BusinessMirror January 13, 2016

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Monday 18, 2014 Vol. 10 No.2016 40 Wednesday, January 13, Vol. 11 No. 97

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Philippines still decades away from demographic sweet spot

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INSIDE

HE court case involving P400 million worth of contraceptive implants, which will expire in 2019, is the latest addition to the list of influences seen delaying the country’s entry into the so-called demographic sweet spot.

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LIFE

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REDEFINING FRENCH LUXURY FOR FILIPINOS BusinessMirror E1 | Wednesday, January 13, 2016 Editor: Tet Andolong

Redefining French luxury for Filipinos

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OR many pleasure seekers, living in the south of France is a dream. Aside from the sights and flavors of the countryside, people retreat to famous spots, like the Riviera, to relax and rejuvenate in style and elegance.

The enviable lifestyle in this famed travel destination is best exemplified in the French Mediterranean style of houses, which is known all over the world for its timeless and classic architectural design.

In the Philippines homebuyers can finally enjoy such luxury right in the south of Metro Manila, in the well-regarded neighborhood of Alabang. Versailles, a 75-hectare master-planned subdivision developed by State Properties Corp., reinvents the charmed, suburban way of life in southern France for the traditional Filipino family.

With French Mediterranean as

this, we matched the model houses with the overall European stateliness of the village that can be felt right at the beginning when one enters the grand gates.”

The RMDA-designed model houses—namely, Adelaide, Antoinette, Therese, Graciela and Ysabel—all possess an intricacy of details that is, at the same time, simplified and incorporated with design considerations to suit the Philippine setting.

“We made a Mediterraneantropical rendition. The windows, for one, are large enough to let lots of natural light and breeze to come in. We also took into mind the position of the sun throughout different parts of the day in the space planning. For instance, indoor games and activities are usually held in the afternoon. For this, the living room is strategically placed to avoid the heat,” Mercado explained.

Aside from sunlight and ventilation, the wellbeing of residents is further enhanced through streamlined living spaces. Each house boasts of spacious interiors and high ceilings. Areas such as the living room, dining room and kitchen

the design inspiration, the development features 10 model houses and a townhouse for buyers to choose from. Five of the houses were designed by Rolando Mercado Design Associates (RMDA), a design firm with over 40 years of extensive experience in architecture, interior design and project management.

“Versailles gains distinction from other premier villages in Alabang because of its unique character,” observed Rolando B. Mercado, principal architect and founder of the firm. “It’s like coming home to another country. For

can be interconnected to encourage comfortable interactions between family members and their guests.

The development’s distinction as a French Mediterranean-inspired community does not stop at the houses. A fully landscaped grand entrance is paired with a lighted colonnade and magnificent dancing fountain that add European sophistication. Other features and facilities complete the ambiance of elegance, such as the Versailles Palace—the village’s centerpiece clubhouse, which is a fully functional events venue that takes after the original Palace of Versailles in France. Indoor and outdoor amenities include a fully equipped gym and spa, as well as a sprawling swimming pool complex, ideal for leisure and exercise.

In its own right, the Versailles exclusive residential community in the Philippines is a destination itself—with all the comforts and distinction reminiscent of classic French architectural refinements, where Filipino families can lead a relaxed life away from the bustling cities of Metro Manila.

ANUVA TURNS OVER FIRST TANDEM BUILDING S B R S

OC Land Development Corp. recently completed and turned over Anala—its first tandem building, which is inside Anuva Residences. Anuva is a residential resort community, which offers spacious condo living with modern amenities. It has 515 units and features elaborate outdoor amenities.

Ready for occupancy, Anala features studio, one- and two-bedroom units in every floor. Each floor only has an approximate of 20 units, and each unit has a kitchen, a toilet and bath, and a laundry area. One- and twobedroom units will have a balcony.

“When we developed Anuva, we focused on low-density living to make sure that our residents have a home that truly feels like one,” said John Paul G. Reyes, SOC Land Development Corp. president. “We believe that sustainable living is possible even in a condo-living setup. We pride ourselves in providing homes that work with nature, not against it.”

PROPERTY

FELIMON G. YEE JR (from left), SOC Land general manager; Justine Anne Mercado, SOC Land director; Rufina Goh, one of the first unit buyers of Anala; Farah Denise Castro, SOC Land director; and John Paul G. Reyes, president of SOC Land

To help bring the distinct condo-living experience to its residents, SOC Land teamed up with the country’s leading broadband and multimedia services provider, PLDT Home, for the installation of PLDT Home Fibr in all of Anala’s

new units. PLDT Home Fibr is PLDT Home’s most powerful broadband with speeds of up to 100 megabits per second.

“Our residents deserve nothing less than the best-in-class services, and we definitely think that PLDT

MELANIE DUMLAO (left), lot owner, and Maureen Azarcon, VP for Sales of Citystate Properties and Management Corp.

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ITYSTATE Properties and Management Corp. (CPMC) awarded Melanie Dumlao her transfer certificate of title for a lot she purchased at Nale, Sandari Batulao. The awarding took place recently at the sales and marketing pavilion.

CPMC is the developer of Sandari Batulao, a luxurious ecocentric mountainside residential and leisure development with majestic Mount Batulao as its backdrop. Sandari Batulao is 10 minutes away from Metro Tagaytay and 15 minutes away from the beaches of Nasugbu, Batangas.

Visit www.sandaribatulao.com for more information.

MISTER MESSI Zidane’s entry breathes new life into Real Madrid

BusinessMirror

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ADRID—There is definitely something different about Real Madrid since Zinedine Zidane took over.

Obviously, it’s still too early to know whether he’ll succeed in his first headcoaching job, but it’s already clear that his arrival has breathed new life into the Spanish giant.

Just like that, there’s no more jeering at the Santiago Bernabeu Stadium. Players seem to have a new attitude. Critics have stopped talking about a crisis.

Putting a former club idol in charge apparently has produced the right result.

Real Madrid routed Deportivo La Coruna 5-0 on Saturday in its first game under the new coach. Although there was nothing unusual about the victory—anything other than a win wasn’t expected—it was obvious that the atmosphere at the Bernabeu had changed.

“When a game is won the manager can only be happy,” Zidane said. “I am happy with our first game and with the three or four days that we had of training sessions. What I liked most was the team’s attitude.”

The doubts that hung over the team when Rafa Benitez was in command were not there anymore. Even before the game started, there was a sense that things had improved. The confidence was back. Fans were smiling again.

“I was absolutely delighted with the fans, it was clear that they were right behind the team from beginning to end,” Zidane said.

“There was a good atmosphere.”

Nearly two months after an embarrassing 4-0 loss to Barcelona at the Bernabeu, spirits were finally high again at the club that calls itself the best in the world. For a change, Florentino Perez had a peaceful night at his presidential suite.

Real Madrid was inconsistent under Benitez, who struggled to get the team back on track following the defeat to Barcelona and the embarrassing elimination from the Copa del Rey for using an illegible player. He was being jeered at nearly every game at home, even in 8-0 and 10-2 wins, and setbacks in important league games eventually led to his firing after only seven months in the job.

“Everybody knows that Zidane was a great player and I’m sure he’ll be the same as a manager,” said forward Gareth Bale, who scored a hat trick against Deportivo.

“We’ve only trained a few times but we are professionals and we work hard to try to win games and all of the titles available. We have to carry on the same way, like we were doing before.”

Although the tested Jose Mourinho was on the market, Perez took the popular route and hired the largely inexperienced Zidane, the former France great who thrived with the club as a player more than a decade ago. He was Carlos Ancelotti’s assistant when the club won its 10th Champions League, but his headcoaching experience was limited to Madrid’s B team in the third division.

“I am happy because this is another challenge for me,” the 43-year-old Zidane said. “It is important to be here as a manager and what I want to do is enjoy it.”

He will have a week before Madrid gets back on the field, against Sporting Gijon in the Spanish league, again at home. The team is two points off provisional Spanish league leader Barcelona.

“The first game was really good but it is the start and we have to keep going,” Zidane said.

“Real Madrid always needs to win and we have to keep winning. We have to improve a lot of things and we are going to do it. We have weeks to work and we are going to improve, I am convinced of that.” AP

THE International Football Federation (Fifa)/FIFPro World XI TTeam 2015 with Brazil’s Thiago Silva (from left), Croatia’s Luka Modric, Brazil’s Marcelo, France’s Paul Pogba, Spain’s Sergio Ramos, Brazil’s Neymar, Brazil’s Dani Alves, Argentina’s Lionel Messi, Spain’s Andres Iniesta and Portugal’s Cristiano Ronaldo poses with their trophies during the Fifa Ballon d’Or awarding ceremony at the Kongresshaus in Zurich, Switzerland. AP

ARGENTINE BAGS BALLON ALLON D’ D’OR TROPHY FOR 5TH TIME

MISTER MESSI B G D

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The Associated Press

URICH—Now score is Lionel Messi 5, Cristiano Ronaldo 3.

Messi won the Ballon d’Or trophy on Monday as the world’s best player in 2015, ending Cristiano Ronaldo’s twoyear hold on soccer’s top individual honor.

“It’s incredible that it’s my fifth,” said the 28-year-old Barcelona and Argentina forward, who won four straight International Football Federation (Fifa) awards from 2009 to 2012.

Messi earned his record-extending fifth after being runner-up to his great rival for the past two years.

“It’s a very special moment for me to be back here on the stage,” Messi said in Spanish in his acceptance speech, “after being there in the audience watching Cristiano win.”

Five major titles for Barcelona last year— leaving none for Ronaldo’s Real Madrid— brought the golden ball back into Messi’s hands.

It was not even close.

Messi got 41.33 percent of total voting points in a 23-candidate ballot. Ronaldo received 27.76 percent and third-place Neymar, Messi’s Barcelona teammate from Brazil, got 7.86 percent. Voting was by national team captains and coaches, plus invited journalists, from Fifa member-countries.

As usual, Argentina captain Messi and Portugal captain Ronaldo ignored each other on their own ballot papers. Messi voted for three Barcelona teammates and Ronaldo listed three Madrid colleagues. However, Portugal Coach Fernando Santos did put Messi second to Ronaldo.

It was a stellar night for Barcelona and the World Cup-winning United States women’s team.

Luis Enrique was named best coach after guiding Barcelona to win the Champions

League, Spain’s La Liga, Union of European Football Associaiton (UEFA) Super Cup and Club World Cup. The women’s awards were won by US captain Carli Lloyd and Coach Jill Ellis.

Lloyd stood out by scoring six World Cup goals, including a stunning hat trick in the opening 16 minutes of a 5-2 rout of Japan in the final.

At first unable to speak with emotion, Lloyd was loudly applauded as she prepared to begin her acceptance speech.

“I honestly wouldn’t be sitting up here, standing up here, without my incredible teammates,” said Lloyd, who made the threeplayer short list for the first time at age 33.

Lloyd got 35.28 percent of the voting points, ahead of Germany’s Celia Sasic with 12.6 percent. Third-place Aya Miyama of Japan got 9.88 percent. Sasic also scored six goals in Canada to win the tournament Golden Boot, then retired aged just 27.

Ellis won the coaching award in women’s football ahead of two men: Japan Coach Norio Sasaki and Mark Sampson, who led England to third place at the World Cup. English-born Ellis got the most dominating win. She scored 42.98 percent, ahead of Sasaki on 17.79 percent and Sampson’s 10.68 percent.

The Americans last swept the women’s awards after its 2012 Olympic title, when forward Abby Wambach and Swedish Coach Pia Sundhage were rewarded.

Barcelona also swept the 2011 men’s awards when Messi and then-Coach Pep Guardiola won following the club’s previous Champions League title.

Guardiola, now coaching Bayern Munich, placed second to his former teammate on Monday, getting 22.97 percent against for 31.08 percent for Luis Enrique. Neither could attend due to team commitments.

Chile Coach Jorge Sampaoli placed third, on 9.47 percent, for guiding the host to a first Copa America title.

Messi lost out in the Puskas Award for most beautiful goal to Wendell Lira of Brazil. Lira’s bicycle kick for Goianesia against Atletico-GO in a league game topped an online poll that logged more than 1.6 million votes.

The gala night allowed Fifa to forget its corruption crisis and many legal ARGENTINA’S Lionel Messi poses with his problems in 2015 to focus on trophy after winning the Ballon d’Or award. AP soccer highlights.

Still, Fifa withheld the embattled soccer body.

Presidential Award that Sepp Blatter would “After these last few difficult months we traditionally pick and present. The outgoing can now focus fully on the main mission that Blatter was absent on Monday due to this is Fifa’s,” Hayatou said in French, referring to eight-year ban imposed by the Fifa ethics developing the game worldwide. committee last month.

A players’ vote organized by international Four of the five candidates competing to union FIFPro gave a World XI of: Manuel succeed Blatter in the February 26 election Neuer (Germany, Bayern Munich); Dani Alves attended on Monday: Prince Ali bin al-Hussein, (Brazil, Barcelona); Sergio Ramos (Spain, Real Jerome Champagne, Gianni Infantino and Tokyo Madrid); Thiago Silva (Brazil, Paris SaintSexwale. Only Sheikh Salman bin Ibrahim al Germain); Marcelo (Brazil, Real Madrid); Khalifa skipped the event.

Andres Iniesta (Spain, Barcelona); Luka Modric In Blatter’s absence, acting Fifa President (Croatia, Real Madrid); Paul Pogba (France, Issa Hayatou of Cameroon made the formal Juventus); Messi, Neymar and Ronaldo. opening speech. He noted the election meeting Fifa dedicated its Fair Play Award to “clubs in Zurich where 209 member-federations will and associations helping refugees.” also vote on restructuring and modernizing the

SAUDI-IRAN TENSIONS MAY FILTER ONTO PITC PIT H T HE political tensions between Saudi Arabia and Iran may filter onto the soccer pitch in the coming weeks with teams from the two nations due to play each other in the Asian Champions League and the Asian Under-23 Championships.

Relations between the countries deteriorated sharply in early January when Saudi Arabia executed a prominent Shiite cleric and Iranian protesters responded by attacking the Saudi embassy in Tehran and a consulate in another city. Riyadh then broke off diplomatic relations with Tehran.

There are already six games scheduled between the countries in the group stage of the continent’s biggest club competition and, depending on preliminary playoff results, there could be as many as eight. That leaves plenty of opportunity for tensions to spill over on the field, according to James Dorsey, an expert in Middle East soccer politics at Singapore’s Nanyang Technological University.

“Football is politics and that is certainly true with regard to international matches, particularly in countries like Saudi Arabia and Iran where political control of the sport is tight,” Dorsey told

SPORTS

and Iraq during the 2018 World Cup qualifying campaign due to instability in both of those countries.

“Iran is a safe country and if the Saudi Arabian football officials don’t agree with it, [they] must give evidence,” Kafashian was quoted as saying by the Tehran Times. “Saudi Arabia barred its citizens from traveling to Iran, but sport has nothing to do with politics.”

The AFC said in a statement last week that it was “monitoring the situation” in both countries, but has not commented further.

Saudi Arabia and Iran’s under-23 teams could

The host, Qatar, is hoping for big things from its young players as it gears up to host the 2022 World Cup. Under-23 stars Mohammed Muntari and Abdelkarim Hassan have already appeared for the senior team, giving them confidence they can add the U-23 Asian title to Qatar’s under-19 crown in 2014.

“Qatar is putting in a lot of effort and they are investing a lot in youth development,” said the under-23 team coach, Felix Sanchez of Spain. “The players will learn a lot from these competitions. And hopefully, Qatar will reach a very good level before the World Cup in 2022.”

