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A broader look at today’s business Monday 18,January 2014 Vol.12, 10 No. 40 Vol. 11 No. 96 Tuesday, 2016
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Senate rushing passage of bill regulating credit-card industry
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HE Senate Committee on Banks and Financial Institutions is ready to submit for plenary vote a committee report on the bill affirming Bangko Sentral ng Pilipinas’s (BSP) regulatory powers over credit-card companies.
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The report is expected to be adopted when the Senate resumes regular sessions on January 19. Banks committee sources confirmed that the report endorsing the credit-card reform bill has been signed by its chairman, Sen. Sergio R. Osmeña III, and will be routed for signatures of other committee members for concurrence prior to submission for final floor vote. Osmeña’s office said the bill states, among others, that the BSP is the “regulatory agency of all creditcard companies.” The provision was adopted in the bill to make that clear to credit firms, a Senate staffer said. C A
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Senate Bill 315 Seeks to set a ceiling on credit-card interest rates and surcharges
China, PHL and the PSE
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CREDITCARD issuers are sure to raise a howl over provisions of a measure that seeks to cap interest rates and charges they can impose. ALYSA SALEN
RENCH writer, general and statesman Charles de Gaulle once said: “China is a big country, inhabited by many Chinese.” That may seem like a silly statement, particularly from a man of his stature. But when you think about it, that may be a most profound statement in terms of clarity to understand China, particularly in the 21st century. Here is a recent “China story”. A 27-story building in Xi’an, in northwestern Shaanxi province, completed on November 15, 2015, was just demolished, “having been left unused for too long.” Now, a few hundred Chinese can go to work clearing the rubble, and probably begin building a new building.
John Mangun
OUTSIDE THE BOX
The big financial story for the latter part of 2015, and certainly in the last week, has been nothing but China. China has devalued its currency to a six-year low. The Chinese stock markets have fallen about 15 percent since before Christmas. China’s
economic-growth estimates for both 2015 and 2016 have been lowered. From Washington to New Delhi and around to Sydney and Tokyo, global stock markets have followed China down, and near-panic is hitting those nations dependent on China as an export market. The Japanese yen has strengthened by over 5 percent against the renminbi yuan, the last thing that Japan needs, as it tries to stop the bleeding from its trade deficit. The US just saw its trade deficit with China fall to a five-year low. That trend just got thrown out the window with the devaluation.
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GOVT TO RECOGNIZE LOCAL HEALERS AS SAFE
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PNP to streamline issuance of chemicals permit B C N. P
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HE Philippine National Police (PNP) said on Monday it will simplify the process of securing permits for regulated chemicals, after businessmen complained of incurring losses due to
tighter government rules. Following a meeting with officials of the Board of Investments in Makati City, PNP Firearms and Explosives Office Head Senior Supt. Elmo Francis O. Sarona said three technical working groups (TWGs), which will streamline the issuance of permits for regulated
PESO EXCHANGE RATES n US 47.0190
chemicals, were created. The PNP also said it is committed to reduce the number of signatories and the days for processing the permits for regulated chemicals. “Following our initial meeting, we’ve agreed to create three technical working groups. The TWGs will
categorize chemicals, streamline processes and accredit logistical transport services,” Sarona said. According to Sarona, the TWGs will help craft a memorandum circular, which will indicate specific rules and metrics for the regulation of what the PNP deemed as
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N the age of technological advancements in the field of medicine, local healers still thrive in the Philippines. These albularyo or hilot, as they are more commonly known, are preferred by Filipinos such as Nenita Cruz who cannot afford professional medical treatment. Cruz, a resident of Pasay C A
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n JAPAN 0.3999 n UK 68.3186 n HK 6.0570 n CHINA 7.1308 n SINGAPORE 32.5978 n AUSTRALIA 32.8230 n EU 51.3730 n SAUDI ARABIA 12.5267
Source: BSP (11 January 2016 )
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Govt to recognize local healers as safe ...
City, still consults her local hilot for herbal medicines. “Mayroon kasing mga pangpahid na doon ko lang nakukuha. Mas gumagaan pakiramdam ko doon,” she said. Several healer groups have been established in the Philippines such as the Association of Traditional Health Aid Givers (ATHAG) Philippines, which actively participates in the community. In November 2015, the organization launched “Bahay Hilot” in cooperation with Museong Pambata. The program aimed to shed light on the ancient art of hilot and traditional Filipino medicine to children in urban areas. In the same month, Assistant Professor Marie-Sol Hidalgo, hilot practice researcher, presented her study on developing a code of ethics for hilot at the 16th Asian Bioethics Conference held at Saint Paul University. The drafting of the National Competency Standards, an endeavor with other healer groups, namely, Alyansa ng mga Manghihilot at Albularyo (AMA) and Hilot Pinoy, was also conducted in November. Philippine Institute for Traditional and Alternative Health Care (PITAHC) President Isidro Sia said it is through these groups, along with countless others, local traditional healers, like albularyo and hilot gain recognition.
