP politicians, from senators to congressmen.

The lawmaker also questioned why the DOT has been getting “ bottom-up budgeting” (BuB) projects and even allotted P196.6 million for them since this BuB was the handiwork of non-governmental organizations that are now within the LP circuit. BuB is overseen by the Department of the Interior and Local Government (DILG) under Roxas, Ridon said, and it boggles the mind why the DOT should have a share of such projects in its proposed P4.59billion budget for next year.

“We can say that this is part of the LP’s large pork barrel for Roxas’s candidacy,” Ridon said.

Apart from meddling with locally funded projects, the DOT

would get entangled with the BuB mechanism that is “highly vulnerable to corruption” and containing a provision similar to that contrived for the Disbursement Acceleration Program, which enables local government officials to cancel and replace projects already indicated in the annual General Appropriations Act (GAA).

There is a total of P24.7 billion allotted in the 2016 budget for BuB projects that has been disaggregated in 14 implementing agencies, including the DOT. Ridon also took issue with the ultra-optimistic target of the DOT to have 10 million tourist arrivals next year, arguing that poor infrastructure, including the impossibly slow Internet and other telecommunications services and the “disastrous transportation system” overseen by Transportation Secretary and LP President Joseph Emilio A. Abaya are some of the reasons why the goal of Tourism Secretary Ramon R. Jimenez Jr. will not be met.

Jonathan L. Mayuga and Marvyn Benaning

DOE’s Monsada expects passage of LPG consumer protection bill by next year

By Lenie Lectura

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he Department of Energy (DOE) is hopeful that a proposed bill that protects consumers from substandard liquefied petroleum gas (LPG) products will be enacted into law within the first semester of next year.

“For the longest time, we have been working on an LPG bill that protects consumers in terms of quality and safety of energy products. We have seen how consumers suffer from illegally refilled or dilapidated tanks and, through the bill, we hope that we will avoid such incidents from happening,” said DOE Officer in Charge Zenaida Y. Monsada, who led the two-day LPG Philippines forum, said in her opening speech.

The LPG Industry Regulation and Safety Act has been pending for many years now. “We hope it will be enacted into law prior to national elections next year,” Monsada added.

When asked of the status of the proposed bill, the DOE official said, “It’s still pending with the lawmakers. It looks like the bill is already okay with the House of Representatives. But with the Senate, it is still with the committee, I think.”

Monsada believes that the LPG bill, once enacted into law, will strengthen the LPG industry “since we believe that natural gas will be the fuel of the future, and is part of our energy plan for a sustainable energy sector. We are now seeing LPG in different sectors in the country, in transportation and power, to name a few,” she said.

While waiting for the proposed bill to be approved, the DOE has issued circulars to guide industry stakeholders and consumers on LPG safety standards. Alongside the DOE circulars, the agency is also continuously conducting information and education campaigns in different areas in the country to educate consumers, especially in the household level, about how to safely and efficiently use LPG. “We are also constantly reminding the public to avoid buying so-called LPG antileak devices allegedly endorsed by the DOE,” Monsada said.

As of the first half of the year, DOE data showed that in the LPG industry, there are two LPG refiners; seven importers; 111 refillers; 145 brand owners; 2,000 dealers; and 15,000 retail outlets. Petron Corp. still leads the LPG market at 38 percent.

Investments in the LPG sector have reached a total of P48.07 billion as of end-June this year. The biggest chunk of the LPG investment goes to liquid-fuel bulk marketing at P15.68 billion; fuel retail marketing, P14.18 billion; LPG bulk marketing, P8.65 billion; P6.96 billion for those engaged in LPG terminal business; and P2.61 billon for LPG bunkering.

The LPG bill requires every LPG installation, including centralized underground pipelines, to obtain and renew annually a highly improved standard compliance certificate to be issued by the DOE. Further, the measure, likewise, regulates the manufacture, requalification, exchange, swapping or improvement of LPG cylinders and provides adequate strategies to guarantee that every tank coming out of a refilling plant has gone through security checks.

Party-list Rep. Arnel Ty of LPGMA said there are going to be those unscrupulous companies and individuals who will do everything they can to skirt the law to increase their profits.

“But, at least, the government is taking proactive steps to stop this potential life-threatening practice of selling bad products to the public.”

The most common causes of LPG-induced fires in homes and establishments are defective hoses, incorrect installation of the pressure regulators and cylinder valves that were left open.

Free haircut service A young girl and an old man (left) are among the beneficiaries of a free haircut service during the “Libreng Serbisyo sa Barangay Program” that highlighted the start of the celebration of the 21st anniversary of the Technical Education and Skills Development Authority on Monday at the Bagong Lipunan covered court in Barangay Western Bicutan, Taguig City. PNA

JFC pushes Congress to back creation of proposed DICT

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he Joint Foreign Chambers of the Philippines (JFC) has urged the House of Representatives to back the creation of a Department of Information and Communications Technology (DICT) that will support the country’s position as an investment destination, as well as to promote efficiency in government services.

In a letter to House Speaker Feliciano Belmonte Jr., the coalition of foreign business groups said a stand-alone office for ICT will drive modernization of business processes in the country.

The JFC noted that about 80 percent of countries globally have dedicated an independent office for ICT. The business group also cited benefits of creating a DICT, including e-governance, data protection, cybersecurity and efficiency and reduction of cost for the government.

“In this context, we urge the House of Representatives to pass the corresponding measure of the DICT bill already approved by the Senate, with the objective to ratify the bill before the end of the 16th Congress. The establishment of a DICT will ensure that the Philippine business environment can enjoy the benefits of one more landmark bill before the end of the current administration,” JFC said.

“In addition to our full support for the establishment of a DICT, we would like to reiterate that the foreign-business community in the Philippines is wholly committed to actively supporting the implementation of a future DICT law, to ensure that the creation of a DICT translates into overarching benefits for the competitiveness of the Philippine economy at a regional and global level,” it added.

The JFC is composed of local arms of overseas business chambers of America, Australia-New Zealand, Canada, Europe, Japan, Korea, as well as the Philippine Association of Multinational Companies Regional Headquarters.

The JFC represents 3,000 member-companies trading more than $230 billion with the Philippines and investing some $30 billion in the local market. PNA

briefs cheaper gas, diesel at the pump Oil firms are implementing another round of price rollback in petroleum products to reflect movements in international oil prices.

Eastern Petroleum Corp. reduced the price of gasoline by P1.15 per liter and P0.45 per liter for diesel effective 6 p.m. on Monday “World oil prices have continued to fall in the midst of oversupply of petroleum products and the sluggish demand in Asia particularly in China.

Analysts believe that oil prices are not seen to recover soon as output continues to increase, while global oil demand remains low,” said Fernando L. Martinez, Eastern Petroleum chairman and chief executive.

Pilipinas Shell Petroleum Corp., Seaoil Philippines and Petron Corporation said separately on Monday that they will implement their price rollback of P1.10 per liter for gasoline; P0.25 per liter for kerosene; and P0.40 per liter for diesel at 12:01 a.m. on Tuesday Phoenix Petroleum Philippines and Total Philippines carried similar reductions, but implemented rollback starting 6 a.m. on Monday.