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Maternal deaths per 100,000 live births in the Philippines

EXPERTS said the temporary restraining order slapped by the Supreme Court on the distribution of implants could impede efforts by the government to slash fertility rate and fast-track its entry into the so-called demographic sweet spot, a high-growth period when employment would be easier to find for people seeking jobs, as shown in this file photo . NONIE REYES

Millers report drop in sugar output

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Sports

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| WEDNESDAY, JANUARY 13, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

Yes, contrary to what the government and other experts have been claiming, the Philippines is actually decades away from enjoying the demographic dividend.

A temporary restraining order (TRO), issued by the Supreme Court (SC) on Implanon in June 2015, has prevented the government from administering the implants to poor women nationwide.

While the SC has yet to decide on the fate of Implanon, the implants are currently stored in government warehouses and could stay there until its expiration date in 2019.

“Conservative groups backed by the Catholic Church have charged C  A

Dumlao receives land title

Home Fibr will be able to provide the most powerful broadband at home.

Their service will fit in right with our own suite of world-class amenities,” Reyes added.

Three high-speed elevators and staircases serve the Anuva building.

Residents also enjoy the protection and convenience of a 24-hour security service, fire-detection and alarm system, and centralized garbage-collection system.

Strategically located between Sucat and Alabang in Muntinlupa, Anuva Residences prides itself in providing ample space inside and out. A total of 80 percent of the development’s land area is dedicated to world-class amenities, including swimming pools, clubhouse and a basketball court, a tennis court, an amphitheater, yoga deck, meditation area, nature trail and a jogging path, among others. A perimeter road was also constructed to allow for safe movement of residents, particularly children, in between units and amenity areas. www.socland.com.ph

B C U. O

B M G P

HE country’s sugar farmers and millers are now feeling the drop in their sugar production, as El Niño continues to linger in the Philippines, an industry group said on Tuesday.

Philippine Sugar Millers Association (PSMA) President Francisco D. Varua told the BM that sugar farmers and millers in the country are already seeing lower yields only about four months into the current crop year (CY). “[The decline in sugar production due to El Niño] has already been verified as we go along. Milling has started

Milling has started already and we are already feeling the drop in production in various mill districts.”

—Varua

already and we are already feeling the drop in production in various mill districts,” Varua said in a phone interview. The country’s sugar production season starts from September to August every year.

Sugar Regulatory Administration (SRA) Administrator Ma. Regina Bautista-Martin earlier said the

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HE government allowed the 10 -year Treasur y benchmark to move higher by 59.3 basis points to 4.218 percent at a bond sale on Tuesday, met by offers from a market hounded by

external volatilities.

The Bureau of the Treasury (BTr) sold only P22.18 billion of the P25 billion the government intended to raise, an indication of its willingness to allow the 10-year rate to move up but by only so much.

Four months earlier, the gov-

PESO EXCHANGE RATES n US 47.2710

ernment thumbed down all bids tendered for the reissued T-bonds that would have generated P25 billion because the market at that time wanted unreasonably high interest rates for the IOUs. The domestic bond market is comfortably liquid based on offers

GOVT TO RECOGNIZE LOCAL HEALERS AS SAFE

latest estimates of the agency, as of October 2015, revealed that the country’s sugar output for CY 2015 to 2016 may only reach 2.228 million metric tons (MMT), 3.55 percent lower than last crop year’s total production of 2.31 MMT. The SRA attributed the expected decline to C  A

Govt tempers rise in rates of 10-year T-bonds B B C

BMReports

from the various government securities dealers that put forth bids aggregating P28.08 billion at Tuesday’s auction.

The Treasury allowed the rate to climb to signal to the market the government is now willing to

B M R M

Conclusion ANILABASED albularyo Tata Omeng thumbed down the plan of the Department of Science and Technology (DOST) and the Philippine Institute of Traditional and Health Care (PITAHC) to recognize local healers.

“Local healers do not need [certification]. I believe we’re doing a good job and we do not need the government’s intervention,” he said.

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n JAPAN 0.4016 n UK 68.7273 n HK 6.0903 n CHINA 7.1955 n SINGAPORE 32.9484 n AUSTRALIA 33.0335 n EU 51.3316 n SAUDI ARABIA 12.5938

Source: BSP (12 January 2016 )

BMReports BusinessMirror

A2 Wednesday, January 13, 2016

www.businessmirror.com.ph

Govt to recognize local healers as safe C  A

PITAHC hopes to roll out its certification program for albularyo, hilot and other types of local healers in the Philippines this year. The government-owned and -controlled corporation (GOCC) said this will ensure the safety of Filipinos who seek their help despite the lack of scientific basis to prove the efficacy of chants and prayers in treating diseases.

“The goal is to promote the practice of traditional medicine and the use of traditional products which are safe,” said Dr. Isidro Sia, executive director of PITAHC. Of the 30 PITAHC employees, three are devoted to helping groups, such as the Association of Traditional Health Aid Givers (ATHAG), Alyansa ng mga Manghihilot at Albularyo (AMA) and Hilot Pinoy.

The GOCC aims to gather as many local

healers as possible for its certification program. Through these big groups, PITAHC hopes it could reach out to smaller groups of healers in the countryside. “In Tayabas, which is my hometown, there is a group of healers there. You can also find healers in Bicol, in Legazpi City. The country has many of these village healers,” Sia said.

Francisca R. Solmerano, a hilot from Imus City, said she’s quite apprehensive about reports that healers will have to secure certification from the government. For almost 60 years, Solmerano has been using sampaguita oil and prayers to help her patients.

“I could secure certification if it would be required by the government, I’m just not sure if it’s something I need. As for me, I rely on oil and faith,” Solmerano said.

For his part, Tata Omeng said he is not keen on securing government certification.

“I will not lose patients if I won’t apply for it.”

PITAHC, however, clarified that it will not require healers to apply for certification. The GOCC said the certification is aimed at giving their patrons more confidence that the processes used by healers are not harmful. It will also not require healers to change their practice.

“Traditional medicine has an important role in the health-care delivery system and it could help in achieving our ultimate goal of universal health care. We want to achieve all these, but we want to make sure that we have control,” Sia said.

PITAHC said it is now organizing a national committee for local healers with ATHAG, AMA and Hilot Pinoy. The three groups are also involved in the crafting of a code of ethics for hilot. Sia hopes that the program for local healers could be rolled out by 2016.

“We want guidelines for the practice of

hilot and for healers to undergo training.

We want hilot to be on equal footing with other traditional healers who are into acupuncture and naturopathy,” Sia said.

Hilot and albularyo patron Nenita Cruz said she was “thrilled” when she found out that certifications will be provided for local healers. The news prompted her to recommend her friends to a hilot who prepares a special treatment to sooth her aching joints.

“There are those who don’t believe in hilot. With the certification in place, they will no longer doubt the efficacy of their methods. This will also help those who cannot afford to go to hospitals or see a doctor,” Cruz said.

The certification, she added, would also help pinpoint areas where there are local healers.

PITAHC said it intends to preserve traditional, natural and cultural heritage, especially a community’s medical practices

and medicinal plants it uses. It also aims to come up with a fitting classification for local healers.

“We will have to find a generic term. [But] manghihilom is a nice term,” Sia said.

PITAHC hopes that the certification will make it easier for people to trust them. The GOCC has yet to finalize the requirements for certification, but it vowed to publish these, as well as the list of certified healers on its web site.

Sia, however, cautioned that the certification process could be long and arduous. This is because the government wants to ensure that the process would be mindful of the beliefs of people who patronize local healers. “We don’t want to just dismiss supernatural beliefs. These beliefs are part of Filipino culture. We just want to make sure that these would not cause harm to people,” Sia said.

Philippines still decades away from demographic sweet spot C  A

that the implants are abortifacient.

Some of the implants have already expired. It’s a terrible situation,” University of the Philippines economist Ernesto M. Pernia told the BM.

Population Commission Executive Director Juan Antonio Perez III said, however, the implants are still in good condition and will be ready for immediate distribution once the TRO is lifted.

Perez sa id t he Depa r t ment of Hea lt h (DOH) wa s able to d ist r ibute t he i mpl a nts to va r iou s reg ions n at ionw ide bet ween Apr i l a nd May l a st yea r. But t he DOH wa s forced to su spend its d ist r ibut ion to women i n ot her pa r ts of t he cou nt r y bec au se of t he T RO. The DOH bought a total of

600,000 implants, according to previous reports. Implanon is included in the list of temporary contraceptives being distributed by the national government in accordance with the provisions of the reproductive health (RH) law.

“The implants are still viable and these would be kept in good condition. That can be made available immediately if the TRO is lifted, so it would be good if the Supreme Court can decide on this issue favorably,” Perez said.

He said this and the confirmation of Health Secretary Janette Garin that the RH budget for 2016 was scrapped made the population conundrum a difficult one to resolve.

The DOH and even civilsociety groups lamented the removal of the P1-billion budget to provide free condoms,

IUDs and birth-control pills nationwide.

While the RH program still has some stock of contraceptives left over from the 2015 allocation, these are only enough to cover the requirements up to the second quarter of this year. There could be a shortage toward the second half of the 2016, according to Perez. “[The supply] might get deteriorate toward the second half of the year. The demand is high for pills, for injectables,” Perez said.

“We hope that the cut in the budget will be mitigated somehow. Hopefully this year, otherwise our momentum will be lost or [the program] might be compromised,” he added.

The lack of budget for RH and the TRO could cause the nationwide contraception use rate to drop to 23 percent from the current 46 percent, an

increase in fertility rate to above 3 percent, and more maternal deaths.

Currently, Perez said the maternal death rate is at 200 deaths per 100,000 live births. An additional 50,000 births this year could mean 100 more women dying due to childbirth.

Perez said these are the consequences of the additional costs that would have to be shouldered by poor women in far-flung areas of the country.

Women living in far-flung areas have little or no access to contraceptives and are forced to dig into their own pockets if they want to plan their family through artificial means.

He said a month’s supply of pills costs anywhere from P40 to P400, while injectables cost P100 to several hundred pesos.

Condoms are the cheapest, at less

than P20 each.

These items become more expensive in the provinces as traders have to pass on logistics cost to consumers. End-users also incur more expenses as they would have to travel to cities to buy contraceptives.

“If contraceptives are no longer available at the barangay level, buyers would have to go to town to buy what they need at higher prices. In the end, the cost to households may be higher than the real value of the contraceptives,” Perez said.

The problem with the increase in fertility is that it serves as a major hurdle to allowing the Philippines to reap the so-called demographic dividend. Contrary to the belief of some groups and individuals, the Philippines is far from being in a demographic sweet spot.

Even Economic Planning

Secretary Arsenio M. Balisacan said it will take the Philippines no less than 30 years to start reaping the demographic dividend.

Balisacan said this is mainly due to the high fertility rate in the Philippines. Fertility rate, he explained, is the number of children a woman can give birth to in her lifetime.

Other countries, including Korea, Thailand, Indonesia and Taiwan, were able to increase investments in health and education because of the significant decline in their total fertility rate (TFR). These countries attribute the cut in fertility rate to aggressive family planning programs.

Pernia said the decline in TFR will also allow households to increase their spending for health and education. Also, the government will no longer need huge budgets for social spending and could use these funds instead to construct more public infrastructure.

More investments in infrastructure would bring the Philippines closer to enjoying the demographic dividend—the accelerated economic growth that may result from a rapid decline in a country’s fertility and the subsequent change in the population age structure.

“The pattern of fertility rate now [in the Philippines], it’s declining but at a very slow rate of decline compared to what happened to our neighbors.

That window of opportunity [demographic dividend] will not happen soon,” Balisacan said.

Govt tempers rise in rates of 10-year T-bonds C  A

accept higher bids, according to an economist at a local bank.

“The BTr partially awarded the 10-year paper at its auction today, careful to not let rates rise too quickly. The BTr has finally come to terms with the rising interestrate environment but was not willing to let yields float all the way to 4.3 percent, which is the rate at which the auction would have been fully awarded,” Bank of the Philippines research officer Nicholas Antonio Mapa said.

“The market will take this as a signal that the BTr is willing to accept higher bids but that the rise in yields will be graduated, to keep borrowing costs for the government at a minimum,” he added.

news@businessmirror.com.ph

BMReports BusinessMirror

Wednesday, January 13, 2016 A3

Next administration must cut power rates to attract manufacturers to locate in PHL

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RINGING down the cost of power should be on the agenda of the next administration to give the country a chance to stand toe-to-toe against our regional competitors in attracting investors in the manufacturing sector, said Rick Santos, newly installed president of the American Chamber of Commerce of the Philippines (AmCham).

Santos said that, while the Philippines is expected to sustain its growth momentum, even with the foreseeable cooling of China’s economy, it should be wary of its rivals; particularly Vietnam, whose exports growth bucked the slowdown in neighboring economies.

“I don’t see Vietnam as a direct competitor of the Philippines on the business-process outsourcing side but on the side of manufacturing,” Santos said in an interview on Tuesday.

“For the next administration, the high cost of power needs to be addressed, as our rates remain one of the highest in Southeast Asia,” he added.

This is key for the Philippines to benefit from the slowdown of the world’s second-biggest economy, effectively sending a good signal to manufacturing firms looking for alternative sites of production, Santos said.

Ramping up the manufacturing sector has been the cornerstone of the Department of Trade and Industry’s (DTI) industry-development thrust.

The DTI recently boosted its budget for its Manufacturing Resurgence Program to P289 billion for 2016.

The need to get an edge over Vietnam is underlined further by the fact that the East Asian nation

For the next administration, the high cost of power needs to be addressed as our rates remain one of the highest in Southeast Asia.”—Santos

PHILIPPINE Chamber of Commerce and Industry (PCCI) President George Barcelon (left) briefs Martin Tlapa, deputy minister of Foreign Affairs for Economic Relations of the Czech Republic, on the various investment opportunities in the country, including opportunities in the manufacturing sector, at the PCCI office in McKinley, Taguig City. ROY DOMINGO

is included in the Trans-Pacific Partnership (TPP) agreement, and has been aggressive in concluding free-trade agreements with countries that are also the Philippines’s top trading partners.

Economists said Vietnam’s inclusion in the TPP serves as a catalyst to attract more foreign investments to Vietnam, especially in garments and textile manufacturing.

Vietnam’s 10.3-percent growth in manufacturing in the fourth quarter of 2015 dwarfs the 1.0-percent growth in the Philippines’s value of production index recorded last November.

Santos said the other initiatives that the next administration should tackle include quicker infrastructure rollout, reforms in the judicial branch and transparency in governance. Catherine N. Pillas

Exporters to continue seeing drop Millers report drop in sugar output in sales as weak demand to persist C  A

B CAI U. ORDINARIO

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HE country’s lackluster export performance is expected to continue this year on the back of weak global economic growth, according to the National Economic and Development Authority (Neda).

In a statement, Economic Planning Secretary Arsenio M. Balisacan said that while the country’s export earnings may post a “slight uptick ” this year, external factors, such as weak global demand will paint a grim picture in export performance.

“Although a slight uptick is anticipated in 2016 for exports, risks are skewed toward the downside, as a more protracted slowdown across emerging economies could have substantial spillovers to other developing economies and eventua l ly hold back recovery in advanced economies,” Balisacan said.

To minimize the country’s export losses, Balisacan urged the government to improve the competitiveness of local industries, especially in the light of the Asean economic integration, which took effect on January 1, 2016.

Balisacan said the government can do this by encouraging local businesses to diversify their products and expand their export market.