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Tuba Remedy for muscle pain
The PITAHC director said they will only provide certification for local healers. The certification will only prove that the procedures they are using are safe. No clinics, benefits, instruments or ingredients for their healing will be provided to them. “Hindi natin babaguhin ang setup nila. Bakit natin babaguhin ’yung kanilang ginagawa? Gusto lang natin ng recognition para sa kanila,” Sia said. Francisca Rodriguez Solmerano has been the local hilot for more than five decades in Imus. Her family was one of the first settlers in the city, way back when it was still a vast farm owned by illustrious landowners. The 80-year-old was urged by her mother-in-law to learn healing by using medicinal plants and oil extracted from plants and herbs for the benefit of her seven children. Solmerano acknowledged she was doubtful at first because of fear
she might encounter something she could not explain or heal. But eventually she overcame the initial hesitation because she always sought the hand of God for guidance. “Malay mo may makita ka na masamang espiritu o ano na hindi mo kaya. Pero ang akin naman, kapag sa Panginoon ka wala kang takot,” she said. Solmerano uses oil to etch a cross using her fingers on a ceramic plate handed down the generations by her mother-in-law. She runs the plate over a lit candle, repeats this several times until only a part of the cross remains unburnt. From there she deciphers which part of the body needed tending. Aside from using oil and fire, Nanay Kikay, as she is fondly known, uses everyday plants for treatment. She recommends tuba leaves as remedy for muscle pain, lagundi leaves for cough, guava leaves for stomach cramps and
sambong for various illnesses. “Kasi ’yun naman, turo din. Kapag may sakit, isang tapal lang ganoon. Ilalaga mo lang yang mga yan,” she explained. “Hindi natin gagalawin yan, wala tayong pakialam sa [pagagamot] nila. Basta safe and beneficial to the community,” Sia said. Several plants have been scientifically proven as effective herbs in tending to burns, body pain, cuts and other ailments. The World Health Organization (WHO) has released a book enumerating plants that have medicinal properties. One that is common in the country is parts of the kalatsutsi proven to stimulate bowel movements. The flower buds are known to ease fever if eaten with betel nuts. Coincidentally, this is one of the plants used by Tata Omeng although the city hermit acknowledged using the plant for irregular menstrual cycles and for abortion. “Iyan ay binigay pa na listahan ng kanunununuoan ko. Hindi ko pwede sabihin sa iyo lahat. Bawal ’yan. Basta ’yan ay isa sa mga ginagamit ko. Hindi ko maari sabihin lahat ng sangkap,” the 87-year old traditional healer said. Also included in the WHO list is guyabano, which can treat boils and other skin diseases as well as your regular cough and colds. Guyabano has also been manufactured only recently as an antidiabetic supplement. To be concluded
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PNP to streamline issuance of chemicals permit…
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“high risk” chemicals. He said the circular will serve as the implementing rules and regulations of Presidential Decree (PD) 1866, as amended by Republic Act 9516. PD 1866 codifies the laws on the illegal possession, manufacture, trade, acquisition or disposition of firearms, ammunitions, explosives or instruments used in the manufacture of firearms, ammunition or explosives. Manufacturers registered with the Philippine Economic Zone Authority (Peza) earlier complained that the PNP’s more stringent rules for controlled chemicals have resulted in significant export losses and slowed production. Tighter PNP regulations meant additional permits, licenses, and procedures for manufacturers who need chemicals for making their products. Peza officials said some big companies have threatened to shut down their operation if the PNP will continue to implement more stringent rules for some chemicals needed by their factories. The PNP said, however, that PD 1866 gave them the mandate to enforce stricter rules for the use of controlled substances. Businessmen have earlier complained that the PNP’s implementation of PD 1866 was “too arbitrary.” Meanwhile, Senior Supt. John Bulalacao, chief of the PNP’s Firearms and Explosives Office Management Division, clarified that the PNP did not expand the list of regulated chemicals. Bulalacao said it may be possible that the tighter rules led some businessmen to think that it expanded the list of chemicals being regulated by the PNP. “I think companies that were not previously registered with the PNP made the assumption that we added 41 chemicals to the list of controlled substances,” he said. Currently, the PNP regulates 101 chemicals and there are proposals to reduce this to 39. “We regulate more than 100 chemicals and these were categorized by the TWG as high risk or low risk. If I heard it correctly, from [101], the TWG proposed to cut the number of regulated chemicals to 39,” Bulalacao said. For her part, Export Development Council Executive Director Emmarita Mijares said the escort fees being collected by the PNP to transport chemicals have been scrapped. The PNP has declared a 60-day moratorium on the license requirement for regulated chemicals beginning December 9, 2015 until February 9 this year. When asked if the PNP will extend the moratorium, Sarona said, “We’ll cross the bridge when we get there.”
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Tuesday, January 12, 2016 A3
Philippine stocks poised to enter bear market amid selloff by foreign investors
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HILIPPINE stocks are poised to enter a bear market as the nation’s benchmark equity index sank for a fourth day amid a selloff by foreign investors. The Philippine Stock Exchange index (PSEi) dropped 4.37 percent on Monday to close at 6,288.26, the lowest level since March 27, 2014. The PSEi has lost 22 percent from a record 8,127.48 set on April 10, shaving about $61 billion in value from the country’s stocks as of Friday’s close. The slump sent valuations to the lowest level since 2012. Overseas investors sold $13.5 million of Philippine equities this year. They withdrew a record $1.19 billion in 2015, becoming net sellers for the first time since 2008. Traders said the China-led contagion in the region was still to blame for the fall, but most of the investors also cited the worst performance of the US market during the first week of the year. “Negative developments overseas continue to affect the performance of global equities, including the Philippine market. Money managers, including foreign funds, are assessing and rebalancing their exposure to emerging markets following the selloff,” PSE President and CEO Hans Sicat said. “The situation, though, does not change what is happening in the real economy, with the growth drivers seemingly intact. We hope that the resilience and sound fundamentals of the local economy will be apparent in the medium term and can help temper the volatility over the coming periods,” he added. On Friday, the Dow Jones Industrial Index, S&P 500 and Nasdaq all
$1.19B
Total amount foreign investors withdrew from the equities market in 2015
fell by 1 percent. At Monday’s close, the Shanghai Composite index was down 5.33 percent, Nikkei 225 declined 0.39 percent, Taipei’s TSEC Weighted index lost 1.34 percent, and Hong Kong’s Hang Seng index lost 2.7 percent. “There are just too many negatives surfacing at this early stage of the year. Europe is struggling to balance humanitarian interests with a growing security concern in the burgeoning refugee crisis; the Middle East is in tenterhooks as Saudi Arabia and Iran step up rhetoric and alliances are forming,” said Justino Calaycay, trader at Philstocks Financials Inc. “A fall this Monday wasn’t really unexpected. But what came as a big shock was that this seeming “aftershock” from last week’s tremor was just too wild and wide,” he said. “At the rate things are going, it’s not improbable for the index to even fall below 6,000,’’ said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. and who forecast last week that the gauge could reach a bottom in the first quarter anywhere between 6,000 to 6,400.