This week’s adjustment follows last week’s downward adjustment in gasoline by P0.25 per liter for most oil firms and an upward adjustment in kerosene and diesel by P0.20 per liter and P0.35 per liter, respectively.

For gasoline, this is the fourth price rollback this month and the 10th consecutive weekly price rollback.

Department of Energy (DOE) Officer in Charge Zenaida Monsada said the latest price rollback is mainly a result of a glut in supply. “There is still more supply than demand,” she said when sought for comment.

The DOE official meant that the oversupply situation and downward trend in world oil prices continue to pressure local pump prices to go down further.

The agency said that Dubai crude continued to fall. Overall, Dubai crude decreased week-on-week by almost $50 per barrel. Lenie Lectura

new voluntary sss retirement fund attracts p1-m savings from 100+ enrollees Even with the nationwide roll-out still a few weeks away, the Social Security System’s (SSS) new retirement savings program for local workers has already drawn over 100 enrollees, with total investments now past the P1-million mark since its limited launch in 10 SSS branches in Metro Manila last May. In a news statement, Agnes San Jose, SSS vice president for Benefits Administration,

said a total of 163 members to date have invested P1.4 million in the SSS Personal Equity and Savings Option (PESO) Fund, a voluntary provident program enabling local workers to save for retirement in a tax-free facility with guaranteed earnings.

“Since regular SSS contributions only cover a maximum income of P16,000, members with the capacity to save more now have an additional option to augment their retirement savings through the SSS PESO Fund program,” San Jose explained.

She described SSS Peso Fund as a risk-free investment that offers better returns as compared with bank deposits.

Among the SSS branches that began accepting PESO Fund applications on May 5 were SSS Diliman, Cubao, San Francisco del Monte, Pasig-Shaw, Mandaluyong, Taguig, MakatiGil Puyat, Alabang, Legarda and Pasay-Roxas Boulevard.

San Jose said that all SSS branches nationwide are set to implement the program by the end of September 2015, coinciding with the anniversary month of the SSS. PNA

house bill seeks ban of reservation fees for real-estate, condo units

A bill in the House of Representatives seeks to protect the welfare of consumers from unfair business practices of real-estate companies.

Under the House Bill 5964 filed by Rep. Scott Davies S. Lanete of the Fifth District of Masbate consumers will no longer have to pay reservation fees prior to the submission of documentary requirements for their purchase of real-estate properties and condominium units.

The bill seeks to amend Presidential Decree 957, or The Subdivision and Condominium Buyers’ Protective Decree, which regulates the sale of subdivision lots and condominiums.

Lanete said the usual practice of developers is to require a prospective buyer to pay a reservation fee for the said properties.

“They require such prospective buyer to submit numerous documents and subject them to various background checks,” Lanete said.

Eventually, the failure of a prospective buyer to submit these requirements automatically leads to forfeiture of the reservation fee.

“In the end, once a prospective buyer fails to abide by the process, they lose their hardearned money through no fault of their own,” Lanete said.

Under the bill, the buyer shall pay no reservation fee or down payment until all the documentary requirements are processed and accepted by the developer as valid and complete. PNA

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GWPI posted 8th consecutive negative growth in June–PSA

By Cai U. Ordinario

G

eneral wholesale prices of major commodities in the Philippines posted negative growth for the eighth consecutive month in June 2015.

Philippine Statistics Authority (PSA) data showed that the General Wholesale Price Index (GWPI) posted a contraction of 3.7 percent in June 2015.

The GWPI has been on the decline since November 2014, at a contraction of 0.4 percent but peaked in Januar y 2015, when the GWPI posted a negative growth of 6.4 percent.

“The downward trend was attributed to the drops in the annual rates of crude materials, inedible except fuels index at -3.8 percent and in mineral fuels, lubricants and related materials index, -26 percent,” the PSA explained.

Apart from these commodities, the PSA said the machinery and equipment index also slowed to 1.8 percent during the month.

However, the GWPI is moving toward a positive growth trajectory on the back of higher increases in the food index at 4.5 percent and the chemicals, including animal and vegetable oils and fats index, 2.9 percent.

There were also increases in the growth of the GWPI of manufactured goods classified chiefly by materials at 2.5 percent and

the miscellaneous manufactured articles index, 2.1 percent.

By region, PSA data showed that the largest drop in GWPI was in Luzon with a negative growth of 4.2 percent in June.

In the past eight months Luzon also posted the highest declines in GWPI compared to the Visayas and Mindanao.

Luzon posted a decline of 0.8 percent in October 2014, and the lowest was also in January 2015, at a contraction of 7.2 percent.

Data showed that the GWPI in the Visayas and Mindanao posted contractions of 1 percent and 2.1 percent in June 2015, respectively.

The GWPI in the Visayas posted the largest decline in February 2015, at a contraction of 2.4 percent, while the lowest in Mindanao was in January and March, when the GWPI posted a negative growth of 3 percent.

The GWPI is a vital guide in economic analysis and policy formulation, and is used as basis for price adjustments in business contracts and projects. It also intended to serve as an additional source of information for comparison in the international front.

Specifically, wholesale price statistics are used as a deflator to express value series in real terms, which is measuring the change in actual volume of transaction by removing the effects of price changes; and a basis for forecasting business and economic conditions.

Sarangani coal-fired power plant expected to start commercial operations by October–Alsons

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ENERAL SANTOS CITY— Energy firm Alsons Power Group is targeting to start by October the commercial streaming of the initial phase of its 210-megawatt (MW) coal-fired power plant in Maasim town in Sarangani province.

Joel Aton, quality assurance manager of Alsons Power’s subsidiary Sarangani Energy Corp. (SEC), said on Monday they are currently finalizing the arrangements for the commissioning and operationalization of the 105-MW component of the P13-billion power-plant project.

He said that the power supplies that will be generated by the plant will be added to the capacity of the South Cotabato II Electric Cooperative (Socoteco II) and several other distribution utilities in Mindanao.

Socoteco II, which serves this city and parts of Sarangani and South Cotabato provinces, had forged a power sales agreement with SEC for the provision of 70 MW of power from the coal plant, which is based in Barangay Kamanga in Maasim town.

“We’re on track right now in terms of the October target for our commercial operations,” he said in an interview.

Aton said the construction of the plant's remaining 105-MW component or second phase is currently ongoing and is due for completion by the end of 2016.

With the operationalization of the plant, he said they expect the power supplies in the Mindanao grid to further stabilize.

As of Monday, the National Grid Corp. of the Philippines placed the island’s system capacity at 1,486 MW and peak demand at 1,401 MW, or a reserve of 85 MW.

JPE reports back to work at Senate

S

However, the Mindanao grid’s power situation is still considered volatile as seen during the maintenance shutdown implemented last month by several power plants that triggered long rotational brownouts in parts of the area.

Citing their projections, Aton said the plant’s total capacity will be more than enough to stabilize the island’s power reserve and address the requirements of some areas.

“The long brownouts will no longer be a problem once the plant will fully operate by the end of 2016,” he said.