The country, he said, can also maximize the Asean single

Risks are skewed toward the downside, as a more protracted slowdown across emerging economies could have substantial spillovers to other developing economies.”—Balisacan

market, and trade with nontraditional export markets in the region. “ The government needs to continue to strengthen efforts to improve competitiveness of our local industries as the other Asean member-states continue to improve theirs. A well-organized and coordinated mechanism that can provide negotiating experience, policy research and analytical preparation support, as well as physical and financial resources, will need to be institutionalized,” Balisacan said.

In November 2015 the Philippine Statistics Authority (PSA) disclosed that export earnings posted a contraction of 1.1 percent to $5.12 billion.

Merchandise exports for the Januar y-to -November per iod posted a contraction of 5.8 percent to $53.988 billion from $57.299 billion in the same period in 2014.

This lackluster performance will cost the country to miss its export-growth target of 5 percent in 2015. The country’s export performance has been in the red for the first 11 months of 2015 except for March, when exports posted a 2-percent growth.

“In order to achieve the fullyear target for 2015, merchandise exports in December 2015 would have to register a total of $11 billion, equivalent to a growth of 129 percent,” Balisacan said.

Still, Balisacan said the Philippines recorded the least export decline among the monitored economies in East and Southeast Asia for November 2015. Except for Vietnam, most economies in the region posted slower growth in merchandise exports.

He added that all key commodities registered double-digit declines, except for manufactured goods, which posted a 3.6-percent year-on-year increase, as shipments of electronic products continued to recover.

The country’s top export, electronic products, booked $2.774 billion worth of earnings. This represented 54. 2 percent of the tota l ex ports revenue in November 2015.

It increased by 9.3 percent from $2.539 billion registered in November 2014. The increase was largely due to the 5.7-percent growth in Components/Devices (Semiconductors).

Sem iconductors accou nted

for 38.3 percent among electronic products. It amounted to $1.961 billion in November 2015, higher than the $1.855 billion in November 2014.

“The country’s positive performance in the sales of semiconductors bucked the international trend, as worldwide sales were down in November 2015. Thus, the modest growth in exports of goods from the electronics and semiconductors segment is expected to continue propping up total merchandise exports,” Balisacan siad.

T he countr y’s total ex port receipts from its top-10 market destinations for the month of November 2015 was valued at $4.340 billion, or 84.8 percent, of the total.

Japan, including Okinawa, remained as the country’s top export destination with revenue amounting to $1.091 billion, comprising a 21.3-percent share to total exports for November 2015. However, this was a 1.8-percent decrease from $1.112 billion recorded in the same month a year ago.

The United States ranked second, accounting for 14 percent of total exports, with export receipts valued at $716.73 million in November 2015. It recorded an increase of 5.1 percent from $682.11 million in same month last year.

Hong Kong ranked third with $557.71 million, or a 10.9-percent share in the total exports. It grew by 21.3 percent from $459.89 m i l l ion i n t he s a me mont h a year ago.

the “unfavorable” weather conditions and reduction of sugarcane areas.

Furthermore, data from the SR A showed that raw-sugar production from September 1 to December 13 declined by 31.79 percent to 511,885 metric tons (MT), as compared to 750,488 MT reported in the same period last year.

To combat the impacts of the prolonged dry spell, Varua said the PSMA is making arrangements with the Department of Agriculture (DA) to conduct cloud-seeding operations in different parts of the country.

The SR A, for its part, assured that it will closely monitor sugar production in 2016 and will be ready to “ensure stable and sufficient supply of sugar, notwithstanding severe droughts caused by El Niño.”

Varua said the sugar farmers and millers are also expressing their worries over the lingering dry spell’s effect to the next cropping season.

“Hopefully, it will not drastically affect the production in the next crop year. If the El Niño persists, then even the next crop year will also be affected,” he said.

Meanwhile, the industry leader said based on initial estimates, at least 130,000 MT of raw sugar will be shipped to the US to fill up the country’s quota.

“The initial report is the whole quota of 130,000 to the US will be shipped out. That’s

31.79%

Drop in raw-sugar production from September 1 to December 13

the estimate that I’m getting from all the traders that I have contacted,” Varua said.

The SR A recently released Sugar Order 4, authorizing the export of 135,508 MT of sugar to the US under the tariff quota scheme.

“A ll ‘A’ or US quota sugar quedan-permits issued in previous crop years are eligible for shipment... provided that the ‘A’ or US Sugar quota sugar quedanpermits are verified and reinstated,” the SO read.

“In the event the volume of reinstated ‘A’ sugar is not sufficient to fill up the allocation to the Philippines, locally produced, original ‘B’ or domestic market sugar/ quedans for CY 2015 to 2016 and for two previous crop years shall be eligible for shipment to the US,” it added.

The SR A said those who will export to the US using domestic sugar may replace the volume by importing raw or refined sugar from the world market, keeping in mind the volume needed to balance supply and demand in the local market.

A4 Wednesday, January 13, 2016

BMReports BusinessMirror

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Palace sees short slump as firms buy back shares

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B VG C  D C

at P58 per share, equivalent to P337.83 million.

Belle, likewise, bought back 839,000 shares with prices ranging from P2.40 to P2.54 a share in the amount of P141.67 million.

Meanwhile, Phinma and Splash also repurchased their own shares with P14.03 million and P1.88 million, respectively.

UBLICLY listed companies took advantage of the slump on Tuesday and initiated share buybacks, which Malacañang sees as market forces at work.

At least six firms have repurchased their own shares following the successive drop in their shares prices; drops that began on the first trading day of the year.

The bearishness of the market has been pinned on worries on China’s economy. These worries wiped out some P700 billion in value of the combined market capitalization of listed firms as foreign funds dumped Philippine shares.

But Communications Secretary Herminio B. Coloma Jr. presented a rather optimistic face in a news conference on Tuesday. Coloma said the Aquino administration considers investor sentiments driving share prices downward are contrary to the outlook on the Philippine economy as issued by ratings agencies.

Coloma explained in Tagalog the market is participated into by foreign companies with global or regional operations.

Every move they make, their business decisions, are affected by developments in other economies, he said, adding “this is part of the dynamics of an active market.” “’Yung tinatawag na bear market ay maaari din ’yang magbago sa darating na panahon at maging bull market naman.”

Recovery

SHARE prices recovered on Tuesday, gaining 42.29 points as the Philippine Stock Exchange index (PSEi) clawed its way back at 6,330.55 points.

The main index was up all day on January 12, even reaching as high

6

Outlook

The number of listed firms that began buying back shares on January 12 as 6,433.75 during the morning trade. Traders said investors decided to sell during the afternoon trade, paring gains.

Nonetheless, other subindices were mostly up.

The broader All Shares index gained 17.49 to 3,645.46; the Financials index rose 17.14 to 1,453.43; the Holding Firms index dropped 0.16 to 6,012.61; the Services index was up 6.98 to 1,390.66; the Mining and Oil index fell 59.44 to 9,189.98; and the Property index climbed 28.40 to 2,573.92.

Value of trade, however, was still thin at P4.69 billion. Gainers led losers 96 to 77 and 45 shares were unchanged.

Most of the day’s top traded were up. Ayala Land Inc. was unchanged at P30; SM Prime Holdings Inc. rose 0.62 to P19.82; Ayala Corp., dropped P5 to P660; Metropolitan Bank and Trust Co. rose P0.95 to P69.95; Megaworld Corp. increased P0.06 to P3.58; and Bank of the Philippine Islands climbed P1.85 to P83.10.

“The [market] recovery is normal following the steep sell-off. The market bounced today as there are no fundamental factors that would

THIS file photo shows a trader looking at a tearsheet paper at the Philippine Stock Exchange Trading floor in Makati City, on September 17, 2007.

Listed firms began buying back shares on January 12 at the onset of bearish trading, which Communications Secretary Herminio B. Coloma Jr. described as temporary. NONIE REYES

prevent it from recovering,” said April Lynn Tan, head of research at COL Financial Group Inc.

Buyback

COL Financial Group’s Tan also sees the buyback tack of listed firms on Tuesday in a positive lens.

“This development indicates their respective share prices have become attractive given the steep sell-off in the past week, including last Monday.”

The firms that initiated a buyback program on Tuesday include the Lopez-led Energy Development Corp. (EDC), port operator Interna-

tional Container Terminal Services Inc. (ICTSI), property firm Terminal Belle Corp., casino operator Bloomberry Resorts Corp., construction firm Phinma Corp. and consumer goods maker Splash Corp.

A share buyback is usually good for a company if it plans to reduce the number of its shares on the market, thereby increasing value and solidifying control of the firm.

Lexter Azurin, analyst at Unicapital Securities Inc., explained that a buyback program is a remedial measure to support the value of these companies’ shares, as well as

to take advantage of the resulting low prices of the shares.

Astro del Castillo, president and managing director of First Grade Finance Inc., said the companies are taking advantage of the situation to boost the confidence of the investors and the shareholders to the company.

“It’s a good investment, as well, given the prospects that it may reap in the future,” del Castillo said.

The EDC has earmarked P4 billion for its buyback program, and has bought some 900,000 shares, with price starting at 5.53 a share.

ICTSI, on the other hand, has repurchased 550,000 shares

COLOMA said that, aside from market forces, the outlook by investors on the Philippine economy should also affect the prices of stocks.

The latest outlook by global credit-rating agencies show their satisfaction on our economic per for mance, Coloma said in Tagalog during a briefing for Palace reporters.

He also cited past achievements by President Aquino, such as getting praise from foreign leaders and a thick schedule of meetings with foreign businessmen and investors.

These, he claims, show the latter’s trust in the vitality and stability of the Philippine economy.

Credit-rating agency Moody’s Investors Service has retained last December the Philippines’s credit rating at Baa2, or one notch above the minimum investment grade, w ith a stable outlook.

Standard & Poor’s also has the same credit rating for the Philippine government—one notch above the minimum investment grade—while Fitch Ratings rates the Philippines at the minimum investment grade.

It was only during this administration that the Philippines had achieved investment grade status from the three most reputable creditratings agencies, although the investment grade status refers mostly to the government’s risk of defaulting on its debt, not in the country’s economic growth outlook.

Paje to next DENR chief: Pursue total log ban, sustain reforestation program 350,000 ha B J L. M

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NVIRONMENT Secretary Ramon J.P. Paje on Tuesday said that maintaining the twin policies of imposing a nationwide total log ban and reforestation are a must to sustain gains achieved by the Department of Environment and Natural Resources (DENR) in the forestry sector.

The next administration, he said, should not lift the logging ban or slow down reforestation activities.

Paje also stressed the need to continue forest-recovery efforts as mandated under Executive Order (EO) 23 signed by President Aquino in February 1, 2011, declaring a moratorium on the cutting and harvesting of timber in natural and residual forests; and EO 26 signed on February 24, 2011, establishing the National Greening Program (NGP).

The DENR chief said preventing deforestation while implementing massive reforestation activities are essential measures in building the country’s resilience to natural calamities, and as a strategy to fulfill its international commitment to reduce the country’s carbon emission by 70 percent from 2020 to 2030.

Because of the successful implementation of the twin policies, Paje said the country gained international recognition of its reforestation program.

The 2015 Global Forest Resources Assessment 2015 report of the Food and Agriculture Organization of the United Nations

Size of forest area gained annually from 2010 to 2015 ranked the Philippines as the fifth among countries reporting greatest annual forest area gained from 2010 to 2015, with a total of 2.4 million hectares, or an average of 350,000 hectares per year.

“Sana kahit iba na ang DENR secretary, hindi ma-lift ang total log ban,” Paje said.

He added that the successful implementation of the total log ban and the massive reforestation is something the Aquino administration can truly be proud of.

The number of illegal logging hot spots in the country further went down from 31 in 2014 to 23 by the end of 2015, Paje said.

Before President Aquino took over in June 2010, there were a total of 197 illegal-logging hot spots.

This year, Paje said, the target is to neutralize illegal-logging syndicates operating in the remaining illegal-logging hot spots before Mr. Aquino’s Palace term ends in June 2015.

The anti-illegal logging campaign, Paje said, led to the confiscation of over 30 million board feet of illegally cut and processed logs that were used to manufacture a total of 146,471 school armchairs and furniture and repair 388 school buildings.

Confiscated forest products donated to other government agencies, meanwhile, were converted to 1,820 chairs, 105 double-deck beds, 110 hospital

beds, and partly used for repairs of 102 core shelters and 18 buildings.

The NGP, on other hand, has so far generated close to 2.9 million jobs and employed 413,362 people.

“Ito iyong mga programs na hindi na-implement ng maayos before,” Paje, who started his career in the DENR as a forester, said.

He added that the next DENR chief should also be able to maintain the balance between protecting the environment and exploiting the country’s natural resources to ensure sustainable development which, he said, marks his accomplishment as the country’s chief steward of the environment and natural resources for nearly six years.

“We were able to somehow maintain the balance. The biggest challenge to this department is to maintain the balance to sustain development,” Paje said.

“You cannot be 100-percent pro-environment or 100-percent pro-industry. Dapat balanced,” he added.

Director Ricardo Calderon of the DENR’s Forest Management Bureau said lifting the total log ban will revert back to the situation before the NGP was implemented, wherein the country is losing at least 110 hectares of forest every year.

“The next administration will have to think twice before lifting the total log ban. The people will not let that happen because they are very much aware of the importance of the forest because of the impact of climate change.”

AseanWednesday BusinessMirror

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Singapore’s next bond default looms in Pacific Andes tussle

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INGAPORE’S bond market may see its second default in as many months after creditors said Pacific Andes Resources Development Ltd. hasn’t honored some obligations on S$200 million ($139 million) of notes.

The Hong Kong-based firm said it received a letter from bond trustee HSBC Holdings Plc. alleging breaches on the 2017 securities in a Singapore exchange filing on January 10. Investors can request full immediate repayment if the company’s shares are suspended, according to the bond’s terms. Pacific Andes has halted trading in Singapore since November 25.

The HSBC letter adds a new twist to skirmishes at the troubled fishery group amid court battles and regulatory probes in Singapore and Hong Kong into its business transactions. Last November Singapore’s bond market had its first default since 2009, when Indonesian phone retailer PT Trikomsel Oke missed coupon payments on its debt.

“This situation is opening a can of worms in Singapore,” said Raymond Chia, head of credit research for Asia ex-Japan in Singapore at Schroder Investment Management. “Very few local corporate bonds are rated, and a number of issuers have weak credit profiles or challenging business dynamics, and that’s starting to show.”

Singapore investors have turned to high yielding bonds in the past seven years after interest rates hit a record low in the aftermath of the global financial crisis. The number of notes with coupons of more than 6 percent, a level associated with speculative grade in the local market, jumped from one in 2010 to 24 in 2014, before falling to 13 last year.

Notes issued by Pacific Andes and its unit China Fishery Group Ltd. are mired in distressed levels. The 8.5 percent bonds due July 2017 were last quoted at 20.5 cents on the dollar on January 11, according to prices compiled

by Bloomberg.

The securities fell 34 cents last December, capping a 73-cent plunge for the year.

Hong Kong-listed Pacific Andes International Holdings Ltd. owns about 66 percent of Pacific Andes Resources Development, which, in turn, controls 69.7 percent of China Fishery Group, according to company filings.

Both China Fishery and Pacific Andes have to make semi-annual coupon payments on January 30.

The Pacific Andes group is seeking to sell its Peru business while it fights some creditors to dismiss winding-up petitions and provisional liquidators in Hong Kong and Cayman Islands.