THE electronic trading board shows a downward trend on the Philippines and other markets during morning trading at the Philippine Stock Exchange in Makati City on Thursday. AP/AARON FAVILA
“What’s positive now is that valuations are becoming attractive and you can now get what you want at the price you want.” The market opened weak at 6,523.28 points, down by more than 50 points at Friday’s close. Losses swelled to 237 points at noon, becoming the main index’s 10th singleday decline. The fall deepened in the afternoon session pushing the market into bear territory, a technical term when prices drop by at least 20 percent. From its 52-week high of 8,136.97 points, prices are now at 22 percent. The 287.17 points drop is the fifth biggest single-day loss sus-
tained by the index. Monday’s close was also the main index’s lowest since February 18, 2014, which closed at 6,193.97, according to PSE data. It was also the single-biggest day drop in terms of percentage since August 24 last year. “Domestic catalysts are needed. Unfortunately, the major ones are not expected until later in the month or even through the first two weeks of February. This leaves locals with very little to grasp on,” Calaycay said. Lexter Azurin, Unicapital Securities Inc. analyst, said the Philippine equity market is actually lagging behind in terms of correction as
compared with its regional peers. “Today, we breached our bear market territory mainly caused by China’s volatile equity market. Thus, panic selling at this point is inevitable,” he said. Azurin said the market is seen to remain in the negative until clear measures are in place to address this contagion. All other sub-indices fell by at least 3 percent, while all of the day’s top traded ended on the red. The broader All Shares index lost 160.31 to 3,627.97, the Financials index declined 50.36 to 1,436.29, the Industrial index shed 422.06 to 10,125.99, the Holding Firms index dropped 249.21 to 6,012.77,
the Services index retreated 56.18 to 1,383.68, the Mining and Oil index plunged 443.51 and the Property index tumbled 171.32 to 2,545.52. Total value of trade was at P7.22 billion. Decliners again clobbered gainers 182 to 22, and 28 shares were unchanged. Ayala Land Inc. was the day’s most traded shedding 5 percent or P1.75 to P30, SM Prime Holdings Inc. dropped close to 7 percent or P1.40 to P19.20, GT Capital Holdings Inc. lost P48 to P1,292, Universal Robina Corp. declined P6.70 to P173.60, BDO Unibank Inc. retreated P4.50 to P95, and Ayala Corp. fell P35 to P665. With reports from Bloomberg News
Will P-Noy veto or allow SSS bill to lapse into law? The answer known by Thursday
House committee okays bill allowing foreigners to own financial companies
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HERE is still no certainty on whether President Aquino will veto or allow to lapse into law the approved bill increasing the pension of Social Security System (SSS) members, despite an endorsement for the bill given by Senate President and Liberal Party Chairman Franklin M. Drilon. The President only has until Thursday to communicate to Congress his veto for the bill, otherwise it will lapse into law. The Senate and the House of Representatives have approved a P2,000 across-the-board monthly increase in the pensions of some 1.9 million SSS pensioners in December. Drilon said the bill was “an early Christmas gift” by Congress to the SSS pensioners. But lobbying for a veto of the approved bill continues in Malacañang, as the said proposal requires at least P49.4 billion in additional annual payouts from the SSS fund, which, at the current amount of contributions from members, is already P5 billion more than the total annual collection of contributions. Presidential Communications Operations Office Undersecretary Manuel Quezon III said Malacañang is hoping that there would be a compromise on the approved bill, which could augment the pension of SSS pensioners, while making sure that the SSS fund would not be impaired
for future SSS pensioners. “Siyempre, lahat tayo gusto natin lalaki ang ating matatanggap mula sa binabayaran natin sa SSS ngunit hindi lang tayo mag-isa; in other words, ang mga kasalukuyang mag-be-benefit mula rito, kailangan din nating isipin ’yung mga down the road. So pinagaaralan ito. Siguro we can all hope that some sort of compromise will be reached, but at this point, wala pang information kung nasaan o ano ang magaganap on the part of the President,” Quezon said. SSS President Emilio de Quiros said in his opposition to the bill during the congressional deliberations last year that this meant that the SSS fund would diminish by at least P5 billion yearly, for the pensions alone, not including other benefits given to SSS members such as maternity benefits, death benefits and disability benefits. The P5 billion is the difference between the required additional annual payouts if the bill is enacted, which amounts to around P49.4 billion, and the actual net revenue, which amounted to roughly P44 billion in 2014. According to the SSS annual report for 2014, the total reserves of the SSS fund, which is the total assets minus liabilities, is P418.32 billion. For 2014, total benefit payments to all SSS claims amounted to P102.6 billion. Currently, the actuarial lifespan of the SSS fund is estimated at 28
years, or up to 2042, while the standard target lifespan of SSS around the world is 70 years. De Quiros noted that the current lifespan of 28 years is already a big increase from the SSS lifespan in 1999, which was only 16 years. But de Quiros said if the bill is enacted into law, it would cut the current lifespan to only 15 years, which is a worse position than the SSS fund lifespan in 1999. The proponents of the bill in Congress, on the other hand, are hoping that the President will sign the bill into law, or would at least let it lapse into law by doing nothing about it, which could have less political backlash than an outright veto of the populist bill. Drilon even endorsed the approved bill for the President’s signature as an early Christmas gift by the administration to the 1.9 million SSS pensioners. Drilon, however, had been quoted as saying that the P2,000 across-theboard increase in SSS pensions could mean additional premiums to be paid by active SSS members now, since the P2,000 across-the-board increase would admittedly strain the SSS fund too much which could drive the pension fund to bankruptcy. The Presidential Legislative Liaison Office (PLLO) said the approved bill was transmitted to the Office of the President on December 15, giving President Aquino until January 14 to communicate his veto to Congress, otherwise the bill will lapse into law.