Aton said the plant’s first phase will specifically serve around 3.4 million power consumers in the provinces of Sarangani, Compostela Valley, Agusan del Norte, Agusan del Sur and Davao del Norte as well as the cities of General Santos, Island Garden City of Samal and Tagum.

He said an additional of 3.8 million power users in the provinces of Zamboanga del Norte, South Cotabato and North Cotabato will be served with the streaming of the second component by the end of 2016.

Overall, Aton said the coal-fired power plant in Maasim, which is being built by South Korea’s Daelim Industrial, Ltd., is already 90 percent complete.

He said it features state-of-theart technologies like circulating fluidized bed boilers and steam turbine generators made by Fuji Electric Co. of Japan.

The power plant, which will cost around $570 million once fully completed, is considered as the biggest investment venture or project that entered the region in the last three years. PNA

enate Minority Leader Juan Ponce Enrile on Monday reported back to work, five days after he posted P1.45-million bail for the plunder and graft charges filed against him in connection with the alleged P10-billion Priority Development Assistance Fund scam.

Accompanied by his daughter Katrina,

Tuesday, August 25, 2015 A5

DOJ defends BOC’s power to check ‘balikbayan’ boxes

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By Joel R. San Juan

USTICE Secretary Leila de Lima defended on Monday the Bureau of Customs (BOC) on its efforts to rigidly inspect balikbayan boxes coming into the country on suspicion that these are being used to smuggle goods and other prohibited items.

“As the guardians of the country’s trading gates, the BOC has the power to inspect and apprehend contraband or illegal and prohibited goods upon their entry in the Philippine ports. Thus, the discretion largely rests upon them and the DOF [Department of Finance] under Secretary Purisima,” de Lima said in a text message to reporters.

However, the justice secretary advised the BOC to be circumspect in its move to subject the balikbayan boxes to more intensive inspection so as not to antagonize the Filipinos working abroad and their families who have been used to the minimal scrutiny of their packages.

“It must point out to a change in circumstance that now demands a change in the policy, otherwise the same may appear arbitrary in light of the accustomed minimal inspection the OFWs [overseas Filipino workers] have already been used to,” de Lima said.

She also said the BOC may try other methods, such as merely subjecting random or suspect packages to x-ray, instead of opening each and every box. “But insofar as the law is concerned, they are authorized under the Customs Code to conduct such inspections. It’s just a matter of not making inconvenient to both the sender and recipient of the balikbayan box,” de Lima added.

The BOC over the weekend said stricter compliance to the law is necessary because the provisions on consolidated shipments have been abused.

Customs Commissioner Alberto D. Lina on Sunday assured OFWs that the agency has no plans of increasing taxes on balikbayan boxes.

“We are not after the OFWs or their pasalubong to families. We are after the smugglers who have resorted to using the balikbayan boxes and consolidated shipments to smuggle contraband in the country through fake consignees or insertion of smuggled boxes or goods otherwise known as riders, in consolidated shipments,” he explained.

Lina insisted that stricter compliance to the law covering balikbayan boxes is necessary because the rules on consolidated shipments have been abused.

The BOC estimates that an average of 1,000 containers of balikbayan boxes (400 boxes per container) arrive each month in Philippine ports.

It has estimated that the government has been losing P50 million a month or P600 million a year.

‘Safeguards’

Facing mounting furor over the government’s insistence on opening tax-free balikbayan boxes to check for smuggled items, President Aquino summoned Finance Secretary Cesar V. Purisima and Lina on Monday to ensure “safeguards” are installed to prevent abuse amid complaints of pilferage when the boxes sent by relatives abroad are opened for inspection.

“Pipilitin nating ilagay lahat ng safeguards para walang abuso,” Mr. Aquino told reporters in Cebu hours

before his meeting with Purisima and Lina later in the day. “Pero palagay ko naman wala naman sigurong magmumungkahi na huwag na nating tingnan dahil trabaho ng Customs iyon na pangalagaan ’yung inaangkat dito sa ating bansa,” the President added.

He explained that the primary purpose of Customs in opening balikbayan is related to stepped-up efforts to crack down on illegal drugs and other smuggled items.

Higher tax exemption

Sen. Juan Edgardo M. Angara, chairman of the Ways and Means Committee, has proposed to give higher tax exemption on the amount of goods and items from OFWs. Angara said he is in the process of giving priority to the Customs Modernization and Tariff Act (CMTA), which aims to introduce reforms to the BOC to increase the ceiling of tax and duty-free items and goods sent by OFWs, from the present P10,000 to P150,000.

‘Callous, insensitive’

Angered by what he called as a “callous and insensitive” act by the Customs to pry into the boxes of goodies and presents sent by overseas workers to their families, Davao City Mayor Rodrigo Duterte has asked government to stop treating the overseas foreign workers like milking cows.

“Those balikbayan boxes are sacred. They are an expression of love and affection. Nobody should be allowed to make a mockery of this sentimental bond between a foreign worker and his family back home,” Duterte said.

Duterte added that every box of goodies that a foreign worker sends to his wife and children is a result of months of savings.

“Alam ba ng mga taga Customs na pati ang pag-arrange ng mga pasalubong ay may emotional meaning?” he asked. Duterte said the tariff-free balikbayan boxes is a tradition started during the time of former President Marcos, a tradition which has been respected by all other Presidents.

With Butch Fernandez and Recto Mercene

briefs apec eyes ftaap in cebu meetings

THE Asia-Pacific Economic Cooperation (Apec) economies will be moving forward on a collective strategic study aimed to establish the Free Trade Area in Asia Pacific (FTAAP) during the Apec meetings to be held in Cebu in the next two weeks.

An Apec news statement said that the regional economic integration will be at the top of the agenda in the series of Apec meetings to be held in Cebu from August 22 to September 6 as the integration is seen as a possible stepping stone for establishing the FTAAP. The terms of reference for the collective strategic study were endorsed by the Ministers Responsible for Trade last May, and officials will be moving forward with the drafting of the collective strategic study on issues related to the realization of a FTAAP study, led by China and the United States.

Apec economies see the FTAAP has having a big potential to boost economic growth in the Asia-Pacific region, as it could dwarf all other economic arrangements ever made given its size and scope. Catherine N. Pillas

indigent mimaropa elderly receive pension

About 36,502 indigent elderly are receiving monthly cash grants in Mimaropa, according to the Department of Social Welfare and Development (DSWD) Social Pension (SocPen) Program.

A recent SocPen region-wide Project Implementation Review (PIR) showed that the DSWD Mimaropa has disbursed more than P22.1 million to 14,749 beneficiaries for the first and second quarter of 2015. Pay-outs of cash grants to senior citizens are ongoing for the said two quarters.

SocPen is a social protection program of the DSWD that provides P500 monthly cash grant to indigent elderly aged 60 and above stipulated in the Republic Act 9994, or the Expanded Senior Citizens Act of 2010.

Beneficiaries of SocPen are determined by the DSWD, in coordination with the local government units, local Office of Senior Citizens Affairs and Federation of Senior Citizens Association of the Philippines. The DSWD prioritizes indigent, frail, sickly or with disability, and without pension or permanent source of income senior citizens.