Geoffrey Walsh, a Hong Kongbased spokesman for Pacific Andes, declined to comment on the HSBC notice. The company is seeking legal advice on the matter and is “in an active dialogue with a substantial holder of the bonds with a view to establishing a transparent process for discussions” with other debt holders, it said in the filing.

“There hadn’t been a default in the Singapore dollar market in so many years that investors weren’t vigilant enough and a certain complacency had set in,” said Todd Schubert, the head of fixedincome research at Bank of Singapore, Oversea-Chinese Banking Corp.’s private banking unit.

“Over the years, as the number of outside, nongovernment-related issuers increased, so did the potential for a default.”

Bloomberg News

Wednesday, January 13, 2016 A5

Indonesia rate forecasts divided as China shatters post-Fed calm

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UST as slowing inflation seemed to have opened the door for Bank Indonesia to cut interest rates, the tumultuous start to the year in China may make policy-makers think twice.

Central bank Governor Agus Martowardojo told reporters in Jakarta on Friday that he would prioritize stability, a shift in tone from Bank Indonesia’s December statement that the room to loosen was “getting bigger.” Even so, nine of 15 economists surveyed by Bloomberg forecast benchmark borrowing costs will be lowered to 7.25 percent on Thursday, with the rest expecting them to be held at 7.5 percent. A premature cut could weaken the rupiah, which has fallen 0.5 percent this year, following a 10-percent drop in 2015.

“They would be advised, for the protection of the currency, to wait a little bit longer,” said Ray Farris, head of Asia macro strategy at Credit Suisse Group AG in Singapore.

“It would be very useful to have a couple of months of data that say the economy is beginning to pick up and, potentially, to get some equity inflows associated with

7.5%

Current Bank Indonesia benchmark interest rate

some positive surprises.”

Indonesia’s central bank is coming under political pressure to cut borrowing costs to stimulate an economy that is forecast to have grown at the weakest rate since 2009 last year. While inflation was the slowest since at least 2010 last December, last week’s plunge in Chinese stocks and the yuan threatens to ignite a regional currency war

and has raised concern Asia’s largest economy may be in worse shape than previously thought.

Coordinating Minister for Economic Affairs Darmin Nasution, a former central bank governor, has been invited to attend the twoday policy meeting that starts on Wednesday, the monetary authority said in a statement. Such a move is allowed by law, but the minister won’t have any voting rights.

The yuan has fallen 1.2 percent this year as China’s central bank weakened its daily fixings, providing a fresh headwind for Asian exchange rates that rallied after the Federal Reserve (the Fed) promised last month to tighten only gradually when it raised rates for the first time in almost a decade.

The calm that prevailed following the Fed’s move has been shattered

by China, said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. in Singapore. There is still some hope that the market will start to stabilize this week, he said.

Sacrificing growth

THE economy probably expanded 4.73 percent in 2015, missing the 5.7percent budget target, the Finance Ministry said this month. Growth of 5.2 percent is forecast for this year, according to a Bloomberg survey.

Inflation slowed to 3.35 percent last December, from 4.89 percent last November, after exceeding the central bank’s 3-percent to 5-percent target range since October 2014.

The rupiah has strengthened 0.7 percent against the dollar last month in the best performance in emerging-market Asia. That’s a reversal of fortune for a currency that dropped 34 percent over the four years through 2015.

Indonesia’s central bank will cut on Thursday as it has been sacrificing growth for rupiah stability, which has made the country’s government bonds Asia’s most attractive carry trade, Tim Condon, head of research at ING Groep NV in Singapore, wrote in a research note on Monday. The Dutch lender sees the key rate at 6.5 percent by year-end.

Bank Indonesia will be one of the first regional authorities to lower borrowing costs this year and will move in either January or February, according to an Australia and New Zealand Banking Group Ltd. research note released on January 8

by Glenn Maguire, chief economist for Asia Pacific in Singapore. An index of rupiah sovereign bonds, which jumped the most in 10 weeks on the day of the monetary authority’s statement last December, rose 0.9 percent over the last three months.

Rupiah stability

THERE is no urgent need to cut rates and a stable rupiah is arguably more important for growth, according to a DBS Bank Ltd. research note on Monday by analysts including Gundy Cahyadi in Singapore. At a time when there is talk of a currency war cutting borrowing costs may send the wrong signal, he wrote.

Bank Indonesia has held its benchmark interest rate at 7.5 percent since lowering it from 7.75 percent last February. The economy is dependent on inflows to finance a persistent current account deficit and reductions in borrowing costs could weaken the rupiah and reduce the allure of local currency sovereign bonds that attracted 97.2 trillion rupiah ($7 billion) of inflows last year. That offset a $1.6-billion outflow from equities.

“While the latest inflation and external balance data indicate that the time is ripe for monetary easing, the rupiah’s stability could be the last piece of the puzzle,” said Takahide Irimura, a senior economist at Mitsubishi UFJ Kokusai Asset Management Co. in Tokyo. “Given the volatility triggered by China, there’s a higher possibility Bank Indonesia will stay on hold again.”

Bloomberg News

Thailand transitioning into cashless society via e-payment plan

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HIS year will be the tipping point for Thailand’s mobile payment and digital wallet system, which could become a viable everyday payment tool over the next few years, industry veterans say.

This will be fueled by the proliferation of smartphones, the growing adoption of a digital lifestyle, a solid telecommunication infrastructure and a greater variety of service providers, as well as the government’s policy to promote national electronic payment (e-payment).

Apart from mobile operators— Advanced Info Service (AIS) through its mPay service, DTAC’s PaysBuy and True Move’s TrueMoney—several new players are entering the market.

They are Omise Co., 2C2P (Thailand), Line’s Line Pay, Pay Solution’s Pay Social, LnwShop’s Lnw Pay and PayAll, owned by popular actor Rattapoom “Film” Tokongsap.

Lazada (Thailand)’s helloPay and IP Payment Solution Co.’s PayforU are expected to join the mobile payment and e-payment gateway business this year.

In late December, the cabinet approved the Finance Ministry’s national e-payment master plan to promote electronic payment across the board with a view to creating a cashless society.

The e-payment master plan is expected to save the country 75 billion baht. Of the total, 30 billion baht would come from reducing the use of cash and checks, and the remaining 45 billion from the decline in traditional paper-based billing and statements.

The government’s Any ID scheme —which will enable anyone to transfer money and make financial transactions using their ID card, mobile number or e-mail address—and the expansion of electronic data capture will be completed by this June.

E-payment is aimed at allowing people to access money-transfer services even if they do not have a bank account, serving e-commerce, plugging loopholes in the tax system and directing subsidies to the underprivileged.

Last year’s mobile payment and e-wallet transactions on the three major mobile networks—AIS, DTAC and True Move—are expected to be worth 90 billion baht.

500,000 The number of online merchants in Thailand

Korkit Danchaivichit, deputy secretary-general of the National Broadcasting and Telecommunications Commission, says the regulator and the Bank of Thailand will discuss how to regulate the mobile money market, expected to gain momentum in the year ahead.

The full commercial launch of fourth-generation (4G) wireless broadband service, plus the greater availability of affordable 4G-enabled handsets, are also expected to boost the number of mobile Internet users, eventually leading to increasing use of mobile payment and digital wallets.

“This year we’ll see changes in consumer demographics, which will drive the adoption of mobile payment and trends in the utilization of mobile banking,” Korkit says.

The top-up prepaid mobile-phone market is expected to be worth 5 billion baht per year, with mobile operators earning 20 million baht to 30 million baht in interest.

The mobile wallet and payment system will enable consumers to pay the actual cost of goods and services on a satang basis rather than being rounded up to the nearest baht, Korkit says. The current system allows cash payments in 25, 50 and 75 satang to 1 baht.

“We expect mobile-payment transactions to surge by 1,000 percent this year.”

At least 30 million people in Thailand have never utilized mobile payment, representing a vast opportunity for the sector, says Punnamas Vichitkulwongsa, chief executive of Ascend Group, the parent firm of TrueMoney.

Target customers for mobile payment are credit-card users aged 15 to 40 who are willing to pay for online services, and nonbank users.

So far, 16 million customers

WHILE Thailand moves to progress into a cashless society through its national e-payment master plan, it remains vulnerable to hacking, as what happened recently, hackers took over several police web sites in Thailand, replacing the home pages with a message saying, “Failed law. We want justice!” The police on Tuesday said they were investigating if the hack was in response to a Thai court decision that has been widely protested in neighboring Myanmar. AP

have downloaded mobile-wallet apps from the three major mobile operators, but fewer that 3 million are active users.

Punnamas, who is also chairman of the Thailand E-payment Association, says the national e-payment system requires a clear and concrete policy regarding the amount of mobile numbers and e-mail addresses allowed to conduct payment transactions per user.

Strict rules governing digital money transfers are essential, as money transfers account for 70 percent of overall mobile transactions.

In order to strengthen the mobile payment and mobile money ecosystem, Punnamas says policymakers need to allow neutral and independent clearing houses to provide the infrastructure for the automated processing and settlement of transactions to nonbank service providers.

In addition, he says a pooled mobile-payment infrastructure is needed to reduce the investment costs and cut the operating costs of payment service providers.

TrueMoney aims to become Asean’s leading player over the next few years, Punnamas says. Last year the company spent 1 billion baht in

the six countries where it has operations to cash in on the growth of e-payment.

“Mobile payment in Thailand will take time to fully take off since the banking system and facilities are behind those of Singapore,” says Supreecha Limpikanjanakowit, managing director of Advanced mPay, the mobile payment arm of AIS. He urges the government to speed up the development of a digital economy with the implementation of security standards for digital payments, including an e-tax invoice system.

“Encouraging consumers to use social commerce technologies will spur the use of mobile payment,” says Pawoot Pongwittayapanu, chief executive of efrastructure Inc., the parent company of Pay Solutions, a Bangkok-based social-media payment service provider under the Pay Social brand.

There are around 500,000 online merchants in Thailand, 10,515 of which are online stores on Facebook and 11,213 on Instagram.

As of August 31, 2015, there were 37 million Facebook users and 7.8 million Instagram users in Thailand.

Pawoot adds that transport services, including the skytrain, subway

and airport rail links, will be another key area driving the mass adoption of mobile payment.

Kanokwan Wongwatanasin, chief executive of IP Payment Solution, says the company foresees significant opportunities to accelerate mobile payment and digital wallet services, thanks to the greater network coverage of the telecom infrastructure and increasing consumer awareness.

The company is spending 200 million baht developing its own mobilepayment gateway and services to capitalize on growing opportunities.

IP Payment Solution also provides a mobile-payment gateway and emoney system to organizations who want to provide e-payment services without investing in the necessary infrastructure.

“Thailand’s e-payment market is the fourth fastest growing in Asia,” says Michael Yeo, research manager of IDC Financial Insights, adding that Thailand is one of the most promising markets for mobile payments in Asia.

Thailand’s cashless payments grew by 20 percent on average during 2010 to 2015, the fourth fastest growth behind China, India and Indonesia and ahead of Malaysia and Singapore, both at 9 percent. MCT

The W

Business

A6 Wednesday, January 13, 2016 | Editor: Lyn Resurreccion

Food, supplies reach besieged Syrian towns

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EIRUT—Trucks carrying food and other desperately needed supplies began entering a trio of besieged Syrian towns on Monday, averting what aid officials had warned was a looming humanitarian disaster.

PROGOVERNMENT Syrian student Hani Ali Hassan (left), 19, and his mother Khadijah Sheikh Haidar, who were evacuated from the besieged Syrian village of Foua, speak during an interview with the Associated Press in a hospital, south of Beirut, run by the militant Hezbollah group. Progovernment Syrian fighters who were recently evacuated from two besieged Shiite villages in northern Syria say residents there live under harsh human conditions where people can hardly find medicine or even food to eat, making some rely on grass in order to survive.

AP/HASSAN AMMAR

The aid shipments, which were organized by the International Committee of the Red Cross (ICRC), the Syrian Red Crescent and the United Nations, arrived late on Monday in Madaya, an oppositionheld town northwest of Damascus that has been besieged by progovernment forces for months, amid reports of starvation.

As many as 42,000 inhabitants of Madaya have been trapped with limited access to food and medicine, according to humanitarian groups, leading to elevated levels of malnutrition.

Reports from local aid agencies have indicated that at least 50 people have died from starvation and a lack of medical care in Madaya, according to a statement on Monday from eight international humanitarian organizations.

T he assist a nce to Mad aya marked the culmination of complex negotiations that also allowed aid convoys on Monday to enter Fouaa and K af raya, progovernment towns in Idlib province, some 180 miles north of Damascus, the capital.

The two northern towns, home to more than 20,000 people, predominantly Shiite Muslims, have been cut off for more than two years by armed opposition g roups, i nc lud i ng t he Nusra

Front, the official al-Qaeda affiliate in Syria. Shiites are viewed as apostates by al-Qaeda and other Sunni Islamist factions that dominate the armed opposition in Syria.

Four trucks bearing aid had cleared the last government checkpoint outside Madaya and were in the town on Monday, Pawel Krzysiek, spokesman for the Syrian delegation of the ICRC, said in a phone interview from the outskirts of Madaya.

An additional 40 trucks were slated to go in, the spokesman said, adding that off-loading operations of 21 trucks had already begun in the northern towns of Fouaa and Kafraya.

“It’s a matter of coordination and synchronization among the different groups,” Krzysiek said, stressing the complexity of an operation that crosses government and rebel lines and involves negotiations with various warring factions.

Apart from food and water, the aid trucks are delivering infant formula, blankets, medicine and surgical equipment to the towns, which are also dealing with cold winter weather, officials said.

The supplies entering the towns are sufficient to feed 60,000 people for one month, the World Food Program said—for 40,000 in Madaya

THIS picture provided by the International Committee of the Red Cross, working alongside the Syrian Arab Red Crescent and the United Nations, shows a convoy containing food, medical items, blankets and other materials being delivered to the town of Madaya in Syria on Monday. The town, about 24 kilometers northwest of Damascus, has been blockaded for months by government troops and the Lebanese militant group Hezbollah. Opposition activists and aid groups have reported several deaths from starvation in recent weeks. ICRC VIA AP

42,000

residents of Madaya town trapped with limited access to food and medicine

and 20,000 in Fouaa and Kafraya.

In a telephone interview, a member of the pro-opposition local council in Madaya confirmed the entry of the aid convoy.

“I’m now inside the Jeep accompanying the first four trucks,” said the opposition official, who goes by a nickname, Ghadeer Zabadani, for security reasons. “People are so happy. It’s as if it’s the last day of Ramadan, [the Islamic month of fasting], and now it’s the time for Eid al-Fitr, [the festival marking the end

of Ramadan].” The trucks, he said, would be off-loaded in warehouses in the area and the goods would be distributed by the local council.

Madaya, a former resort town once famous for its spring water and vibrant market, has been the target of an offensive by the Syrian army and its ally, Hezbollah, the Lebanese Shiite group, aimed at pushing the rebels away from Damascus.

In the last week, however, Madaya has also become a focal point of the fierce information war that has long run parallel to the armed conflict in Syria. Using social media, pro-opposition activists have circulated images of gaunt individuals identified as starving Madaya residents, said to be subsisting on water, grass and even the meat of slaughtered cats.

There was no independent confirmation of the authenticity of the images, which received global media attention. Independent

journalists and monitors generally do not have access to Madaya or other besieged areas. Still, the images from Madaya led to widespread condemnation of Hezbollah, which was accused of enforcing the siege on Madaya in support of the government of Syrian President Bashar al-Assad.