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HE tec h n ic a l work i ng group (TWG) of the House Committee on Economic Affairs on Monday approved a bill allowing foreigners to own 100 percent of adjustment companies, lending companies, financing companies and investment houses. Liberal Party Rep. Anthony G. del Rosario of Davao del Norte, head of the TWG and main author of the measure, said the bill amends investment restrictions in specific laws governing adjustment companies, lending companies, financing companies and investment houses cited in the foreign investment negatives list. “The main objective [of the bill] is to allow foreign entities to come in and own up to 100 percent of the companies mentioned in the bill, which include adjustment companies, lending companies, financing companies and investment houses,” he said. Under Article XII of the Constitution, foreign investors are prohibited to own more than 40 percent on certain industries, while they are totally restricted to exploit natural resources, public utilities and own any company in the media industry. “As a result of the recent Apec [Asia-Pacific Economic Cooperation] meeting, obviously,
somebody there brought up the issue, why we did not lift the restriction with regards to other financing corporations or financial intermediaries and that is why now we are now pushing for the removal of those restrictions,” del Rosario said. Del Rosario said the bill will be approved on Tuesday next week at the House Committee on Economic Affairs. “On Tuesday, January 19, we will be a having committee meeting wherein I will be sponsoring this final version to the committee. It is also for [committee] approval on Tuesday and hopefully by the following week, we can already approve it at the plenary on final reading,” he said. In the Senate, the bill is currently pending for third-reading approval. Del Rosario, a vice chairman of House Committee on Trade and Industry, said that measure seeks to amend “The Insurance Code” for adjustment companies, “The Investment Houses Law” for investment houses, “Lending Company Regulation of 2007” for lending companies and “Financing Company Act of 1998” for financing companies. “An investment house may be owned up to 100 percent by foreign nationals. In approving foreign equity applications in investment houses, the Securities and Exchange Commission shall
approve such applications only if the same or similar rights are enjoyed by Philippine nationals in the applicant’s country,” the bill said. It also said that a lending company may be owned up to 100 percent by foreign nationals, “provided, however, that where the loan is secured by land, a lending company, more than 40 percent of whose capital is owned by foreign nationals, may bid and take part in any sale of such land as a consequence of such mortgage, avail of enforcement proceedings, take possession and transfer their rights to qualified Philippine nationals for a period not exceeding five years from actual possession. Provided further that the title to said land shall not be transferred to such lending companies and that investments of a lending company shall be in accordance with the provisions of the Constitution.” The bill also provides that financing companies shall be organized in the form of stock corporations, may be owned up to 100 percent by foreign nationals, and shall have a paid-up capital of not less than P10 million in case the financing company is located in Metro Manila and other first class cities, P5 million on other classes of cities and P2.5 million in municipalities.
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DENR to close 400 open dumps this year
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HE government will push for the closure of all 400 open dumps in various parts of the country this year, as it steps up the implementation of Republic Act (RA) 9003, or the Ecological Solid Waste Management Act of 2000.
40,000 tons estimated volume of garbage produced daily in the country At the same time, officials of the Department of Environment and Natural Resources (DENR) and the National Solid Waste Management Commission (NSWMC) vowed to push for the establishment of more sanitary landfills, or controlled waste facilities in lieu of the open dumps. They vowed to “crack the whip” against defiant local government units (LGUs) for the poor implementation of the garbage law. “The law has been in effect for more than 15 years and it’s time that we close all open dumps,” Environment Assistant Secretary Juan Miguel Cuna said. Cuna, the concurrent director of the DENR’s Environmental Management Bureau (EMB), said the closure of all open dumps, or their conversion to sanitary landfill as mandated by law, is among the DENR’s top priorities this year.
The closure of open dumps and establishment of more environment-friendly sanitary landfills, he said, will pave the way for the implementation of all other aspects of R A 9003, particularly waste seg regation, rec ycling, composting, hauling and disposal of residual wastes. NSWMC Secretariat Executive Director Eligio T. Ildefonso said closing down the open dumps will require the establishment of 300 sanitary landfills or controlled waste facilities to accommodate the tons of garbage produced every day. He said LGUs will be ordered to close open dumps within their jurisdiction and warned that local officials will face charges for their failure to comply with the law. The LGUs should start looking at various options to establish a controlled waste facility, where they can dispose garbage, Ildefonso said. Aside from establishing sanitary landfills, the law also mandates LGUs to put up material recovery facilities (MRFs) for every barangay or clustered barangays, in which waste segregation and recycling of collected wastes can be performed before
OPEN dumps need to be replaced with sanitary landfills to ensure garbage will not end up clogging rivers and cause widespread flooding. ROY DOMINGO
disposal. The law also promotes composting of biodegradable materials and their use as organic fertilizers to reduce the volume of garbage produced every day by at least 25 percent. There are currently 120 controlled waste facilities in the country, not enough to accommodate the estimated 40,000 tons of garbage produced every day, Ildefonso said. “These additional controlled waste facilities can be used by LGUs clustered into five or six per area,” he said. He said 50 LGUs are being investigated by the NSWMC, DENREMB and Office of the Ombudsman for failure to comply with the provisions of RA 9003. Last year more than 30 LGUs have been charged by the NSWMC. Charged for violation of R A
9003, he said, are those that blatantly violated the law and ignored the NSWMC’s warning. “Ito iyong mga defiant LGUs na talagang hindi man lang nag reply sa mga warning natin,” he said. “ This year tuloy tuloy na ang gagawin nating pagsasampa ng kaso.” Cases filed against thse LGUs are specific to their violations, but he said most of the violations were for failure to close open dumps. “Pag sinara mo ang mga open dumps, saan pupunta ang basura pag walang sanitary landfills? Sa ilog.” Leones said LGUs should start putting solid waste management in their priorities, as the DENR and NSWMC will not hesitate to file necessary charges against erring local officials. In the past, the DENR and NSWMC have been very lenient
to LGUs; but Leones said it is high time for LGUs to do their part. The DENR and NSWMC, Leones said, will continue to help LGUs by providing them with technical support, noting that it will take at least an investment of P8 billion to fully implement RA 9003. Cuna admitted that most LGUs do not have the financial resources for the construction of sanitary landfills and MRFs, but he said the DENR had an earlier proposal for cost-sharing between the national and local governments for the purpose. He also suggested for LGUs to explore possible Public-Private Partnership Programs “to establish whatever facility they need to establish.” The NSWMC is now eyeing to pilot—test biomass-to-energy projects and establish ecology centers or model resource recovery facil-
ity–one in the Visayas and one in Mindanao—within the year. The NSWMC, Ildefonso said, has earmarked P115 million each for the project—one in the Visayas and one in Mindanao—which will serve as training centers for LGUs. The NSWMC plans to acquire the necessary equipment for the projects before the election ban. The DENR was given a special budget of P500 million for the implementation of R A 9003 this year, which Ildefonso said, will be used for LGUs’ capacity-building activities. “How to properly segregate, recycle and even market these recycled materials will be taught in these pilot facilities,” he said. “Pag successful ang pilottesting natin, we will push for the establishment of more resource recovery facilities. At least one for every region.”