To date, Oriental Mindoro has 11,759 social pensioners, Palawan with 10,333, Romblon with 5,992, Occidental Mindoro with 5,444 and Marinduque with 2,974. PNA

prebid opening for p.a.f.’s sf 260fh engine assembly project slated

Back to work

Office workers at the Makati Central Business District rush back to their offices to report to work amid copious habagat morning rains stirred by Typhoon Ineng following a long weekend. NONIE REYES the 91-year-old lawmaker arrived at 2 p.m. and proceeded straight to his Senate Minority Office at the sixth floor of the Senate building. ”I’m not excited. I’m just going to work. It is my duty to come here and earn my pay,” Enrile told the media before he entered the plenary hall for

the 3 p.m. regular session.

When asked if he is ready to join the plenary debates on major bills particularly the Bangsamoro basic law (BBL) and the proposed 2016 national budget, Enrile responded: “I will see.”

Enrile did not participate in the first day

of the BBL debates but he stood up to register abstention votes when Senate approved on third reading House Bill 4660 providing 30 days judicial leave privileges each year to all judges and Senate Bill 2898 expanding the coverage of incentives granted to national athletes, coaches and trainers. PNA

Prebid conference for the Philippine Air Force's (PAF) SIAI-Marchetti SF260FH engine assembly project is scheduled on Wednesday.

It will be held at 9 a.m. at the PAF Procurement Center Conference Room in Villamor Air Base, Pasay City.

Meanwhile, the bid opening is on September 10, 9 a.m., at the same venue.

The PAF is allocating the sum of P4,250,000 for the acquisition of an engine assy (assembly) for one of its SIAI-Marchetti SF-260FH aircraft.

The latter refers to the assembly housing the plane’s engine or powerplant. The SIAI-Marchetti SF.260 (now Alenia Aermacchi SF-260) is an Italian light aircraft marketed as an aerobatics and military trainer.

It was designed by Stelio Frati, originally for Aviamilano, which flew the first prototype (then designated F260) on July 15, 1964.

Actual production was undertaken when SIAI Marchetti purchased the design and continued with this firm until the company was bought by Aermacchi in 1997.

The military versions are popular with smaller air forces, which can also arm it for use in the close-support role. PNA

A6 Tuesday, August 25, 2015

Opinion BusinessMirror

editorial

It’s a ‘Mexican’ mango, not ‘Manila’

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he global stock markets are in a meltdown. As if that’s not bad news enough, the government jumps from one controversy to another. First was that heavy traffic which is not life-threatening.

Now the Bureau of Customs is seemingly more interested in balikbayan boxes than smuggling by the container load.

Then we have some politicians who may be using public funds to employ political donors and household drivers as “consultants,” according to the Commission on Audit.

Maybe it is time to take a break to examine an issue that is less serious.

The BusinessMirror reported that “The Philippines and Mexico have signed a new and expanded intellectual-property (IP) cooperation agreement that aims to boost trade and transfer of innovation between the two countries. The two IP offices agreed to cooperate to ensure the proper administration, protection, use and enforcement of industrial property rights, such as invention patents, utility models, industrial designs, trademarks and geographical indications.”

Note the last two words in that paragraph—“geographical indications.” That takes us back all the way to 2005, when then Executive Secretary Eduardo Ermita said the departments of Trade and Industry, Agriculture and of Foreign Affairs would be taking appropriate steps to defend the local mango from being sidelined in the exports market. This was in reaction to Mexico using the term “Manila mango” to describe its fruit exports to the US. At that time, then-Senator and Chairman of the Senate committee on agriculture Ramon Magsaysay said the Mexican label is misleading. “For a country that boasts of mango as its national fruit, it is ironic that the Philippine mango industry is not getting the exposure it deserves.”

Even Mexico at that time acknowledged that its Ataulfo variety mango was probably a hybrid from mangos planted by Filipino “overseas workers” who went to Mexico 200 years ago during the Manila-Acapulco galleon trade. Apparently, even back then, Filipino workers were being taken advantaged of by the countries they helped build.

Mexico’s Ataulfo mango, which is almost identical to the local mango we buy every day, was designated by Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial) as originating in the Mexican province of Chiapas.

However, despite Mexico claiming this mango variety as its own—similar to China’s territorial claims in the West Philippine Sea—Mexico exports the fruit to the US under the name Manila mango. Perhaps, “Mexican mango” did not have the same consumer appeal.

After 10 years, maybe the Philippine government is going to get Manila mango to apply only to fruit exported from the Philippines. That would be good.

Now, if the government can just get China to come on board with the same kind of agreement.

A businessman’s take on the economy Manny B. Villar

THE Entrepreneur

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Sixth of a series

hat makes the excitement of the tycoons more exciting is their boldness and aggressiveness in seeking opportunities even outside their core businesses.

San Miguel Corp. (SMC), which built up a conglomerate of food, beverage and packaging businesses, is now into energy, infrastructure, mining and telecommunications. Ayala Corp., probably the country’s oldest financial group, has long diversified into property, but is also now in energy, infrastructure and transportation industries.

What we are seeing in the business sector, particularly in the past several years, is a lot aggressive moves being made by the big business players. The excitement is not just in the retail business, but also in megaprojects that will drive the economy for a long time.

The government continues to implement road building and other infrastructure projects, but the private sector is playing a larger role now. By larger, I mean it is also investing its own capital, instead of just doing a project and collecting payment from the government. This reduces the pressure on the government to raise funding for every infrastructure project, and, at the same time, increases the money available to make a project come true. More money means more projects could be undertaken within a

shorter period of time.

The best example of the larger role that big business is playing in infrastructure development is the PublicPrivate Partnership (PPP) Program, which was launched in 2010.

To date, 12 PPP projects have been awarded, and several of them have been completed. These are as follows: 1. Muntinlupa-Cavite Expressway Project. The P2-billion, 4-kilometer Muntinlupa-Cavite Expressway, which opened on July 21, links the South Expressway with Cavite, Las Piñas and Muntinlupa. It was the first PPP project and was won by Ayala Corp.

2. PPP for School Infrastructure Project (PSIP) Phase I. 3. Ninoy Aquino International Airport Expressway Project (Phase II). The P15.96-billion project won by SMC involves the construction of a fourlane, 7.75-km elevated expressway that will link the Ninoy Aquino International Airport with the Skyway, Manila-Cavite Expresway, Macapagal and Roxas Boulevards, including Philippine Amusement and Gaming Corp. City.

4. PSIP Phase II

5. Modernization of Philippine Orthopedic Center.

6. Automatic Fare Collection System. The P1.72-billion deal to develop and operate a common ticketing system for elevated railways in Metro Manila, which was won by a consortium between Ayala and Metro Pacific Corp., is now operational.

7. Mactan-Cebu International A i r por t Pa s s e nger Ter m i n a l Building.

8. Light Rail Transit Line 1 Cavite Extension and Operation and Maintenance. This is a solicited project awarded to Light Rail Manila Corp, a consortium composed of Ayala Corp., Metro Pacific Light Rail Corp. and Macquarie Infrastructure Holdings. The project, estimated to cost P64.9 billion, will extend the existing LRT Line 1 from Baclaran station to Bacoor, Cavite, a distance of about 11.7 km.