Hezbollah and its supporters, however, blamed the rebels for Madaya’s plight, contending that opposition gunmen had effectively held the town hostage, barring any resident from leaving, and hoarding supplies from last October, when the last aid shipment entered Madaya. Hezbollah and other progovernment groups and media outlets also denounced some of the images of supposedly starving residents of Madaya as fabrications.

The Syrian conflict, now in its fifth year, has seen widespread use of siege tactics by both government and opposition forces. Troops and

Syrian govt ready to attend peace talks in Geneva

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AM ASCUS, Syria—The Syrian government announced on Saturday it is ready to attend peace talks later this month with the opposition in Geneva, as a new airstrike in northern Syria killed and wounded scores of people, including many militants.

But Foreign Minister Walid al-Moallem said Damascus also wants to see lists of the opposition groups who will attend and ensure that “terrorist” groups will not be represented. State news agency Sana said al-Moallem made his comments on Saturday while meeting in Damascus with UN envoy Staffan de Mistura. AlMoallem’s comments came shortly before opposition activists said an airstrike had killed at least 39 and wounded dozens of others.

The Britain-based Syrian Observatory for Human Rights said 39 people were killed, including many fighters from al-Qaida’s affiliate in Syria, the Nusra Front, as well as detainees in the northwestern town of Maaret al-Numan. It said the targeted area included a jail and a courthouse run by Nusra Front.

The Nusra Front is one of the country’s most powerful factions and is opposed to peace talks with the government, saying its aim is to step up an Islamic State (IS) in Syria.

The group is fighting against government forces, the IS group as well as some US-backed rebel factions. Much like its rival, the IS group, the Nusra Front imposes its own vision of Islamic Shariah law in territories it controls—including Islamic courts and prisons.

The Syrian government has been carrying out air strikes for years, which activists say have killed thousands of people. Russia began its own air campaign last September 30 saying its air strikes are meant to weaken the IS and other “terrorists” in Syria.

The Local Coordination Committees, another activist group, said the airstrike killed 51. The group posted a photo on its Facebook page showing several bodies covered with blankets and lined on a pavement. Another showed two dead bearded young men being loaded into an ambulance.

Syria-based activist Hadi Abdallah wrote on his Twitter account that the air raid killed 43 and wounded more than 100, claiming it was carried out by Russian aircraft. The “terrifying massacres was carried out by Russian warplanes,” Abdallah wrote, without saying why he believed they were Russian.

Conf licting casualty figures

are common in the aftermath of air strikes in Syria. The Observatory said the warplanes fired four missiles that hit the Islamic court, which includes a jail, as well as a nearby road linking the court with a market.

De Mistura arrived in Beirut later on Saturday and boarded a plane heading to Qatar, airport officials said in Beirut on condition of anonymity in line with regulations. He arrived in Syria on Friday and earlier this week, he met Syrian opposition officials in Saudi Arabia—a main backer of some of the rebel groups trying to remove President Bashar Assad from power.

A statement on Saturday from De Mistura’s office described his meeting with al-Moallem as “useful” and said the UN envoy is “looking forward to the active participation of all relevant parties” in the upcoming talks. The Syrian government refers to all those battling to overthrow Assad as terrorists and has said the talks should focus on battling terrorism.

The opposition wants Assad to step down as part of any peace deal.

The UN is urging the two sides to meet on January 25 in an effort to end the conflict, which has killed more than 250,000 people and caused a massive refugee crisis. AP

SYRIANS are trying to extinguish fire that was caused by Syrian government aerial bombardment on the Damascus suburb of Douma, Syria, on December 13, 2015. Syrian government helicopter gunships have struck a suburb of the capital, Damascus, a day after air strikes on nearby areas killed more than 40 people, opposition activists said. DOUMA REVOLUTION VIA AP

militiamen from both sides have surrounded, sealed off and bombarded towns, villages and neighborhoods in a bid to force fighters in those areas to capitulate.

Across Syria, according to international aid groups, more than a dozen areas remain in crisis with inhabitants barred from leaving and aid workers blocked from delivering food, medicine, fuel and other essential supplies. Prices for foodstuffs inevitably soar inside those areas, creating a black market for staples.

More than 4.5 million people in Syria now live in such severely troubled or hard-to-reach areas, which face periodic shortages of food and other vital supplies, according to international aid agencies.

On Monday, eight international aid agencies called for all parties in the Syrian conflict to end the sieges of civilian areas and ensure permanent access to humanitarian supplies.

Los Angeles Times/TNS

World

sMirror Landmark fraud trial starts for Spain’s Princess Cristina

SPAIN’S Princess Cristina and her husband Inaki Urdangarin leave a makeshift courtroom on the first day of a corruption trial in Palma de Mallorca, Spain, on Monday. AP/EMILIO MORENATTI

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A L M A DE M A L L ORC A , Spa in—Spa in’s Pr incess Cristina spent 12 hours in court on Monday at the start of her landmark criminal case, confronting accusations of bankrolling a lavish lifestyle with funds her husband received from an alleged scheme to embezzle millions from public contracts for conferences and sporting events.

Cristina and her husband, Inaki Urdangarin, said nothing during the opening of their trial as their lawyers and attorneys for 16 additional defendants argued why their clients should have the charges dropped and made requests about evidence and witnesses for a trial expected to last six months.

One defense lawyer asked to call Spain’s current and former kings as witnesses, and a prosecutor accused him of trying to turn the trial into a reality show. The lead judge in the case ended the proceedings by saying the trial would resume in February—when a final decision will be made as to whether Cristina will remain among the defendants.

The 50-year-old Cristina is the sister of King Felipe VI and faces two counts of tax fraud, carrying a maximum prison sentence of eight years, for allegedly failing to declare taxes on personal expenses paid by a real-estate company she owned with Urdangarin, an Olympic handball medalist turned businessman.

Her lawyer, Jesus Maria Silva, was joined by a prosecutor and a state attorney representing Spanish tax authorities in saying the charges against Cristina should be thrown out because government officials agreed she had committed no crimes and should face at most an administrative fine for tax evasion.

A three-member panel of judges will decide in coming weeks whether to side with Cristina’s supporters or an investigative judge who spent four years probing the case and ruled it could go forward because of evidence presented by a private anticorruption group.

The judges will have to weigh whether the couple criminally abused the Aizoon real-estate consulting firm described in court documents as a “front company” to fund luxury vacations, throw parties at their modernist Barcelona mansion and pay for salsa dancing classes.

Under Spanish law, groups like the Manos Limpias (Clean Hands) organization involved in the princess’s trial can pursue criminal charges against people when authorities decide against doing so. The trial marks the first time that a member of Spain’s royal family has faced criminal charges since the monarchy was restored in 1975. Urdangarin and others face charges of embezzling up to €6.2 million ($6.8 million) from contracts which were allegedly inflated or never performed.

The princess’s husband, formerly

the Duke of Palma, is accused of using his title to land the deals for the Noos Institute he ran with business partner Diego Torres.

Torres’s lawyer, Manuel Gonzalez, renewed a request to call former Spanish King Juan Carlos and his son, King Felipe, as witnesses—presumably to elicit testimony suggesting the business dealings of Noos were condoned or approved by the royal family while Juan Carlos was king until 2014.

The requests for them and other witnesses prompted Pedro Horrach, the prosecutor who wants Cristina fined but cleared of criminal wrongdoing, to accuse Gonzalez of “trying to turn the trial into a reality show.”

Cristina and her husband were stoic as they sat grouped with the other defendants and watched the lengthy exchanges between lawyers and judges. The couple entered court without speaking to reporters under tight security after authorities detained a protester found nearby with an antimonarchy flag.

They left hours after sunset, with the princess appearing to give a slight smile as she departed.

A small group was allowed to protest nearby after the proceedings began—in sharp contrast to the thousands of raucous antimonarchy protesters who tried to make enough noise outside a courthouse to drown out Cristina’s testimony behind closed doors in 2014 for the investigative judge. For Monday’s proceedings, there were so many defendants, lawyers and reporters that judicial officials moved the trial from a courthouse to a sprawling complex on the outskirts of Palma de Mallorca normally used for public servant training courses.

The case is being heard in the regional capital of Spain’s Balearic Islands, because many of Urdangarin’s business deals under investigation were for the islands.

Cristina denied knowledge of her husband’s activities during the 2014 closed-door court appearance, but the investigative judge decided she could be tried for tax fraud in 2007 and 2008.

Details about the couple’s regal lifestyle that emerged from the pretrial investigation from 2011 to 2014 outraged Spaniards, as the country teetered on the edge of an economic crisis and the unemployment rate hit 27 percent. The case deeply damaged the reputation of Juan Carlos—already smarting from a backlash after he broke his hip during a 2012 elephanthunting trip seen as an extreme example of royal excess. He abdicated in 2014, saying Spain needed fresh-royal blood. On taking the throne, Felipe pledged to restore public trust in Spain’s monarchy.

He later stripped Cristina and her older sister Princess Elena of their roles as official members of the royal family though they have not given up their slots of succession in line for the throne. AP

news@businessmirror.com.ph | Wednesday, January 13, 2016

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A MAN takes a nap at a quiet trading hall of a brokerage house in Beijing on Tuesday. Chinese stocks seesawed as worries lingered over the country’s financial markets and economic outlook, fueling volatility in other Asian benchmarks. AP/ANDY WONG

China’s resilient shoppers face fresh test from market headwinds

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HINA’S consumers, having shrugged off stock-market turmoil last year, face fresh headwinds as shares sink anew, the yuan weakens and the economy grinds lower.

The willingness of shoppers to keep opening their wallets through the market’s ups and downs—as they did in 2015—will be key to whether the world’s second-largest economy avoids the kind of hardlanding scenario keeping global markets on edge.

Supporting China’s consumption story: it’s a too-big-to-fail pillar in President Xi Jinping’s remodeling of the economy away from over-reliance on exports and investment, prompting policies to boost spending. With the market hiccup set to drag on the financial sector’s contribution to growth and traditional industries f lagging, the importance of China’s famously frugal consumers to the nation’s growth outlook is on the rise.

“The bottom line is that it can shake off this episode,” said Andrew Polk, an economist with the Conference Board in Beijing. “In an era of economic volatility, it’s likely that with an already highsavings rate China’s consumers are going to be relatively more even keeled than other parts of the economy because they have that large cushion.”

Their importance is already on the rise: The contribution of total consumer spending to GDP rose to 58.4 percent in the first three quarters of last year, up from 50.2 percent in 2014, according to IHS Global Insight. China is poised to add 27 trillion yuan ($4.1 trillion) in new consumption over the next decade, exceeding the 23 trillion yuan added in the previous 25 years, even as economic growth averages only 4 percent annually, Polk said.

Stocks slump

THE Shanghai Composite Index has declined 15 percent so far this year. It slumped 7.3 percent in June; 14 percent in July; 12 percent in August; and another 4.8 percent in September, yet retail sales growth actually quickened in the second half of last year.

One reason for optimism consumption will again shrug off the stock market’s early 2016 slide is the room for policy action to boost spending. High-import tariffs on foreign goods, a value added tax and capped rates on savings deposit all have repressed consumption, while rudimentary pension

58.4% increase of total consumer spending to GDP in 2015

and health-care coverage force precautionary savings for old age.

Policy action on such fronts is changing that.

Lagging consumption

EVEN after rapid expansion in the past decade, average Chinese household consumption is still lower than in Thailand and Malaysia, and far behind South Korea, according to Alicia Garcia Herrero, chief Asia Pacific economist at Natixis SA in Hong Kong.

“This is due to financial repression through a capped deposit rate, high value-added tax and import tariffs for consumer goods,” she said in a December report. “These variables have now changed.”

Tax cuts, deregulation of service sectors, price reforms in utilities, the streamlining of administrative approvals for business and increased coverage and spending on the social safety net will all help boost consumption growth, said Wang Tao, chief China economist at UBS Group AG in Hong Kong.

Relaxation of the one-child policy and loosening the household-registration system that limits worker movement and the social benefits they receive will provide further

boosts, she says. China also has lowered sales tax on small cars, which may spur faster growth in retail sales, according to a report

by Bloomberg Intelligence.

Millennial spending

CHINA’S millennial consumers, ranging from age 15 to 35, are another source of potential, their consumption habits far removed from that of their more frugal parents and grandparents. “ T he real balance between spending and saving will be shaped

by China’s 414 million millennials,” said Stephen Roach, a senior fellow at Yale University and former Morgan Stanley nonexecutive chairman in Asia, in a Bloomberg television interview last month.

“To the extent that they are going to be shaping the consumption, savings decisions in the next China, watch out! Because again they are nonconforming, they are breaking the mold right now.”

With Xi vowing to step up efforts to rein in excess industrial capacity, the risk is that a prolonged stock market rout weighs on consumption. And unless policy-makers can then find ways to prompt China’s shoppers to keep opening their wallets wider, Xi’s target of at least 6.5-percent annual average growth through 2020 may be jeopardized.

“Any significant slowdown in consumption growth would act as a further drag on the pace of Chinese GDP growth and could risk pushing China into a hard landing,” said Rajiv Biswas, Asia-Pacific chief economist at IHS in Singapore. Bloomberg News

Brazil’s artisanal miners seek diamonds at abandoned mine

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REINHA, Brazil—Far into the heart of Brazil’s Minas Gerais state, rural miners explore the massive craters left behind by giant mining companies in search of diamonds. Associated Press photographer Felipe Dana created a collection of images about the artisanal miners and their craft as a work project for the 2015 World Press Photo Latin America masterclass held in Mexico City last December.

The area that Dana documented has been explored for the precious stone since the time of slavery. Up to a few years ago, multinational mining companies extracted the stone without concern for the land or the Jequitinhonha River crossing the region. Today the devastated area known as Areinha is a no man’s land where small groups of rural miners try their luck with

artisan techniques, using wooden knives, metal pans, large water pumps and no infrastructure. In hopes of sparing the river any more damage, men and women searching for diamonds work around the riverbed as they try to legalize their mining activities with authorities. Locals estimate there are hundreds of people across the region digging for diamonds in groups of 10 or less. They live in wooden huts without electricity and bathe with water in buckets, barely surviving without a stable income but on rare occasions enjoying a windfall of tens of thousands of dollars.

During the weeks-long mining process, the group excavates the soil down to a layer of gravel of up to 50 meters deep. Rocks are extracted with the help of small pumps powered by old-truck engines. The miners then use their hands to go through the rocks. AP

ARTISANAL miners separate gravel with sieves as they search for diamonds at an abandoned mine in Areinha, Minas Gerais state, Brazil. During the weeks-long mining process, the group excavates the soil down to a layer of gravel of up to 50 meters deep. AP/FELIPE DANA

The World BusinessMirror

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Editor: Lyn Resurreccion • news@businessmirror.com.ph

AFTER BOMB TEST

House moves on NoKor sanctions bill

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ASHINGTON—The US House of Representatives pushed ahead on legislation that seeks to punish North Korea for its latest nuclear test by expanding sanctions on Pyongyang, a move with strong bipartisan support despite questions over how effective the new restrictions can be.

Lawmakers are scheduled to vote on Tuesday on the North Korea Sanctions Enforcement Act, which proposes to deny North Korea the hard currency they say it needs for its weapons programs. Holding the vote on Tuesday puts it on the same day as President Barack Obama’s final State of the Union address.

But former State Department officials said any new sanctions won’t have teeth unless China makes a major shift in policy toward its rebellious ally.

Separately, a panel of experts on North Korea said existing United Nations sanctions against the reclusive country are going unenforced.