Senate rushing passage of bill regulating credit-card industry C A
“Right now they are saying it is not clear that the BSP can regulate them,” the source added. As endorsed by the Senate Committee, Section 4 of the report specifically provided that the BSP “shall supervise all credit issuers and acquirers.” It added that supervision shall include, among others, issuance of rules of conduct, or the establishment of standards of operation for uniform application to all institutions
or functions covered, and the imposition of penalties in case of noncompliance. The committee report recommended the adoption of House Bil l 5417, tit led “A n Act Reg u lating the Philip pine Credit Card Industr y,” t a k i ng i nto con side r at ion Senate Bil ls 315, 384, 602, 1312, 1620,1704,1714, 1768, 1818, 1920 and 2642, w ith amend ments. Sure to raise a howl is the content of Senate Bill 315—introduced by Senator Cynthia Villar—that
seeks to set a ceiling on interest rates and surcharges, as well as prohibit hidden penalties or costs imposed by banks and financial institutions on purchases and cash advances made through credit cards. Section 14 of the recommended bill states that “no overthe-limit fees shall be charged unless the cardholder provides expressed consent to be charged the over-the-limit fee, or unless that account remains to be overthe-limit on the account’s next statement date.”
Lanao del Sur landlord seeking ‘millions of pesos’ in payment to settle ROW issue B M T. C Mindanao Bureau Chief
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AVAO CITY—A landlord in Lanao del Sur, who owns a piece of land where a power pylon of the National Grid Corp. of the Philippines (NGCP) was toppled down by still unknown gunmen, is asking for “millions of pesos” in exchange for an unhampered access to the high-voltage transmission lines, the government socioeconomic planning unit for Mindanao said. Negotiators of the NGCP have resumed talks with the landowner although the government has advised a thorough determination of the terms, including a look into the nature and ownership of the land, according Romeo Montenegro, director for Investment Promotion, International Relations and Public Affairs of the Mindanao Development Authority. Montenegro, however, did not reveal either the identity of the landowner or the exact amount of money he expects to collect from the NGCP to settle the right-of-way (ROW) conflict. NGCP Towers 19 and 20 in Barangay Sugod, Marawi City, have remained out of com-
mission after these were toppled by explosives last October 29 amid the outright refusal of landowner to allow any NGCP personnel to enter the area to undertake repairs. Other power pylons were also toppled by explosions. Tower 25 in Baloi, Lanao del Norte, on Christmas Eve; and the Tower 95 in Barangay Aroman, Carmen in North Cotabato last December 27. President Aquino on Friday told reporters here that the problem ROW in the Lanao provinces and Bukidnon could be traced as far back during the early martial law years when the first batch of hydroelectric plants—the Agus 1 at the mouth of Lake Lanao in Marawi City and Agus 2 in towns of Pantar and Saguiaran in Lanao del Sur—were constructed. T he power pylons and the transmission lines were also subsequently constructed, and Mr. Aquino said the constructions proceeded without clear terms with landowners. He said that negotiators were directed to determine the current ownership of the land and to review the terms that the landowners were promised going
back during the period when the pylons were constructed and the transmission lines were installed. Montenegro said that the government will also tap military to ensure the safety of NGCP and government personnel undertaking tower repairs. He clarified though that the government has not linked the landowner to the armed men that toppled the towers in Marawi. Montenegro was also careful enough to issue a similar pronouncement in the bombing of the tower in North Cotabato. The NGCP has placed Mindanao under a “yellow alert” status over the precarious transmission situation of the power coming from the Agus 1 and Agus 2 hydropower plants that were isolated after the toppling down of the pylons. The transmission of the power generated has been periodically threatened also with the drying up of the Lake Lanao blamed to El Niño. A yellow alert warning indicates a level when the contingency reserve would be less than the capacity of the largest unit of the grid. The affected two Agus plants have a combined capacity of 150 megawatts.