9. Southwest Integrated Transport System Project. Ayala Land, which was declared early this month as the winner in the bidding for this project, will receive a 35-year concession to build and operate the Integrated Transport System South Project, as well as the commercial facilities in the 5.57-hectare former Food Terminal Inc. in October 2017.

10. Cavite-Laguna Expressway.

The P55.51-billion project awarded to MPCALA Holdings Inc. involves the construction and operation of a fourlane, 44.63-km expressway connecting Cavitex and South Luzon Expressway (Slex), starting from Kawit, Cavite, and ending in Biñan, Laguna.

11. Nlex-Slex Connector Road. The P26.66-billion project awarded to Citra Central Expressway Corp. is a 14.82-km, six-lane elevated toll road intended to connect the Slex at Alabang to Balintawak

in Quezon City, which is the beginning of the North Luzon Expressway (Nlex).

12. Metro Rail Transit Line 7. The project involves the financing, design, construction, operation and maintenance of a 23-km elevated railway line with 14 stations from San Jose Del Monte, Bulacan to Metro Rail Transit 3 North Avenue in Quezon City and a 22-km asphalt road from Bocaue Interchange of the Nlex to the intermodal terminal in Tala. The P69.3-billion project was awarded to Universal LRT Corp., a company controlled by SMC. SMC also built the Tarlac-PangasinanLa Union Expressway, which, among other benefits, has shortened travel time between Metro Manila and Baguio, a clear example of what good infrastructure can do, even for the lifestyle of the people.

Meanwhile, the government continues to sound off the private sector on other PPP projects, which should build up the momentum for more partnerships. Earlier this month, for example, the government said it was finalizing the details for the proposed P170-billion Bicol Express railway project, as well as the P3.5-billion upgrading of the Naga Airport runway.

Obviously, these and other projects that will be put up for bidding until 2015 will not be completed under the current administration, but the excitement of the tycoons and the benefits resulting from PPP and other infrastructure projects should encourage, if not compel, succeeding administrations to pursue the same track.

(To be continued)

For comments, e-mail mbv.secretariat@gmail.com or visit www.mannyvillar.com.ph.

Cost-averaging is not an investment strategy John Mangun

OUTSIDE THE BOX

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he Philippine Stock Exchange is by conventional definition in “correction” mode because it is down 10 percent from the recent and historic high. Note how we use the word “mode” in that sentence.

When a stock index, or share price moves down less than 10 percent, it is considered a “pullback” or “retracement.”

A movement between 10 percent and 20 percent is a correction. And beyond that, it is considered in a “bear market.”

Therefore, we could conceivably move down another 10 percent and it would still be considered a correction.

What should be your strategy at this point in the stock market cycle? It appears that every investment guru and expert in town is convinced that you should be “cost-averaging” your existing holdings. They see this as the best “strategy.” Cost-averaging in a declining trend is not an investment strategy.

At best, it is an investment technique and not a very good one at that, based on every model analysis made.

However, if you want to make regular investments in the stock market as you would put some of your paycheck in the

bank every month, that makes absolute sense. Take your extra P5,000 or P50,000 and put it into one of the professionally managed mutual funds available. That investment plan is one of the best things you can do for long-term wealth building.

But the idea of putting those same funds into an individual stock or even several issues on a regular schedule is wrong. Cost-average buying came from the idea that if you intend to invest, say P1 million, it was better to buy in tranches over a set period like one year to take advantage of the ups and downs of prices, even as the trend took the price higher. But even that has been shown to limit returns.

Statistical studies, which seem to be blasphemy to the cost-averaging believers, show that from January 1926 to December 2010 on the New York Stock Exchange, investing your money on one day yielded better results over every

20-year period than investing the same amount of money in equal chunks over 12 months. In the 70 percent of the time that investing everything all at once did better, it did better by 94 percent. When dollar-cost averaging did do better, it did so only by 77 percent. The same results happened for recent 10-year holding periods.

A strategy, whether in the stock market or in the battlefield, is designed for one important purpose: to answer as many as possible “If this/Then that” scenarios. “If the price goes down 10 percent, I will buy more” is a strategy.

“If it’s the end of the month, I will buy more” is not. The cost-averagers always talk about anecdotal experiences where they bought at P10.00 and continued to buy all the way up to P100 and made a fortune. Everyone is a winner when prices are trending higher.

No cost-averaging enthusiast ever mentions a strategy along the lines of “If the price goes up to here, I will take a profit.” They are only concerned about continuing to buy over time regardless of the price or the direction. In fact, the experts seem to prefer falling prices to be able to buy more cheaply. The theory is that over a long enough period of time, prices will always go higher. Further, these same experts seem to have never had a losing trade. What they never mention is the situation when they are holding losing positions.

Buying more shares as the price goes higher makes perfect sense. But at some level you must take the profit.

The cost-averaging group says that their strategy is based on continuous buying of increasing corporate value. That does not make sense.

The Price-Earnings-Ratio (PER) shows the relationship of company profits to share price. The PER of the top 500 issues on the New York Stock Exchange has varied from 70 in 2009 to 15 in 2012 to the current 20. Share price does not always accurately reflect corporate fundamentals.

Your stock-market strategy must include at least two If this/Then that scenarios. If the stock goes to this price, I will take a profit. If the price goes down to here, I will take a loss.” How you decide that either through corporate or price analysis really does not matter.

Gregg Fisher is president and CEO of Gerstein Fisher investment company and the 44-year-old manager of its global large-cap investment fund, whose current performance ranked 4th out of 296 peer funds. Fisher wrote this in the New York Times in 2011: “Dollar-cost averaging’s greatest value is to get people comfortable investing. The rational investor would not do it because it doesn’t make any sense, but we’re not rational.”

I wonder which of our local gurus he has been talking to.

E-mail me at mangun@gmail.com.

Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Taguig City tackles drugs and crime, attracts more investors better social services, such as education and health, to the citizenry, especially the poor.

Ernesto M. Hilario

ABOUT TOWN

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gnore all the derogatory things that you read or hear about Taguig City—that it is a haven of traffickers in illegal drugs and that criminals freely roam the streets and terrorize the citizenry.

That may have been true in the past, but not now.

The statistics do not lie: the city government has reported a 70-percent increase in arrests of drug suspects in the first half of this year compared to the same period last year.

Not only that. The city government has also posted a 56-percent drop in the crime rate during the same period.

One of the first things that Taguig City Mayor Lani Cayetano did upon assuming office was to launch a sustained campaign against illegal drugs and crime.

The Taguig City police has made significant headway in fighting the scourge of illegal drugs. They have arrested half of the Top 10 Most Wanted Illegal Drugs Target Personalities in the city. The most wanted drug suspects nabbed by the police are Jackie Abone (No. 2); Richard Silvestre (No. 4); Rawie Castro (No. 5); Isidro Llagas (No. 7); and Mardie Talampas (No. 8). It is, perhaps, only a matter of time before the other suspected big-time drug dealers in the city are rounded up and put behind bars.

Before the recent wave of arrests, the Taguig City police had also collared in previous years several members of a notorious drug syndicate. Those arrested included Joana, Henry and Ely, all surnamed Tinga.