The House bill is sponsored

by Rep. Ed Royce, the Republican chairman of the House Foreign Aff airs Committee. The new sanctions would put “targeted economic fi nancial pressure” on North Korean leader Kim Jong Un, Royce said on Monday ahead of the vote, arguing that a failure to respond aggressively will embolden Pyongyang.

Rep. Eliot Engel, the committee’s top Democrat, said Kim is on a “dangerous, destabilizing course” and the US needs to act unilaterally to show the North

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HOUSE Foreign Affairs Committee Chairman Rep. Ed Royce (left), Republican-California, talks with the committee’s ranking member Rep. Eliot Engel, Democrat-New York, on Capitol Hill in Washington. The House is poised to pass legislation that seeks to expand sanctions on North Korea. AP/MANUEL BALCE CENETA

Nuclear tests conducted by North Korea, the latest was hydrogen bomb Koreans that “there are consequences for their actions.”

Royce’s committee unanimously approved the measure in February 2015 and it remained there until last week when North Korea announced it had conducted a fourth nuclear test—this one detonating a thermonuclear device with massive destructive power.

The announcement was met with doubt that North Korea had set off a hydrogen bomb, which would mark a major technological advance for Pyongyang’s limited nuclear arsenal.

But it could take weeks or even longer to confirm or refute the claim.

Yet, lawmakers are pushing ahead.

In the wake of the announcement, Republicans derided the Obama administration for not being more forceful in its policy toward North Korea. Royce said the administration’s approach of “strategic patience” toward North Korea has

failed to stop its nuclear program.

It’s uncertain what the bill’s prospects will be in the Senate if it’s passed by the House.

But Sen. Bob Corker, the Republican chairman of the Senate Foreign Relations Committee, said he wants the US and its allies “to take a more assertive role in addressing North Korea’s provocation.”

A central part of Royce’s legislation is to make so-called blocking sanctions mandatory rather than discretionary as currently permitted through existing regulations.

The sanctions are mandated against any country, business or individual, that materially contributes to North Korea’s nuclear and ballistic missile development, imports luxury goods into North Korea, or engages with Pyongyang in money laundering, the manufacture of counterfeit goods, or narcotics trafficking, according to the legislation.

A similar tactic was used by the Treasury Department a decade ago, Royce said, and it drained North Korea of the hard currency essential for buying the parts and

supplies necessary for weapons development and missile production. Nor did Pyongyang have enough money to pay its army or police forces.

But Joseph DeThomas, a former senior State Department official who advised on Iran and North Korea sanctions policy until February 2013, said new sanctions wouldn’t force change in Pyongyang, unless China is convinced of the strategic consequence of North Korea having nuclear weapons that could threaten America. AP

HOLDING AMERICAN Clinton, Sanders in tight race in Iowa N.ONKOREA ESPIONAGE CHARGES W N

ATERLOO, Iowa—Hillary Clinton has spent much of her presidential campaign looking past Democratic rival Bernie Sanders, focusing instead on Republicans and the November general election. No longer.

Three weeks before the lead-off Iowa caucuses on February 1 and with polls suggesting a tightening race, she is now confronting the Vermont senator more directly, attempting to undermine his liberal credentials on gun control, health care and even the Wall Street regulations that have been the core of his insurgent campaign.

“It’s time for us to have the kind of spirited debate that you deserve us to have,” Clinton told voters on Monday. “We do have differences.”

After months with a comfortable edge in most Iowa polls, the former secretary of state finds herself battling an underdog rival in a state that has a history of rewarding antiestablishment campaigns—a situation that brings back echoes of her 2008 loss to Barack Obama in the Midwestern state.

At a forum aimed at young and minority voters on Monday night, the candidates found themselves defending their positions on immigration, criminal justice, gun control and abortion—along with tackling questions about selfies, white privilege and recently deceased rock star David Bowie.

“The inevitable candidate for the Democratic nomination may not be so inevitable today,” Sanders said, when asked about his standing in Iowa.

While Clinton has locked up the vast majority of support from party leaders and large donors, Sanders has captured the hearts of many in the Democratic base with his unapologetically liberal economic message.

An NBC/Wall Street Journal/

DEMOCRATIC presidential candidate Hillary Clinton reaches for a smartphone for a selfie with a supporter after a campaign rally on Monday in Waterloo, Iowa. AP/JAE C. HONG

Marist poll released on Sunday found Clinton with 48 percent and Sanders with 45 percent of likely Iowa caucus goers, representing a closer margin than past polls have indicated.

Sanders has maintained an edge in New Hampshire, which neighbors his home state of Vermont, making Iowa even more important for Clinton. The NBC/Wall Street Journal/ Marist poll showed Sanders with 50 percent and Clinton with 46 percent in that primary which takes place on February 9.

Clinton still holds a strong advantage among black and Latino voters who play a bigger role in the primaries in late February and March. But even if Clinton pulls out a win in Iowa, a narrow victory could set off alarms among Democrats about her strength against Sanders, who started the campaign as an obscure senator polling in the single digits.

Until now, Clinton has rarely mentioned Sanders by name at her campaign events, choosing instead to warn voters about the risks of electing a Republican. She has pointed

to efforts by Republicans to repeal Obama’s signature health-care law— the president vetoed the most recent try—as a sign of what could come if Democrats lose the White House.

But on Monday she widened her health-care critique to include Sanders, saying he would “rip up” the law and put power in the hands of states.

Sanders said during a town hall meeting in Perry, Iowa, that many people have inadequate coverage and must pay large fees to cover medical expenses before payments from private insurers kick in. Sanders advocates a system in which medical claims would be paid out by the government as it does with the Medicare program covering seniors.

Clinton also announced a new plan that would impose a 4-percent fee on taxpayers making more than $5 million—an effort to match Sanders’s focus on income inequality—even as she charged him with plans to raise taxes on middle-class Americans. She joined her rivals in denouncing the Obama administration’s recent deportation raids targeting

Central Americans who had entered the country illegally.

And she talked about guns.

When Obama said last week he would not support a Democratic nominee who didn’t support “common-sense gun reform,” Clinton’s team quickly sought to turn it to their advantage, reminding voters that Sanders had backed legislation in 2005 that protected gun makers from lawsuits.

Clinton—who’s done only a select few national interviews since announcing her campaign in April— called in to MSNBC’s Hardball on Friday night, invoking Sanders name six times during a short interview to criticize his vote on liability for gunmakers and his past opposition to other gun control legislation.

Sanders, during a town hall meeting in Des Moines, expressed his own support for Obama’s use of executive actions to curb gun violence, suggesting little daylight between him and the president.

Sanders has long targeted Iowa and New Hampshire as places where he could trip up Clinton, who started the campaign with a commanding lead in national polls but has watched her advantage in the early voting states diminish. The senator has also pointed to favorable polls showing him outperforming Clinton in hypothetical matchups against Republicans like billionaire Donald Trump.

Sanders has held multiple events in the state since Friday. Clinton was back in Iowa after a two-day trip to the state last week, but has also held fundraisers in California and plans to keep a lower profi le later this week with closed fundraisers in Washington and New York.

Former President Bill Clinton returns this week, accompanied on Saturday by the couple’s daughter, Chelsea. AP

ORTH Korea claims it is holding a naturalized US citizen on suspicion of spying for South Korea, CNN reported on Monday.

If confirmed, the man would be one of several Americans detained in recent years by the reclusive communist state.

The State Department declined to comment on the report, explaining in an e-mail that “speaking publicly about specific purported cases of detained Americans can complicate our tireless efforts to secure their freedom.”

The news comes at a time of heightened tension on the Korean peninsula and appeared designed to put pressure on the United States and its allies, which are seeking to increase international sanctions on the government of Kim Jong Un over its claims to have carried out its fourth nuclear test last week.

North Korean authorities allowed a CNN reporter to interview the purported American detainee, identified as Kim Dong-chul, 62, at a hotel in the capital, Pyongyang. Officials insisted that the conversation take place in Korean, through an official interpreter, but the network said it later verified the translation.

Kim told the network that he lived in Fairfax, Virginia, but moved in 2001 to the Chinese city of Yanji, near North Korea. From there, he said he would commute daily to a special economic zone in the North Korean city of Rason, where he established a company dealing in international trade and hotel services.

Kim said he started spying in 2013 on behalf of “South Korean conservative elements” who “injected me with a hatred toward North Korea.”

Asked to describe how that worked, he said he bribed a local resident to collect sensitive information about the country’s military and nuclear program, and then smuggled it in his car to China or South Korea.

Kim said he was arrested last October while meeting a former North Korean soldier to collect a USB memory stick and a

camera used to gather military secrets. The former soldier was also detained, he said, but Kim did not know his fate.

“I’m asking the US or South Korean government to rescue me,” he told CNN. The network said it was shown what appeared to be an American passport issued in Kim’s name and published a photograph of the document.

Kim told CNN that he has a wife and two daughters in China. But attempts to reach them using a phone number he provided were unsuccessful, the network said.

The last two Americans known to have been detained in North Korea were released in November 2014 after the Obama administration sent the director of national intelligence, James R. Clapper, on a secret mission to the country.

Matthew Todd Miller, a Californian from Bakersfield, was arrested in April that year and sentenced to six years of hard labor on charges of entering the country illegally and trying to commit an act of espionage.

Kenneth Bae, an evangelist from Lynnwood, Washington, had been in custody since 2012 and was serving 15 years with hard labor for “hostile acts against the state.”

CNN was also given access to a South Korean-born Canadian pastor, the Rev. Lim Hyeon-soo, who was sentenced last December to life in prison with hard labor on charges of using religion to try to destroy the North Korean system of government.

“I used to think they deified their leaders too much, but as I read the memoirs of both Kim Il-sung and Kim Jong-Il, they never called themselves gods,” Lim told CNN on Saturday.

Family members and colleagues have said that Lim traveled frequently to North Korea, where he supported a nursing home, nursery and orphanage. But they said the trips did not have a political objective.

Lim told CNN that he was being held at a labor camp, where he works alone eight hours a day, six days a week, digging holes to plant apple trees. Los Angeles Times/TNS

The World BusinessMirror

news@businessmirror.com.ph

briefs

CLINTON URGES WHITE HOUSE: STOP DEPORTATION RAIDS

DES MOINES, Iowa—Hillary Clinton is calling on the Obama administration to end raids aimed at deporting Central Americans who entered the United States illegally.

Clinton says the holiday-season roundups were “mass deportations” that are sowing “division and fear.” She says she would ensure government lawyers for all unaccompanied minors and increase funding for immigration courts.

Clinton is promising to “do everything possible to provide due process.” She was speaking at a Democratic forum aimed at young and minority voters.

Latino leaders, along with Clinton’s primary rivals, have criticized the administration, calling on the president to immediately stop the operations. The White House says the raids reflected the administration’s top priorities for deportation—people with criminal convictions and people caught crossing the border illegally. AP

FORMER CHINESE VICE MINISTER JAILED FOR 15 YRS FOR BRIBERY BEIJING—A court in northern China sentenced a former vice minister of public security to 15 years in jail on Tuesday for accepting bribes, state media reported.

Li Dongsheng is the latest senior figure to fall in President Xi Jinping’s anticorruption crackdown that has targeted scores of high-level officials, including figures linked to China’s former state security chief, Zhou Yongkang. Zhou, the biggest tiger to fall, was once seen as a potent rival of Xi and was at the center of a vast patronage system from his various positions of power.

Li was sentenced by a court in Tianjin city, the official Xinhua News Agency reported. Calls to the court rang unanswered.

Li helped others get benefits from 1996 to 2013 when he held positions including the vice minister in the Ministry of Public Security and the deputy head of state broadcaster China Central Television, Xinhua said. He also demanded and received bribes worth 22 million yuan ($3.4 million) from 2008 to 2013, Xinhua said. AP

PUTIN: TOO EARLY TO SPEAK ABOUT ASYLUM FOR ASSAD IN RUSSIA

Wednesday, January 13, 2016

Iran expects end of sanctions in days

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ANCTIONS against Iran will end in “days,” and the coming year will be one of “economic revival,” Iranian President Hassan Rouhani said.

“In a few days, we will see the end of the cruel sanctions against Iran,” Rouhani said on Monday in a speech to open natural-gas facilities in the south of the country. “When sanctions end, I will explain to people how great of an accomplishment this is.”

Iran secured a nuclear deal with world powers last July to end the country’s political and economic isolation. The formal implementation of the accord will lift financial and oil sanctions and allow the return of foreign investors, providing Rouhani’s government with an opportunity to stimulate a turnaround at a time when state revenue has been hit by low crude prices.

The nuclear accord is “days away from implementation,” US Secretary of State John Kerry said on January 7. Speaking at a news conference in Prague on Monday, the European Union’s (EU) foreign policy chief Federica Mogherini said she expects “the day to come rather soon.”

EU, US, and United Nations sanctions on Iran are scheduled to be lifted as soon as the International Atomic Energy Agency (IAEA) verifies that Iran has met the terms of the accord. Four IAEA envoys said last December that may happen around the middle of this month.

Meeting one of its obligations under the agreement, Iran has removed the core of the Arak nuclear reactor and filled it with cement on Monday, an unidentified Iranian official was cited as saying by the Fars News Agency.

The IAEA, the United Nations nuclear watchdog, will confirm the action in a report in the next few

$30 IRAN’S Ambassador to the International Atomic Energy Agency (IAEA) Reza Najafi waits for the start of the IAEA board of governors meeting at the International Center in Vienna, Austria, last December 15. AP/RONALD ZAK

Price of a barrel of oil days, it said.

Iranian Foreign Minister Mohammad Javad Zarif and Mogherini will issue a joint statement once the IAEA’s confirms Iran’s full compliance with the deal, the person told Fars without specifying a date.

Rouhani has focused his presidency, which began in 2013, on ending a more than decade-long nuclear standoff with the West and on creating jobs for young Iranians. The government will keep its promises even with oil prices falling to as low as $30 a barrel and despite the existence of “plots,” he said in the speech, without elaborating.

“Even in these circumstances, we have managed to control inflation and despite all difficulties we will have economic growth this year,” Rouhani said. “Next year will

be the year of economic revival,” he said, referring to the Iranian New Year which begins on March 21.

Meanwhile, Iran has rejected an assessment by the UN nuclear agency that it did past work on nuclear arms but is praising some aspects of the agency’s investigation of the issue, reflecting satisfaction that the more than decade-long probe has ended.

Closure of the file means that some questions about the alleged weapons work may never be resolved. Before the 35-nation board of the UN’s IAEA adopted a resolution last month ending the investigation, IAEA chief Yukiya Amano told the meeting that his investigation couldn’t “reconstruct all the details of activities conducted

by Iran in the past.”

But both Iran and the international community are eager to put the issue behind them, in order to

be able to implement a landmark nuclear deal that commits Tehran to significant limits on its nuclear activities for over a decade, in exchange for relief from crippling economic sanctions.

A probe had to be formally ended as part of the July 14 nuclear agreement. The IAEA board closed the books on the investigation last month, even though Amano repeated an assessment he made in his final report on the issue last November that Iran worked on “a range of activities relevant” to making nuclear weapons, with coordinated efforts up to 2003 tapering off into scattered activities into 2009.

Iran’s rejoinder, dated January 7 and posted on the IAEA’s web site, will neither affect Amano’s finding nor delay implementation of the deal, but its low-key language in disagreement with the

agency assessment is in contrast to past bitter recriminations both against the IAEA and against the US, which has been among Tehran’s most vehement critics for its alleged past weapons work.