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Ringgit falls as Moody’s credit-rating downgrade compounds China risks
New report urges more Asean carbon reduction
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NEW Asian Development Bank (ADB) report raised urgency for fast-tracking Southeast Asia’s greenhouse-gas (GHG) emission reduction, warning limited impacts of climate change arising from these discharges can already reach some 11 percent of the region’s GDP by 2100. Launched on Monday in Metro Manila, the report, titled “Southeast Asia and the Economics of Global Climate Stabilization,” highlights need to mitigate GHGs, as it cites the region as among areas most vulnerable to climate change due to geographic, demographic, economic and other conditions prevailing in Asean. The report also said Southeast Asia registered—at nearly 5 percent annually between 1990 and 2010— the fastest relative growth in emission of carbon dioxide, one of the climate change-driving GHGs. “It finds that mitigation is in the region’s economic interest,” ADB Knowledge Management and Sustainable Development Vice President Bambang Susantono said at the report’s launch. He noted adapting energy efficient (EE) measures and addressing deforestation are among mitigation activities for significantly reducing Southeast Asia’s GHG emissions. “EE is the largest source of potential emission reduction while addressing deforestation is critical to mitigation especially in the mediumterm,” he said. According to experts, GHG emissions accumulate in the atmosphere and trap heat so global temperature rises, resulting in climate change. Increasing onslaught of extreme weather events as well as sea level and temperature rise are climate change’s impacts on the Philippines and other Southeast Asian countries, they said. Last year’s climate agreement in Paris targets stabilizing climate by keeping global temperature below a set threshold. To help achieve such target, ADB Climate Change and Disaster Risk Management Division Dir. Preety Bhandari said the bank will double its climate financing to $6 billion by 2020. She noted that $4 billion of such financing will be for mitigation. Some $2 billion will be for adaptation so countries can better cope
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Asean’s annual growth in emission of carbon dioxide between 1990 and 2010 with climate change, she also said. “We stand ready to assist,” she assured at the launch. The report is an output of the ADB’s five-year technical assistance project “Strengthening Planning Capacity for Low-Carbon Growth in Developing Asia,” which the UK and Japanese governments cofinanced. Indonesia, Malaysia, Thailand, Vietnam and the Philippines are countries covered in the report. “Emissions growth would need to fall substantially under a contraction and convergence framework” which has national shares of global emissions “transition from business as usual [BAU] in 2020 to an equal per capita basis by 2050,” the report said. Achieving a 500 parts per million (ppm) climate-stabilization target under such framework requires regional emission reduction of over 60 percent from BAU to a level some 30 percent below 2010 emissions by 2050, the report noted. “Even a 650 ppm scenario requires that 2050 emissions need to be slightly below 2010 levels,” the report continued. The report warned delaying climate action can increase climatestabilization cost—even possibly by about 60 percent as one model suggested. Adapting low-carbon technologies are among measures essential to reducing carbon emissions, the report said further. ADB Principal Climate Change Specialist Ancha Srinivasan assured the bank’s continuing funding support for climate initiatives in Southeast Asia. “We recognize climate change is a threat to the region,” he said at the launch. He added data indicate Southeast Asia’s increasing vulnerability to climate change. PNA
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ALAYSIA’S ringgit extended losses, after Moody’s Investors Service cut the nation’s credit outlook to stable from positive, bringing the assessment in line with other major ratings companies.
The currency weakened 0.5 percent to 4.4070 a dollar as of 2:26 p.m. in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. It fell as much as 0.8 percent in the morning session after muted Chinese inflation data added to risk aversion across emerging markets following last week’s selloff in stocks and currencies. The ringgit is under pressure from a slump in Brent crude, which is trading at the lowest level in 11 years and crimping government revenue for Asia’s only major net oil exporter ahead of a review of this year’s budget. Moody’s cited the external environment in a statement on Monday as it lowered the outlook
No one really believes the China situation has been resolved, so more panic today or at least this week.” —Rabobank’s Michael Every
on the A3 sovereign, the fourthlowest investment grade. Malaysia’s factory output growth slowed in November to the least in 16 months, data showed on Monday. “There will be increased focus on the revised budget, especially on whether the 3.1-percent fiscal-deficit target can be maintained,” said Khoon Goh, a senior foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore. He said the ringgit moved “slightly” lower after the Moody’s announcement.
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GAUGES of developing-nation currencies and shares remained lower early on Monday even after the People’s Bank of China kept its daily yuan fixing steady for a second day, spurring gains in the onshore and offshore rates. Figures at the weekend showed consumer prices in the world’s second-biggest economy increased less than the official target, adding to concern that
more measures will be needed to support growth. Last week’s US jobs data also didn’t help the ringgit, according to Rabobank Group. “No one really believes the China situation has been resolved, so more panic today or at least this week,” said Michael Every, Hong Kong-based head of financial-markets research at Rabobank in Hong Kong. “There’s a knee-jerk reaction to the stronger payrolls, so they’re going to keep hiking and that’s good for the dollar.” US employers added 292,000 workers in December, exceeding the highest estimate in a Bloomberg survey, according to a Labor Department report on Friday. An index tracking the dollar against 10 major currencies rose to the highest level that day since at least 2004. The FTSE Bursa Malaysia KLCI Index of shares dropped 0.8 percent, extending last week’s 2.1 percent decline. The yield on 10year government bonds climbed three basis points to 4.25 percent. Bloomberg News
FISH are hung out to dry in the sun, as Filipino children play in the murky waters of the Manila Bay on Sunday. Pollution and the environment's destruction have been affecting the livelihood of the country's farmers and fishermen, prompting the Asian Development Bank to recommend the fast-tracking of Southeast Asia’s greenhouse-gas emission reduction. AP
Thailand shifting focus to Asean tourists
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IN this September 1, 2015, file photo, Thai classical dancers perform in front of Phra Phrom, the Thai interpretation of the Hindu god Brahma, at the Erawan Shrine in Bangkok, Thailand. AP
HAILAND is being urged to pay more attention to Asean tourists this year to reduce risks from a possible recession in China, its biggest tourist market. The European market, especially Russia, is expected to improve significantly this year, while new markets such as the Czech Republic, Kazakhstan and Uzbekistan should be tapped, Tourism and Sports Minister Kobkarn Wattanavrangkul said. “We expect Asean tourist arrivals of 7 million this year, close to the number of Chinese tourists,” she said. “The Asean tourist market has a lot of potential to grow due to the growth of the middle class in this region.” But Kobkarn said even if China did enter recession, the number of Chinese tourists visiting Thailand would not decline significantly. The Tourism Authority of Thailand said Chinese tourist arrivals were close to 8 million last year and were projected to reach 7.9 million this year. China recently released poor economic data, reflecting that its economy
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Number of Asean tourists seen to visit Thailand this year
is likely to face a recession soon, and its stock market has fallen sharply this week. “Diversifying the tourist base is good for Thailand, and when one market has a problem, another may be good, so the overall impact will be minimized,” Kobkarn said. She said when Russia faced its recession and the rouble was weak in the past two years, Thai tourism was able to offset the sharp fall in Russian tourists with a big rise in Chinese. “Thailand remains an attractive tourist destination because travel expenses here remain affordable,” Kobkarn said.