The intensified war against traffickers in illegal drugs and other criminals who had given the city a very bad reputation in the past has turned the situation around and restored law and order in the city.

The stable peace and order situation in Taguig City is the very reason it is now a thriving business hub.

Top corporations are flocking to Bonifacio Global City (BGC). Among

those that have relocated to Taguig City are the Philippine offices of Coca-Cola Bottlers, General Electric, Hewlett-Packard and Sony. Several banks—Chinatrust Commercial Bank Corp., Eastwest Bank, Hongkong and Shanghai Banking Corp.— are also there now. The technology provider Smartmatic and Manila Water Co. (MWC) have also established their offices at BGC. The country’s top financial regulators also plan to move their head offices to Taguig City. These are the Philippine Stock Exchange, the Securities and Exchange Commission, and the Insurance Commission. The Intellectual Property Office and the Philippine Chamber of Commerce and Industries have already transferred to new addresses within the business district. Even the Supreme Court is looking at BGC to put up its chambers.

Leading academic institutions such as the University of the Philippines and the De La Salle University have also announced that they will establish separate campuses at BGC. If various enterprises, government offices and universities are making a beeline to Taguig City, it is because the city government has spared no effort to attract them with lower taxes, better services, zero tolerance for corruption, and no number coding for vehicles.

In fact, the World Bank has recognized Taguig City as one of the best places in the country in which to do business. In the World Bank’s latest Ease of Doing Business report, Taguig City ranked first among the cities in Metro Manila to have the least number of procedures in putting up a business.

With higher income from the vibrant and dynamic business environment, the Taguig City local government can now afford to provide

Finance dept takes correct stand on water rates legal tussle

What the government has agreed to, it should respect.

That’s the position of the Department of Finance (DOF) in the ongoing arbitration process between the Metropolitan Waterworks and Sewerage System (MWSS) and the two water concessionaires in Metro Manila, Maynilad for the west sector and MWC for the east sector.

The arbitration panel of the Singapore-based International Chamber of Commerce (ICC) has already ruled that the two water concessionaires can make rate adjustments in their respective areas of jurisdiction. The MWSS, however, continues to belligerently defy the ICC order.

The finance department, which oversees the operations of the MWSS, a government-owned and -controlled corporation, disagrees with the position of the regulatory agency. Finance Secretary Cesar V. Purisima has, in fact, sent two memorandums to Malacañang arguing that there is no basis for the MWSS to ignore the ICC ruling for three reasons.

One, the decisions of the international tribunal are final and executory since mutually agreed upon arbitration is an accepted alternative to expensive and long-drawn court litigation.

Two, it would compel the national government to pay Maynilad over P5 billion in corporate losses since 2013 in keeping with the sovereign guarantee to compensate the concessionaire for whatever financial losses arising from MWSS’s noncompliance with or breach of the original concession agreement signed by both parties in 1997.

And three, it would damage the Philippine government’s credibility before the international community, and jeopardize its investment-generation programs, including its public-private partnership campaign.

“Maynilad may call on the government under the undertaking letters in this specific situation,” Purisima said in his memo.

“MWSS’s reading would result in

the illogical situation where the MWSS is practically allowed to be in breach of its contractual commitment to observe the standard rates with no recourse for Maynilad.”

The DOF memo further said that the undertaking letters “clearly guarantee against delays in legitimate rate increases and do not foresee recovery of delays over the concession period.”

Purisima then pointed out: “We’re not siding with one or the other. We just want to make sure that what we entered into, we respect.”

Soon after the MWSS-Regulatory Office defied the December 29 ruling of the ICC Appeals Panel for it to grant Maynilad’s rate-adjustment dues in 2013, the concessionaire filed a second arbitration complaint before the Singapore court five months ago seeking P3.44 billion in damages to cover its losses.

The resolution of this controversy is imperative so that Maynilad can carry out improvement and expansion programs to upgrade its service delivery and cover far more consumers across the metro’s west zone.

Another compelling reason for the government to act on the issue is that the Philippine Atmospheric, Geophysical and Astronomical Services Administration has warned of the high probability of the current moderate El Niño intensifying into a strong one in the year’s last quarter up to the first quarter of 2016. A prolonged El Niño means less rainfall is expected and water supply to consumers may be adversely affected if water allocation to Metro Manila residents will be further reduced.

For its part, the Climate Prediction Center of the United Statesbased National Oceanic and Atmospheric Administration said this year’s El Niño, which began in March and could last for a year, may be one of the strongest ever in the historical record dating back to 1950.

Amid a looming water shortage, the government should realize that the continuing defiance by the MWSS of the water concessionaire’s petition for a reasonable rate adjustment will lead in the long run to less and less water coming out of the taps of consumers.

E-mail: ernhil@yahoo.com.

The global economy is looking very 1990s

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By Justin Fox | Bloomberg View

il prices are falling, seemingly inexorably. Emerging market countries are having currency crises. A previously unstoppable East Asian economic power—the world’s second-largest economy—is slowing, and the country’s leaders at times seem to have lost the plot. Russia is an economic mess.

Europe’s economy is being held back by German political decisions and doubts about the common currency. The US economy is relatively strong, but is beset by a productivity paradox in which remarkable Silicon Valley innovations don’t seem to be having an impact on the economic data.

Is this year starting to feel like it belongs in the 1990s, or what?

I’m not going to even get into all the pop-culture resemblances, or the fact that a Clinton and a Bush are running for president and Al Gore has reportedly been thinking about it. In economic terms alone, there are a lot of parallels between the current situation and that of the mid-1990s in particular.

I think all the parallels I mention in the first paragraph are self-explanatory except perhaps the one about German politics. So here goes: The 1990 decision by Chancellor Helmut Kohl to let East Germans exchange their largely worthless Ostmarks for Deutschmarks at a 1:1 exchange rate gave the reunified nation an economic hangover that lasted for years and affected its neighbors too.

In recent years austerity measures forced on southern European countries in part by German politicians have arguably again held back growth in the euro area.

Now, there are also lots of things going on in 2015 that shouldn’t remind anyone of 1995. History doesn’t repeat. I’m not even sure it rhymes.

But there do seem to be some similar economic forces at work.

One is that commodity prices are falling, as they did in the 1990s. The other is that the US economy has gone back to being the main driver of global growth, which has brought with it a big strengthening of the dollar. These two are related. Even with the recent boom in domestic oil production, the US is a net importer of commodities, so falling prices tend to boost growth. This is also true for the world’s other big economies—Western Europe, Japan and China—but all these places are facing economic headwinds that the US is not. So the US share of global economic output has been on the rise.

As the chart shows, during the long run the US share is shrinking as other countries catch up in affluence. But there’s been a strong cyclical element, as well. Now it looks as if the cycle may have turned, and if that’s the case we’re likely to see a few more years of the US gaining economic share just as it did in the second half of the 1990s.

Much of this gain will simply be the work of a strengthening dollar,

which will put pressure on countries that link their currencies to the dollar, as was the case in the late 1990s. That will mean more emerging-market currency crashes and perhaps financial crises. In the late 1990s those crises would scare investors in the US and usually bring a temporary decline in asset prices, but in the end the result was always more money flowing into the US, and continued economic growth.