The Iranian note rejected Amano’s assessment that an “organizational structure” worked on nuclear arms. It also said that any Iranian interest in “dual-use technologies have always been for peaceful civilian or conventional military uses” and not to develop an atomic bomb.

The communication repeated arguments Iran has used for years—that documents playing a role in the agency’s conclusions were forged by Iran’s adversaries.

At the same time, it praised the “tremendous work” not only by Iranian and but also agency officials that led to the IAEA final report and an end to the probe. Bloomberg News/AP

FIRST FEDERAL RULES FOR OFFSHORE FISH FARMING ISSUED

MOSCOW—Russian President Vladimir Putin says it is too early to speak about granting political asylum to Syrian President Bashar al-Assad, a Putin ally and arguably the main obstacle in the Syrian peace process.

Russia began carrying out air strikes on the positions of Islamic State fighters last September in support of Assad’s army.

Putin said in an interview with the German daily Bild published on Tuesday that Moscow is advocating for a constitutional reform in Syria and if the next election is democratic, “Assad won’t have to go anywhere,” even if he does not win it.

Russia, the United States and the Middle East nations are promoting talks between the Syrian government and opposition, and Assad has been seen as a highly divisive figure. AP

INDIA SENTENCES CREW OF U.S.OWNED SHIP TO 5 YEARS IN JAIL NEW DELHI—A news report says an Indian court has sentenced the crew of an American-owned ship to five years in prison for illegally entering Indian waters while carrying weapons and ammunition.

In its report late on Monday, the Press Trust of India (PTI) news agency said the 35-member crew includes British, Ukrainian and Estonian nationals, as well as 12 Indians.

The MV Seaman Guard Ohio was intercepted in October 2013 by India’s coast guard off the southern state of Tamil Nadu, and the crew was arrested.

PTI said the crew has been out on bail since March 2014. The men can appeal the sentence.

The ship is owned by Virginia-based security company AdvanFort, but is registered in Sierra Leone. AdvanFort denies the charges. AP

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BIGEYE tuna line the floor of the United Fishing Agency’s auction house in Honolulu. AP/EUGENE TANNER

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EW ORLEANS—The firstever federal regulations for large-scale fish farming in the ocean were issued on Monday, opening a new frontier in the harvesting of popular seafood species, such as red drum, tuna and red snapper.

The new rules allow the farming of fish in federal waters of the Gulf of Mexico. The rules— in the making for years—were announced in New Orleans by the National Oceanic and Atmospheric

Administration (NOAA).

NOAA Administrator Kathryn Sullivan said the Gulf rules could spur similar rules in other US waters. She said it was time for the United States to open up this new market, which, she said, could help the US meet its seafood demands.

Fish farming is contentious, with fishermen and environmentalists warning it could harm the marine environment and put fishermen out of work.

Typically, offshore farming is

done by breeding fish in large semisubmersible pens moored to the seafloor. The practice is common in many parts of the world, and Sullivan said the United States has fallen behind. About 90 percent of the seafood consumed in the United States is imported and more than half of that is farmed, she noted.

She said expanding fish farming has numerous benefits.

“It’s good for the balance of trade, it’s good for the food security of the country,” she said. She added

that it could create jobs, too.

The new rules allow up to 20 fish farms to open in the Gulf and produce 64 million pounds of fish a year. The farms can start applying for 10-year permits starting in February, she said.

Sullivan said the fish farms would be kept away from sensitive habitats and fishermen would be allowed to fish near them. She envisioned little competition between the farms and fishermen.

Neil Sims, the president of the

Ocean Stewards Institute, an offshore industry group, said the rules were groundbreaking. “It’s a huge step,” Sims said. “It’s the federal government recognizing we must move forward here.”

He said concerns about fish farming causing environmental problems are unfounded. “The beauty of open ocean aquaculture is that you are in deep water far offshore,” he said. “It’s more akin to a Colorado cattle range than a feedlot.”

Rather than import farmed seafood, he said, the nation would be better off producing more of its own.

“We have no idea how it [imported seafood] is farmed, what the environmental standards are, what the animal welfare standards,” Sims said about imports.

Marianne Cufone, executive director of the New Orleans-based Recirculating Farms Coalition and longtime critic of offshore fish farming, warned of polluting the Gulf and hurting wild stocks.

A concern is that domesticated fish—bred to be larger—will escape their pens and outcompete wild fish for habitat and food, she said.

Sims dismissed that argument.

“Over time, we will indeed select for fatter, slower, more docile individuals,” Sims said. “But then that domesticated animal is going to be hopeless in the wild. A fat, slow, docile, fish outside of a net pen is called bait.”

Sullivan said concerns about escaped farmed fish are real, but she added that the rules require growers to breed fish with the same genetics as local stocks.

Glen Brooks, the president of the Gulf Fishermen’s Association, a group of commercial fishermen, said fishermen fought against fish farming. He said fishermen worry about losing fishing grounds and the potential for farmed fish to escape and hurt wild stocks or cause outbreaks of disease. AP

A10 Wednesday, January 13, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Thoughts on the entertainment industry

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S we sympathize with those left behind by the entertainment master German “Kuya Germs” Moreno, we cannot help wondering how life is with the rest of the Philippine motion picture and television world.

We are not referring to the stars and superstars: they are making the biggest money in Philippine society. Rather, we are referring to the rest of them, from the supporting actors and actresses to those handling the lights, cables and microphones, the rank and file, who, we understand, are surviving on slightly more than the minimum wage.

We begin by endorsing the idea that the Metro Manila Film Festival (MMFF) executive committee makes an accounting of the financial results of the activity. They owe it to the Metro Manila governments who supported the festival and the people who patronized it. Observers say that the festival grossed more than a billion pesos. The MMFF can begin telling us what exactly they intend to do with the money they have earned.

There is currently an existing a Movie Workers Welfare Foundation Inc. (Mowelfund) Welfare Fund, a private-sector initiative of some of the leading personalities and companies of the business. From what is known about it, the Mowelfund extends assistance to those of the industry who are in dire need, as in terminal illnesses. But the support is inadequate, barely able to meet minimum obligations.

To the MMFF, what about starting a new program with expanded objectives, like providing in-between-jobs assistance, or short-term unemployment benefits, or training sustenance to low-level people of the industry? The idea is not to substitute for employment, but to fill a gap in employment or improve productivity through upgrading of existing skills or acquisition of new ones.

Another activity will be the modernization of the industry, from the establishment of a new culture to the purchase of high-tech equipment. Establishing a new culture will involve such things as paying well for intelligent stories and scripts instead of relying on improvisations; improving the acting through specialized training; and getting rid of slapstick and facial contortions that substitute for jokes. In a word, it will involve raising the level of literacy of our motion pictures.

The purchase of new equipment to replace the current paraphernalia of vintage biblical times is an absolute necessity. The lights and sounds equipment being used are so obsolete they hurt the eyes and ears of viewers. Now that a comparison of Philippine movies with movies of various foreign countries shown on Philippine television has become possible, we can see the embarrassing and shameful technical inferiority of Philippine movies. Are we wondering why even Korean movies and telenovelas have become popular with Philippine audiences?

Let’s convert this mourning for an adored and respected entertainment master into a commitment to improved levels of welfare for the rank and file in the industry, to superior dramatic performance, and to the technological advancement of the industry. Let’s make this an opportunity to transform the entertainment industry into one we can be proud of.

New Year’s resolutions Susie G. Bugante

All About Social Security

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HE onset of a new year is a time of fresh beginnings, with a clean slate waiting to be filled with exciting feats and personal milestones for the next 12 months. New—or admittedly neglected, but now renewed—commitments to lose weight, quit smoking, sleep early, go to the gym, spend more time with family, learn a new skill and travel more are often just some of the usual resolutions that are prompted by the start of another year.

Saving more and paying off debts, which are also among the classic examples New Year’s resolutions, would be ideal for Social Security System (SSS) members to give them and their loved ones peace of mind and financial support over the long term.

Save more

EMPLOYEES, self-employed individuals and voluntary members, including overseas Filipino workers (OFWs) are encouraged to build up their savings for retirement and future contingencies through an active SSS membership.

On top of their regular remittances for SSS contributions, members are urged to further expand their savings by enrolling in the

SSS Personal Equity Savings Option (Peso) Fund, a voluntary provident fund and pension plan introduced by the SSS last year. OFW members have their own version of this savings facility called the SSS FlexiFund Program. It was launched back in 2001 and its success—with over half-a-billion pesos in members’ equity and over 46,000 OFW participants at present—had paved the way for the creation of the SSS Peso Fund Program that caters to local SSS members.

Both SSS programs provide enrolled members a safe haven for their hard-earned income. Their SSS savings generate guaranteed and tax-free earnings, on top of Annual Incentive Benefits that are granted

as a reward for members who maintain their investments under these two SSS programs. Their SSS savings can be released in lump sum or as monthly pension, depending on the members’ preference, at the end of their working years. Part of their funds can also be tapped for other purposes such as medical emergencies, payment of children’s tuition, and as capital for jump-starting their own business.

Pay off debts

SSS loans are offered as a privilege of actively paying members.

However, there are borrowers who are granted this privilege but then abandon their obligation to promptly pay their SSS loans.

Members who fail to pay their loan amortizations on time are charged monthly penalties, as well as continuing interest, and this only leads to ballooning loan obligations as the years roll by.

Members can mistakenly assume that they can get away with paying their delinquent SSS loans, but this would eventually catch up with them by the time they would need to avail themselves of final benefit claims such as retirement and total disability. For example, a member with unpaid loan obligations would have to wait longer before receiving his retirement benefits, as his

monthly SSS pension would be first used for payment of his outstanding loan balance.

Shirking one’s loan obligations can also affect the benefits for the eligible beneficiaries of delinquent SSS loan borrowers, for the SSS also has the option to deduct the overdue loan payments from SSS death and funeral benefits. This 2016 is the perfect time to commit to finally paying that overdue SSS loan.

Borrowers with unpaid amortizations under the SSS Stock Investment Loan Program (SILP) and the Privatization Fund Loan Program (PFLP) are offered the Option to Sell Shares Program. Under this ongoing program, delinquent borrowers can authorize the SSS to sell the member’s shares of stocks that were acquired through the SILP or the PFLP at the prevailing market price. The net proceeds from the sale of shares would then be used as payment for the overdue SSS loan.

For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS Call Center at 920-6446 to 55 which accepts calls from 7 a.m. on Mondays all the way to 7 a.m. on Saturdays.

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

‘Rolling Stone’s exclusive interview comes at too high a price

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T’S hard to argue with any process that led to the capture—recapture, that is—of a billionaire drug lord who has the blood of thousands on his hands. The fact that Joaquin “El Chapo” Guzman is back behind bars, possibly because an actor-playing-journalist led police to his hideout, is an essential first step toward reversing Mexico’s tattered reputation for lawlessness and rampant criminality.

Guzman, a two-time prison escapee, openly mocks the concept of Mexican justice. It’s time for Mexico to swallow its pride and accede to US extradition requests instead of allowing him to continue bribing his way to freedom.

Actor Sean Penn did the quest for justice no favors by employing elaborate evasion techniques to elude authorities and conduct a seven-hour interview with Guzman. Rolling Stone magazine, which published the interview on Saturday, deserves public scorn and outrage for contributing to Guzman’s aggrandizement.

Rolling Stone made a deal with the devil. Editors granted Guzman the right to review and approve the 10,000-word article before it went to press. Reputable journalists simply do not cross this inviolable line, regardless of the justification. The public’s trust is paramount, and readers everywhere must know that they’re receiving an accurate and truthful account of news events.

Of course, Guzman—along with President Barack Obama, Russian President Vladimir Putin and the leader of the Islamic State—would love to have the right to review their quotes and characterizations before articles are published. But the game simply does not, and must not, work that way.

If Penn wants to play journalist, that’s his business. He might consider a few college journalism courses first, particularly one devoted to journalism ethics.

Penn writes that Mexico has “two presidents”—the elected one, Enrique Peña Nieto, and Guzman, the criminal who rules the Mexican countryside by terror. Penn likens him to Robin Hood. The actor offers a few short sentences acknowledging the 27,000 deaths from the war between Guzman’s Sinaloa cartel and rival groups to control Mexico’s northern smuggling routes into the US. The writer also chides Americans

PENN

for providing the drug demand and dollars that feed cartel violence. But he is shockingly uncritical of Guzman, describing him as a “simple man from a simple place” and a doting father who avoids alcohol and never uses the poison he pushes.

Since neither Penn nor Rolling Stone wanted to upset their interview subject with overly harsh words, perhaps we should do it for them: Joaquin Guzman is a mass murderer who would not hesitate to behead law-enforcement officers, torture journalists and use vats of acid to

“disappear” anyone who interferes with his insatiable quest for enrichment. This “simple man” would gladly destroy children’s lives and invoke Mafia-style rule if given the opportunity.

Penn’s sympathetic appraisal recalls his support in previous years of the late Venezuelan dictator Hugo Chavez. Real journalists don’t downplay ugly and inconvenient facts. He and Rolling Stone were played, and paid too high a price to secure a sensational, exclusive interview. TNS

Opinion BusinessMirror

opinion@businessmirror.com.ph

State of Obama’s Union is booming

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Keeping up

B M A. W | Bloomberg View

HEN President Barack Obama was elected in November 2008, the US economy was shrinking at a rate unmatched since World War II. In the seven years between then and his final State of the Union address on Tuesday night, global investors have enjoyed stellar results from the rapidly expanding Obama economy.

Market prosperity has been built on a solid economic foundation. The unemployment rate has declined the most in any five-year period since 1989, from its 10-percent peak in October 2009 to 5 percent last December. The budget deficit as a percentage of gross domestic product has plummeted 7.7 percentage points from a high of 10.1 percent in 2010, the biggest favorable reversal in at least 50 years.

That’s helped propel the value of US companies to half the world’s publicly traded equity for the first time since 2001. The 10 companies with the highest market capitalization are American—the first time that’s happened since Ronald Reagan was president.

Teddy Locsin Jr.

FREE FIRE

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MERICANS held hostage in Iran have won compensation 36 years later, says The New York Times. The American hostages at the US Embassy in Tehran, taken after the USbacked Shah fell, spent 444 days in captivity—and 30 years seeking restitution from their government.

But last year, buried in the huge spending bill signed into law last Christmas are provisions that give each of the 53 hostages or their

estates (meaning they are dead) up to $4.4 million. Victims of other statesponsored terrorist attacks are also eligible. A Marine sergeant, aptly

Wednesday, January 13, 2016 A11

named “Sicmann,” observed that “it has been 36 years, one month, 14 days, until President Obama.”

President Obama is the only American president who got something undeniably good done after the young Bush whupped Afghanistan for 9/11. Obama killed bin Laden instead of just talking about getting it done, like plagiarizing Oliver Stone’s line in his movie Alexander the Great, “You can run but you can’t hide,” which the young Bush did.

The hostages’ legal claims were repeatedly blocked in US courts, including an appeal denied by the US Supreme Court. The US Congress tried but failed to pass laws granting relief. Why? Hostages are embar-

rassing to their government. Every hostage situation, a Filipino general explained during martial law, has two elements: hostages and hostagetakers. You can’t have one without the other, he stressed. So kill ’em all, he concluded.

The Philippine government had the same mind-set in Luneta when hostages and hostage-taker were killed together and when it refused to compensate the families of the SAF 44 because they showed grief instead of relief at the deaths of their husbands and fathers and wouldn’t say thank you to an embarrassed peace panel, which includes a Malaysian national. See, we are just keeping up with the Joneses.