“We should have various tourism products to suit different tourist groups.” The Tourism and Sports Ministry’s official figures for 2015 showed that tourism revenue totaled 2.23 trillion baht, exceeding the target of 2.2 trillion, while 1.44 trillion came from foreign tourists. International tourist arrivals were 29.88 million, slightly beating the projection of 28.8 million, while there 139 million domestic trips were taken, generating revenue of 790 billion baht. Kobkarn said the tourism sector enjoyed a strong recovery last year despite the economic slowdown, and its momentum was expected to continue this year. This year the ministry will focus on boosting spending per head of foreign tourists by 5 percent to 10 percent from 5,060 baht a day in 2015. The “12 Hidden Gems” project, which was introduced last year, will be promoted more this year as the “12 Hidden Gems Plus” campaign. Its goal is to attract tourists to 12 lesser-known provinces, where tourism revenue rose by 13 percent and the number of tourists 14 percent last year. MCT
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Pakistan, Afghanistan, China, US meet for road map to peace
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SLAMABAD—A key gathering opened on Monday in Islamabad in which four major countries— Afghanistan, Pakistan, China and the United States—hope to lay the road map to peace for the war-shattered Afghan nation. The meeting comes as battlefield losses in Afghanistan are mounting and entire swaths of the country, that cost hundreds of US-led coalition and Afghan military lives to secure, slip back into Taliban hands. Taliban representatives have not been invited to the talks, vowing to talk only to the US and not to the Afghan government. As the gathering got under way, host Pakistan—seen as key to bringing the warring Taliban factions to the table—cautioned of the difficulties ahead. Sartaj Aziz, adviser to the Pakistani prime minister on foreign affairs, warned against prematurely deciding which Taliban factions are ready to talk, urging instead “confidence building” measures to get even the recalcitrant Taliban to the negotiating table. But analysts and participants alike say that, while there are four countries talking, much of the hope for progress toward peace rests
with Pakistan—which is accused of harboring some of the fiercest factions of the Taliban, including the Haqqani group, a US-declared terrorist organization. Pakistan says its influence over the Taliban is overrated. “Even at the best of times they [Taliban] didn’t listen to us,” Aziz told the Associated Press (AP). “Look at Bamiyan,” he said, referring to the Taliban’s destruction in the summer of 2001 of some of the world’s most precious statues of Buddha. The Taliban blew up the statues, ignoring the roars of dissent, including from Pakistan. Aziz refused to say whether Pakistan has a list of Taliban representatives prepared to enter into peace negotiations. The existence of such a list was announced on Sunday by Javid Faisal, deputy spokesman for Afghanistan’s Chief Executive Abdullah Abdullah. At the start of Monday’s conference, Aziz urged that participants
Sartaj Aziz, adviser to the Pakistani prime minister on foreign affairs, warned against prematurely deciding which Taliban factions are ready to talk, urging instead “confidence building” measures to get even the recalcitrant Taliban to the negotiating table.
avoid the media and work toward finding ways to get even the most intransigent Taliban to talk peace. He said the gathering needs “to define the overall direction of the reconciliation process” and define goals “with a view to creating a conducive environment for holding direct talks between the Afghan government and Taliban groups.” A breakaway Taliban group said on Monday that it was ready for talks. The faction, which emerged following the revelation last year that the Taliban leader and founder Mullah Mohammed Omar had died two years ago, is believed to be relatively small and its absence from the battlefield is unlikely to be a game changer. Imtiaz Gul, whose Center for Research and Security Studies has delved deeply into the Afghan conflict and Pakistan’s decades-old involvement, says Pakistan has significant leverage with the Taliban, led by Omar’s replacement Mullah Akhtar Mansoor. Militants in both countries are allied, and getting rid of the Haqqanis could unleash a violent backlash inside Pakistan where the army has been fighting for several years to defeat a coalition of militant groups largely based in its border areas with Afghanistan, Gul said. That battle has been brutal with thousands of Pakistani soldiers killed and wounded, and thousands more Pakistani civilians killed in deadly retaliatory suicide attacks by the militants. But Gul said Pakistan’s Army Chief Gen. Raheel Sharif, who last month went to Afghanistan, has given hints that the military is ready to move away from past support of militants, even those considered friendly to Pakistan. Traveling to Afghanistan unaccompanied by the country’s powerful Inter-Services Intelligence agency, which has long been considered the force behind the Taliban, was a signal, Gul said, that Sharif was
centering future policy decisions only at army headquarters. Changes won’t come quickly, Gul said, “but important for us is to turn the page [from supporting militants] and I think Gen. Raheel Sharif has turned that page.” Though the Taliban were not invited to Monday’s talks, a senior Taliban official, who asked not to be identified fearing exposure and capture, told the AP that two Taliban delegates, currently headquartered in Qatar, will meet “soon” with China’s representatives. The meeting, which will also include Pakistan, is to be held in Islamabad, said the official. Still, there seems little to no chance for early peace talks between the Taliban and the Afghan government. The Taliban, struggling to consolidate their leadership council following Omar’s death, have drawn their line in the sand: no official talks with the Afghan government on a peaceful end to their protracted and bloody war until direct talks can be held with the US. “We want talks with the Americans first because we consider them a direct party,” the Taliban official said in a face-to-face interview with the AP. The Taliban want recognition of their Qatar office under the banner of the Islamic Emirate of Afghanistan, the name they used when they ruled Afghanistan until they were ousted by the US-led coalition in 2001. They also want the United Nations to remove the Taliban from its wanted list and they want their prisoners released from Afghan jails. Afghan President Ashraf Ghani wants no part in giving the Taliban official recognition. Maulvi Shazada Shaeid, a representative on Afghanistan’s High Peace Council, tasked with seeking peace with the Taliban, said the distance between the two sides is vast, holding out little hope for peace. “In the current situation, it is not possible to bring peace,” he said. AP