It finally took a homegrown stock market bubble and crash to bring the fun to an end.

Alan Greenspan’s Federal Reserve of course played a role in all of this —holding back on raising interest rates in 1995 because of a (correct) hunch that a productivity boomlet was coming (current Fed Chairman Janet Yellen was a Fed governor at the time and supported this approach), then cutting them in late 1998 in response to a Russian debt default and the subsequent collapse of the

hedge fund Long-Term Capital Management. Cutting rates will be a lot harder to do this time around with the current effective federal funds rate at 0.15 percent, and there’s widespread concern that, after spending the past six years trying to keep the economy afloat after a historic financial crisis, the Fed doesn’t have a lot of ammunition left.

So that’s one big difference from the 1990s. Another is that the slowing East Asian juggernaut—China this time instead of Japan—accounts for a much bigger share of the global economy but is also a lot poorer on a per capita basis, which could have all sorts of economic and political ramifications. Yet another is that while the US is still the core of the global economy, it is a smaller core than it was in the 1990s and thus less reliable as a global growth locomotive.

Still, this does feel familiar. I’m just having trouble deciding whether to find that reassuring or alarming.

Tuesday, August 25, 2015

A7

Tech for the masses Edgardo J. Angara

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Filipino-based tech start-up recently won at the Global Entrepreneurship Summit, which was held in Nairobi, Kenya, and keynoted by US President Barack Obama. Besting 792 competitors from 74 countries around the world, Sari Software Solutions topped the summit’s information and communications technology category. The company was the lone awardee from the Association of Southeast Asian Nations.

The Filipino entry won because of the SariScan—a smartphone-based app that helps sari-sari store owners manage their businesses, make their operations more efficient, and keep track of their finances, including their receivables and from whom.

Other Filipino-based tech startups were highlighted in the August 18 issue of the Wall Street Journal.

One is Lenddo, which generates credit ratings for unbanked individuals based on their online behavior, thereby providing them easier access to small loans from major banks. The start-up is said to have helped six of the country’s top 10 banks make over 80,000 credit decisions on loan applicants.

Another is PawnHero, which acts like an online pawnshop that offers better valuations and lower interest rates than most of its brick-andmortar counterparts. The start-up already registered 5,000 customers in the Philippines, where many of our cash-strapped citizens find loan sharks and pawnshops more accessible than the country’s biggest banks.

The above examples show how technology can benefit the socalled base or bottom of the social pyramid and underscore the urgent need for Philippine Internet to improve its penetration and increase its speed nationwide.

E-mail: angara.ed@gmail.com.

Hong Kong can’t escape the turmoil next door William Pesek

BLOOMBERG VIEW

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welve months ago, it seemed Beijing’s retrograde politics would eventually sink Hong Kong’s exalted international reputation. Now China’s ailing economy seems likely to finish off the job sooner than anyone expected.

Hong Kong is dealing with a long list of problems, including tumbling tourist arrivals, a dollar peg that makes it the priciest place in Asia, a precarious property bubble and a leader not up to even mundane challenges never mind an existential crisis.

And that’s before you even get to Hong Kong’s biggest challenge: the fallout from China’s loss of economic credibility around the globe.

How else to explain the 9-percent drop in the Hang Seng Index since Beijing’s August 10 devaluation?

The sell-off put the city’s valuations at their lowest, relative to global equities, since 2003, and relegated Hong Kong to the same trading orbit as Pakistan, a place grappling with chronic power shortages.

Forbes magazine spoke for many last year when it asked: “Is Hong Kong Still China’s Golden Goose?”

The concern then was that political turmoil would disrupt Hong Kong’s status as China’s financial green zone, where companies can enjoy the rule of law and politicians can invest ill-gotten millions in real estate and with Beijing-friendly billionaires.

Hong Kong seemed to be the perfect Chinese special-enterprise zone—except for the mounting discontent among the city’s middle class, whose needs tended to be ignored in favor of the tycoons lording over the city. When hundreds of thousands of residents began protesting in favor of democracy in September 2014, the city’s chief executive Leung Chun-ying, like the good Communist functionary he is, shut the demonstrations down.

Political discord no longer seems an immediate existential threat to the city’s special status—but China’s sputtering economy does. Waning trust in the Chinese economy is driving investors away from Hong Kong, while China’s devaluation is making the city less attractive for mainland tourists enticed by cheaper destinations like Japan. Economy Secretary So Kam-leung blamed the 8.4-percent drop in visitors in July on the strong dollar. Retail sales in the city declined for a fourth

straight month in June.

Hong Kong doesn’t have many good options. For years economists urged Hong Kong to diversify its growth engines—more tech and science start-ups, fewer hedge funds and property developers riding mainland growth. Rather than deliver the changes Hong Kong needed, Leung has squandered his three years as chief executive kowtowing to his Communist Party benefactors in Beijing. An eventual Federal Reserve interest-rate hike is a huge worry for Hong Kong. But if global investors had more confidence in Chinese President Xi Jinping, they would be treating Hong Kong’s downswing as an opportunity to go bargainhunting. Hang Seng shares are valued at 9.7 times reported earnings, a roughly 44-percent discount to the MSCI All-Country World Index.

As Chinese growth slows to 5 percent from the desired 7 percent, Hong Kong could find itself in the same position as Macau. China’s other “special administrative region” has been among the biggest losers from Xi’s anticorruption drive, which led mainland high rollers to lower their profiles and avoid the city’s casinos.

Hong Kong, for its part, is finding it more difficult to attract the tens of millions of shoppers it has become reliant on. Hong Kongers might consider this a be-carefulwhat-you-wish-for moment. Last year residents lashed out at mainland tourists, as summed up by this December 31 South China Morning Post headline: “Rude awakening: Chinese Tourists Have the Money, But Not the Manners.” (China’s state-run media retorted with articles about ungrateful Hong Kongers.) As mainlanders now flock to traditionally less China-friendly places like Japan and Taiwan, Hong Kongers may be second-guessing their earlier ire.

An economy should never put all its proverbial eggs in one basket, as the leaders of Hong Kong arguably have done. But, for the moment, as China goes, so goes Hong Kong— and they’re both heading in the wrong direction.

2nd Front Page BusinessMirror

A8 Tuesday, August 25, 2015

www.businessmirror.com.ph

IMF urges Manila to shun tax IS A REPEAT OF ASIAN CRISIS IN THE OFFING? perks threatening fiscal gains continued from A1

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he Philippines must end unnecessary perks for industries so it can cut among the highest income taxes in the region without eroding the fiscal gains the economy has achieved, the International Monetary Fund’s (IMF) representative said.

Removing incentives for property developers, power-plant operators and miners will help plug a revenue shortfall that’s hampering the government’s ability to improve collection, IMF Philippine Representative Jay Peiris said in an August 20 interview in Manila. The country must limit benefits only to industries that really need it, like manufacturing, he said. “ The big boys aren’t paying, and then you squeeze everything from workers,” Peiris said. While the personal income-tax rate of as much as 32 percent is among

PEIRIS: “The country must limit benefits only to industries that really need it, like manufacturing.”

the highest in Southeast Asia, ta x revenue is still below 14 percent of the country’s gross domestic product (GDP).