World’s biggest companies by market cap

Source: Bloomberg

US politics remains as politically divided as ever, but the recovery has proved bipartisan. Many states led by Republican governors and legislatures have shown big increases in prosperity measured by job growth, personal income, mortgage delinquencies, tax revenues, home prices and corporate equity, according to data compiled by Bloomberg.

When Obama was elected, the US was losing almost 9 percent of its GDP, the biggest quarterly contraction in well over half a century. The bankruptcy of Lehman Brothers a month earlier pushed the global financial industry into paralysis and General Motors and Chrysler to the brink of insolvency.

Only five US firms were among the world’s 10 largest by market cap, down from nine in 2001. Stocks of American companies made up less than 40 percent of the value of the top 500 global equities, the smallest share in decades, according to Bloomberg data. The US budget deficit exploded from 4.7 percent at the end of 2008 to 10.1 percent of GDP over the next 12 months.

The stock market bottomed in April 2009, when the government was starting to restructure the US auto industry and administer stress tests to determine whether banks could survive another crisis. The ensuing rally added the most points to the Standard & Poor’s (S&P) 500 Index since at least 1927, when Bloomberg started compiling such data. On a percentage basis, the stock market is up 178 percent since March of 2009, the biggest seven-year increase since a comparable rally ended in April 2001.

Obama’s critics are correct to point out that the expansion has been halting and uneven, accompanied by rising inequality, anemic wage growth and underemployment. Growth has been slower than after many previous recessions. It’s significant, though, that the three best-performing industries since March 2009 are consumer discretionary, financial and technology, showing that Americans are borrowing again and have enough spare cash to make Amazon, Alphabet, Apple, Berkshire Hathaway, Facebook, Home Depot, JPMorgan Chase, Walt Disney and Wells Fargo winning investments.

Big and small companies, as measured by the Russell 3000 Index, are growing at an annual rate of 15.5 percent since March 2009 and outperforming the rest of the world by 7.4 percent, according to Bloomberg data. During the 20 years prior to Obama’s presidency, the Russell’s yearly gain was 4.5 percent and it outperformed the rest of the world by 3.9 percent each year.

What’s especially compelling is that US firms are investing in their growth at a record pace. Capital expenditures of the S&P 500 are the most since at least 1990, when Bloomberg began compiling such data, and increased 68 percent since 2010. The only comparable investment spree occurred between 1995 and 2000, when the Internet began transforming US commerce.

American companies also are healthier than they have ever been. The ratio of net debt to earnings before interest, taxes, depreciation and amortization of the S&P 500—the most widely used measure of corporate well-being—improved the most during the Obama presidency and hovers at all-time lows, according to Bloomberg data. The profitability of these companies, measured by trailing 12-month gross margins that show how well they can turn revenue into profit, is rising at the fastest rate compared to global peers since 2006, and they are outperforming their non-US competitors the most since 2001.

Auto sales climbed to a record in 2015, and GM, Ford and Fiat Chrysler are selling more vehicles, are more profitable than their global peers and returning more to their shareholders than they did in 1994, when they had twice their current share of the US market.

The investment boom continues unabated after an estimated 17.6 million Americans gained some form of health-insurance coverage following enactment of the Affordable Care Act in March 2010. Instead of being the economic catastrophe predicted by congressional Republicans, all of whom voted against it, Obamacare proved benign for US business and health-care companies delivered the best total return (income and appreciation) of any industry since October 2013, when the law took effect for most people, according to Bloomberg data.

While their voters remain opposed to Obamacare along with most of the president’s policies, many Republican-dominated states have benefited significantly from the recovery, according to data compiled by Bloomberg. North Dakota, Indiana, Tennessee, Iowa and Utah are among the 14 most-improved states for economic health since 2009. Arizona was the biggest beneficiary of declining mortgage delinquencies while North Dakota, with its shale-oil boom, experienced the biggest increase in home prices and personal income, according to Bloomberg data.

American companies, helped in part by the strongest dollar and the weakest oil prices since the 1990s, were more active as acquirers and sellers of each other in 2015 than at any point during the past decade; $3.2 trillion changed hands, the most mergers and acquisitions since at least 2003, when Bloomberg began compiling such data. At the same time, there were only $33.8 billion of initial public offerings pending, priced or trading last year, the lowest amount since 2009. That may be a sign of untapped potential. If so, the Obama rebound isn’t over just yet.

Next owner of the ‘New Republic’ needs a better vision Megan McArdle

BLOOMBERG VIEW

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EN years ago, Jack Shafer described the life cycle of the new magazine owner, from the birth of a media mogul, shining with hope, through the penny-pinching decline, to the regretful decision to sell the publication to a new sucker, er, aspiring media mogul. Four years ago, Facebook billionaire Chris Hughes bought the New Republic, and gave Shafer a perfect textbook example. Like one of those glorious butterflies that lives only for a day, Hughes dreamed, expanded,contracted and announced the sale in what may be record speed.

Unfortunately, the end of Hughes as media mogul will not simply mean a quietly tasteful memorial service at his fabulous farmhouse. During his brief tenure, the magazine lost most of its old staff, half its Web traffic, and much of what might have interested a potential buyer. Perhaps Hughes has a buyer ready to sign on the dotted line, which would be great news for the staff and for those of us who have read and loved this storied stalwart for decades. But it’s hard to argue that his actions over the last few years have made that outcome likely.

What, after all, is a magazine? It doesn’t own its own printing presses, it has little in the way of marketable intellectual property, and the barriers to entry into our industry are laughably low. In the end, when you buy a magazine, you have a brand, invested with the history and associations of all your years of operation; you have some editors and writers, who may leave at any time; you have an audience that may flee at any time; and you have a culture, created by all the people, past and present, who have worked there over the years.

Hughes effectively destroyed the culture with his abrupt termination-by-

rumor-item of much-loved editor Franklin Foer, which caused a mass exodus of employees. The brand was, to say the least, not enhanced when many of its star alumni severed their contributing editor ties in solidarity. These things caused the audience to fall precipitously.

What he has now is essentially a yearold start-up progressive magazine with middling Web traffic.

To be fair to Hughes, it’s not as if the New Republic’s problems started with him. The magazine, on the losing side of the left’s battles over the Iraq war, had been teetering on the edge for years.

Hughes certainly intended to extend its life; whether he had the opposite effect, we’ll never know.

I’m sure he wanted to make the magazine into something great. But “be something great” is not a sufficient guideline for growing or running a media property. From the outside (I recall), journalism looks dead easy: Just find great stories, write them up, and collect the accolades while sipping fancy cocktails with famous people. From the inside, it turns out to be horribly difficult to acquire a decent audience, much less make money off of them—and often, the

amount of accolade-winning content is inversely proportional to the amount of cash you’ll take in.

As I wrote last year, when the conga line of employees was snaking out the door toward other publications, it was not crazy for Hughes to think that he could develop the magazine into something like The New Yorker for Washington.

It was, however, crazy to think that anyone could make money doing so. And it was even crazier to think that vague visions like The New Yorker for Washington was sufficient guideline for turning the New Republic around.

What Hughes needed was a coherent vision of The-New-Republic-But-a-Little-Different, based on an understanding of the challenges and joys of this industry. And yet in past interviews, he sounds more like someone unconnected with the business, describing a hypothetical publication he might like to subscribe to.

His management of the business, running through three editors in less than four years, doesn’t suggest that there was some sort of deeper, unspoken plan.

It seems, perhaps, he was trying to run a start-up, instead of navigate a turnaround.

A lot of people make this very mistake. Perhaps the most vivid example is then-new President Obama asking why ailing automakers “can’t make a Corolla?”

There’s nothing wrong with that question as a starting point for understanding the differences between US and Japanese automakers. But that’s not how such questions usually get asked. Instead, like The New Yorker for Washington, they usually embed an assumption that an existing firm is one good manager away from turning into a completely different and much more successful entity.

The answer to questions like this is “because they’re not Toyota” (or The New Yorker, or whatever other successful firm you’d like to turn your industry laggard into). The company you’re working with has its own history, its own facilities,

its own people and cultures. And these things tend to be optimized to whatever they’ve been doing, not whatever you think they should have been doing. The offices and plant were built to spec, the people hired and retained to suit prior requirements, the processes customized to the people and plant the company had available. You can no more wave your hand and command them to transform into a different firm than an alchemist could transform lead into gold.

Am I saying that companies can’t bounce back from the brink of extinction? Not at all! Look at something like the incredible turnaround at Porsche, which came close to being sold off for the value of its logo, and came back to be one of the world’s most profitable car companies by implementing lean production models and streamlining its product offerings. But note that Porsche did not start producing Corollas. What it did was get better at what it was already doing: making high-quality, low-production luxury vehicles.

Any turnaround has to start with the assets the company has, and build on them. Otherwise, why go into a turnaround? Just start a new company, where you won’t have to hassle with the old employees, the old ways of doing things, and the old brand associations. A turnaround doesn’t have to keep all of that, by any means—many turnarounds sadly start with mass firings. But there needs to be something that you want to grow, even as you trim away the deadwood and the choking vines.

Hughes seems to have understood this, at first; his early moves were toward a bigger, better version of what the New Republic had been able to put out as its subscribers declined. But at some point —one can only imagine it was when he realized that little political magazines don’t make money—he seems to have decided that he’d rather be running a startup, where there might be more scope for action and profits.

2nd Front Page BusinessMirror

A12 Wednesday, January 13, 2016

www.businessmirror.com.ph

Supreme Court: Edca constitutional

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B J R. S J

HE Supreme Court (SC) on Tuesday voted to uphold the constitutionality of the Enhanced Defense Cooperation Agreement (Edca) between the Philippines and the US governments that was signed in April 2014.

SC Spokesman Theodore Te said 10 ofthe justices declared the agreement constitutional on the ground that Article XVIII, Section 25 of the 1987 Constitution allows the President to enter into an executive agreement on foreign military bases, troops, or facilities as long as it merely intends to implement an existing law or treaty, such as the Mutual Defense Treaty (MDT) and the Visiting Forces Agreement (VFA).

The SC held that, contrary to the claims of the petitioners, Edca is an executive agreement that does not require concurrence of the Senate.

The Court pointed out that the President’s power to enter into executive agreements (different from treaties) not requiring Senate concurrence has been well-recognized

and long upheld by the tribunal.

“The Court ruled that the Edca is not the instrument that allows US ‘troops or facilities’ to enter, as the Visiting Forces Agreement already has done that.... The Edca provides for arrangements to implement the existing treaty allowing entry of foreign military troops of facilities under the VFA and MDT, and, thus, may be in the form of an executive agreement solely within the powers of the President and not requiring Senate concurrence under Article XVIII, Section 25,” the SC said in a ruling penned by Chief Justice Maria Lourdes Sereno.

Those who dissented from the majority opinion were Associate Justices Teresita Leonardo de Castro, Arturo Brion, Marvic Leonen

IN this file photo, USS Boxer (LHD-4), a Wasp-class amphibious assault ship, arrives in Subic Bay to participate in the Philippine-US Bilateral Amphibious Landing Exercise at the Leovigildo Gantioqui Naval Station in San Antonio, Zambales. The ship, which has 1,894 Marines aboard and a complement of 73 offers and 1,009 enlisted men, also carries CH-53 and V-22 Osprey aircraft and is armed with Sea Sparrow missiles and Phalanx close-in weapons system. HENRY EMPEÑO

The Edca provides for arrangements to implement the existing treaty allowing entry of foreign military troops.”—Sereno and Estela Perlas Bernabe, while Associate Justice Francis Jardeleza took no part.

The SC pointed out that it cannot bar the President from choosing an executive agreement over a treaty.

“The President’s choice of an executive agreement to contain the Edca places the burden on respondents to show that it is mere implementation of existing laws and treaties concurred in by the Senate.

On this, the Court found that the burden had been discharged by the respondents,” it added.

The Court junked the two petitions filed by former Senators Rene Saguisag and Wigberto Tañada, and Party-list Reps. Neri Colmenares

and Carlos Zarate of Bayan Muna questioning the legality of Edca.

The petitioners alleged that the administration committed a grave abuse of discretion when it entered into the Edca, as it constitutes a derogation of the country’s dignity and an unconscionable sellout of sovereignty, and that it contravenes the country’s national interests as it is “primarily motivated by the US strategic rebalancing toward Asia and is, therefore, in the service of US security and economic interests.”

They added that contrary to the claim of the respondents, the Edca is “not in implementation or furtherance of the 1951 Mu-

tual Defense Treaty between the two countries and the VFA, and that the country might once again become a staging ground for the deployment of US ships, aircraft and even missile systems overseas because of the prepositioning and the deployment of materiel allowed under the Edca.

The petitioners also said the respondents yielded to the US forces the operational control of agreed location for construction activities and the operational control and defense of these agreed locations.

The government, on the other hand, insisted that the agreement is a valid executive agreement that could stand, even without the concurrence of the Senate.

Under the Edca, the US will be allowed to build structures; store— as well as preposition—weapons, defense supplies and materiel; station troops; civilian personnel and defense contractors; transit and station vehicles, vessels and aircraft for a period of 10 years.

PHL needs ‘CrescentRating’ to lure more Muslim tourists B M T. C

Mindanao Bureau Chief

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AVAO CITY—The Philippines has aspired to be listed in the travel index among Muslim travelers to capture a sizable slice of the rich multitrilliondollar halal market, a Muslim business leader here said.

Those listed in the Global Muslim Travel Index, the world’s leading authority in preferred travel destinations among Muslim tourists, are accorded the “CrescentRating,” an approval mark for a country or place of destination.

The index includes valuations of the halal-certified establishments and accommodations, as well as a conducive environment for Muslim travelers.

Marilou Ampuan, a member of the board of trustees of the Philippine Tourism Congress and the chairman of the halal promotion project here, said being cited in the index would be a crucial achievement for the country. But being specifically mentioned as a preferred destination in the Philippines would mean a better position for this city, she added.

A mpu a n sa id t he cou nt r y may aspire to take a slice of the

$3.2-trillion global halal market from its Asian neighbors with sizable Muslim population.

The Department of Tourism (DOT) has set a target of 50 establishments spread in Luzon (20), Boracay (10), rest of the Visayas (10) and Davao City (10) to be certified soon as halal establishments.

The problem is that its halal certification remains a long shot from being recognized globally, she said, citing problems with assurance of a certified halal practice “from farm to plate.” “There are halalcertified producers of livestock, food and non-food items, but there are more producers that are not halalcertified,” she told a business forum at the SM City mall here.

Aside from the problem with clear sources of raw items for food, certifying bodies in the Philippines also encounter problems with contamination of food with pork and other haram, or prohibited Islamic preparations.

The National Commission on Muslim Filipinos already granted authority to three organizations to be the recognized and accredited halal-certifying body, respectively, for Luzon, the Visayas and Mindanao. For Mindanao, the of-

fice is in Cotabato City.

Ampuan said the Mindanao cer tif y ing body has a lready granted certifications to several business establishments in and around Cotabato City. The DOT here has so far promoted this city as “halalfriendly.” “But there are already some which are ready to be certified here,” she said.

To gain more adherence and following to halal-certification, Ampuan has formed the Davao City Halal Development Council to promote its adoption by accommodation and food establishments, even among fashion and other business ventures.

The council has gathered local and national government agencies to spur wider adoption of the halal practices to help bring in the Muslim tourists here.

“Aside from food and accommodation, we hope that these agencies would be conscious that they should also check on the cosmetics, for example, that they should not contain anything coming from pork,” she added.

The council is chaired by the Mindanao Islamic Chamber of Commerce, a recognized Philippine entity in the Islamic world.