Peiris said the tax holidays and

duty-free importation of equipment offered by the Philippines are among the most generous incentives in the region. Still, the country has lagged its neighbors in attracting foreign direct investment (FDI).

FDI rose 66 percent to a record $6.2 billion last year, still the least among major Southeast Asian countries, according to the United Nations Conference on Trade and Development.

“The most important deterrent to FDI here is weakness in infrastructure,” Peiris said. Investing more in infrastructure will “attract more FDI,” he said.

Cash handouts

Exemptions for industries led to P144 billion ($3.1 billion) in foregone revenue, equivalent to at least 1.5 percent of the country’s GDP in 2011, according to the Department of Finance. Proposals to reduce these incentives have languished in Congress for more than two decades.

The need to improve collection is

acute, as President Aquino targets expansion of 7 percent to 8 percent this year. Philippine economic growth slid to a three-year low of 5.2 percent in the first quarter as government spending faltered.

Mr. Aquino, whose term ends in June 2016, is seeking to increase spending in next year’s budget by 15 percent from this year. While his administration has cracked down on tax evaders and streamlined government spending and collection, “ it’s definitely not enough” to sustain fiscal gains, Peiris said. “The risk is on the revenue side.”

The government’s failure to boost spending has distracted attention from revenue collection, Peiris said. The country also needs to do away with secrecy laws protecting bank accounts from government scrutiny, he said.

“Tax reform should be on top of the agenda for the next administration,” Peiris said. “I’m all for reducing personal income tax. You can also recoup it from excise tax on fuel as oil prices are down.” Bloomberg News

BSP allows peso to fall to new five-year low. . . system, further declines in international oil prices, as well as the market interpretations of the intentions of the US Fed Reserve on the path and timing of its policy normalization.

With the interconnectedness of global goods and financial markets, the local financial markets are often the first to reflect any external developments onshore,” BSP Governor Amando M. Tetangco Jr. told reporters on Monday.

“Peso was trading pretty much in line with the rest of the region, although the move may look more drastic than the rest because of the holiday ‘catch down.’ Its total riskoff sentiment right now and panic, fear and hysteria have taken over.

Investors have turned overly bearish on the market, dumping risk assets as attention has turned to the slowdown in China and its possible effects on the global economy,”

Bank of the Philippine Islands (BPI) research officer Nicholas Antonio Mapa said in response to the BusinessMirror query.

The Philippine Stock Exchange (PSE) index also traded in the reds on Monday, wiping the gains of 2015, and closed 6.7 percent lower.

Tetangco said the central bank will intervene only for purposes of taking out excessive swings at the foreign-exchange market.

China’s yuan devaluation comes on top of a steep slowdown in the world’s second-biggest economy and Asia’s biggest (Japan was No. 1 back in 1994) and a commodities slump that is hurting nations from Brazil to Australia, Malaysia and South Africa. Chinese companies now threaten to displace exports from Asian and emerging market competitors just as the US Fed prepares to raise interest rates for the first time since the global financial crisis.

‘Nasty storm’ “A nasty storm is probable, not just possible” in countries like Brazil and South Africa, said Stephen Jen, cofounder of London-based hedge fund SLJ Macro Partners Llp. “But I do not anticipate a crisis or even very tense moments in Asia. The main reason is that the Asian crisis of 1997 already cleansed Asia’s financial system and Asia’s resilience ought to be higher.”

Before 1994, Asia was the darling of the investment world and viewed by some as a late-20th-century growth miracle. That euphoria didn’t last long.

China’s devaluation 21 years ago is often cited as a proximate cause to the subsequent emerging-markets crisis, while the

Fed rate rise the same year was the trigger, according to Lombard Street Research.

This year China’s surprise currency move has prompted Vietnam to devalue the dong. Kazakhstan’s currency tumbled more than 20 percent against the dollar on Thursday when the country relinquished control of its exchange rate. The South African rand and Turkey’s lira have extended losses.

‘Downward adjustment’

“ A downward adjustment cycle in Asia began in 2013—this cycle has been and will remain painful,” Morgan Stanley economists, including Chetan Ahya in Hong Kong, wrote in a report on Monday. While the downturn is likely to persist, “we believe a 1997-1998 scenario is unlikely.”

A more domestic debt profile, the presence of persistent disinflationary pressures, current-account surpluses, flexible exchange rates, and adequate FX reserves give policy-makers in the region better control over liquidity conditions, they wrote.

The Asian crisis was about indefensible currency pegs to the dollar, inadequate foreign-exchange reserves and heavy exposure to hot money inflows, says Stephen Roach, a senior fellow at Yale University.

Bloomberg News

Continued from A1

“The near-term outlook continues to be that of more volatility in both the global and local financial markets because of these factors.

Given that these [factors] are largely outside of our direct control, the BSP will continue to allow the exchange rate to adjust to market conditions, but, at the same time, carefully provide liquidity in the market should the exchange-rate volatilities become 1) excessive; 2) disruptive to

business planning; and 3) a trigger for the disanchoring of inflation expectations,” Tetangco said.

“So far, the peso volatility has remained within the middle of the range of the volatilities of regional currencies; and inflation expectations are still well-anchored,” he added.

Earlier, banking giant DBS Bank said in a research note that the BSP is seen to be more tolerating of a weaker peso to support the normalization of

inflation rate in the months to come.

Still above the pack

Despite the slump, the peso was still seen stronger relative to other Asian emerging economies who also took a beating on Monday.

“Despite today’s sharp move, the peso remains the top performer in the region given our superior external account and growth dynamics,” BPI’s Mapa said.

“Peso’s outperformance is a result of favorable economic fundamentals including strong structural inflows —a resilient OFW remittance flow and growing outsourcing sector; relatively good economic growth with acceleration in government spending and a strong domestic demand sector which offset weak agriculture and export sector,” ING Bank Manila economist Joey Cuyegkeng also said in his reactions statement.

BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said market players should remain calm as the macroeconomic underpinnings of the Philippines remains sound.

GSP+. . .

Continued from A1

EU-GSP+, only two-thirds of our product lines [are covered]. We won’t immediately be put at a disadvantage.

But if we’re going to graduate from the EU-GSP+, we have to move fast,”Rodolfo said in a previous interview.

Specifically in garments, aside from having a wide advantage in cost, Vietnam is also getting investments for upstream projects, as firms see the market-access benefit Vietnamese garments will enjoy, not just in the EU-Vietnam FTA, but also in the developingTranspacific Partnership Agreement, which Vietnam is also a part of. Van Hattum, however, dispelled notions of the Philippines falling behind in exports and market access, if the country takes advantage of the EU-GSP+.

“While negotiating an FTA would likely provide for more substantial benefits, the Philippines can tackle two issues at the same time—increasing exports, diversity and industrialization while pursuing an FTA. If I’m correct this is the DTI’s strategy, which makes a lot of sense,” van Hattum added.

At the moment, talks on the EU-Philippines FTA is at a standstill, but the DTI is aiming to gain headway on it later this year, hoping to end the scoping talks by September.