Reformist lawmaker elected Greek opposition leader
NEWLY elected president of the New Democracy party Kyriakos Mitsotakis (center) is cheered by supporters outside his office in Athens on Monday. Greece’s conservative opposition New Democracy party has elected the reformist as its new leader. Former administrative reform minister Mitsotakis has defeated party stalwart Evangelos Meimarakis in a leadership contest open to all party members. AP/YORGOS KARAHALIS
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THENS, Greece—Greece’s conservative opposition New Democrac y par t y elected a reformist on Sunday as its new leader. Former Administrative Reform Minister Kyriakos Mitsotakis defeated party stalwart Evangelos Meimarakis in a leadership contest open to all party members. With only partial results available, Meimarakis called Mitsotakis to congratulate him on his victory. Both candidates were seen as moderate, but Mitsotakis, the 47-year-old son of former New Democrac y leader and Pr ime Minister Constantine Mitsotakis, was considered the change candidate. Mitsotakis is more clearly a market-friendly politician and
less likely to use populist rhetoric. And, while Meimarakis has been an unsparing critic of leftwing premier Alexis Tsipras’s government, Mitsotakis has promised an even tougher opposition line against what he called late on Sunday a “populist...incompetent government.” Tsipras called Mitsotakis to congratulate him and invite him to a meeting this coming week, an invitation the new opposition leader accepted. But it is unlikely that their relationship will remain as courteous. Tsipras’s Syriza party and their government partners, the rightwing Independent Greeks, have repeatedly portrayed Mitsotakis as too willing to do the bidding of Greece’s creditors.
“New Democracy will now become a hardline neoliberal party that will only do the bidding of the oligarchs, losing any connection with the people,” the Independent Greeks said in a statement. Even Mitsotakis’s opponents, however, largely refrained from referring to his status as a political family scion, at a time when nepotism and political dynasties have been convenient scapegoats for the ills of crisis-ridden Greece. Mitsotakis has created a profile of his own, distinct from his father’s, and that of his elder sister, Dora Ba koyannis, who herself had unsuccessfully sought the party leadership in 2009. Nonetheless, the family patriarch, 97, was there on Sun-
day to congratulate his son and wish him to become prime minister in his turn. With 70 percent of polling precincts reporting, New Democrac y of f icia ls announced t h at Mitsot a k is wa s lead i ng Meimarakis, 51 percent to 49 percent. The final results will be announced on Monday. About 400,000 people were eligible to vote. In the first round, held last December 20, Meimarakis had led Mitsotakis, 39.8 percent to 28.5 percent. Two other candidates were eliminated. Meimarakis, 62, is a former minister and parliamentary speaker. He served as the New Democracy interim leader from July to November 2015. AP
Arab League condemns Iranian ‘interference’ in Middle East affairs
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AIRO—Arab foreign ministers, with the exception of Lebanon, condemned in a Sunday statement what they called Iran’s meddling in Arab affairs. The ministers accused Iran of breaking international agreements by intentionally failing to protect Saudi diplomatic posts in a statement issued following a closed emergency meeting. Lebanon, which has a large Shiite population and is home to powerful Shiite militant group Hezbollah, was the only dissenting voice. Lebanese Foreign Minister Gibran Bassil said in a statement that his country had rejected the statement because it also condemned Hezbollah over alleged interference in Bahrain. Protesters in Tehran stormed the Saudi Embassy and a Saudi consulate elsewhere in the country after Saudi Arabia executed Sheikh Nimr al-Nimr, a prominent Shiite cleric and opposition leader, earlier this month. Em i r at i Fore i g n M i n i ster Sheikh Abdullah bin Zayed Al Nahyan, who led the emergency meeting, said the embassy attack “took place under the nose and within the earshot of security forces.” Saudi Arabia’s Foreign Minister Adel al-Jubeir said Arab nations would “confront” the Islamic Republic if it does not change its ways, without elaborating. Arab League Chief Nabil Elaraby said the region’s foreign ministers will discuss the “steps” they can take against Iran in future meetings over the next two months. Al-Jubier added that there was
no real timeline for such measures. “We don’t want conflict. We don’t want war,” the United Arab Emirates’s Al Nahyan told reporters. Sunday’s session was requested by Saudi Arabia to discuss the attacks. The ensuing crisis has seen Saudi Arabia and several Arab states cut or downgrade diplomatic ties with Iran. “Iran doesn’t have qualms and doesn’t hesitate to using the sectarian card as a way to dominate the region, and interfering in the internal affairs of Arab countries,” Al Nahyan said at the opening ceremony. In the closing press conference, al-Jubeir stressed that Iran has no right to speak out for Shiite minorities in the region because, at the end of the day, they are Arab citizens. “The attacks came after inciting statements from Iranian officials against the kingdom,” al-Jubair told fellow ambassadors in opening remarks before the session was closed to reporters. “What happened was not because of the execution of a Saudi citizen,” the minister said, referring to al-Nimr. He added that tensions with Iran only began after the 1979 Islamic Revolution which overthrew the secular Iranian Shah Mohammad Reza Pahlavi and brought to power a conservative Shiite Islamic regime. The kingdom’s move comes despite Iran’s recent letter to the UN saying Tehran has no desire to escalate tensions and that the Saudis must make a “crucial choice”— either promote sectarian hatred or promote good neighborliness and regional stability. AP
North Korean leader Kim boosts propaganda in praise of nuke test
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EOUL, South Korea—North Korean leader Kim Jong Un looked on Monday to milk his country’s recent nuclear test as a propaganda victory, praising his scientists and vowing more nuclear bombs a day after the US flew a powerful nuclear-capable warplane close to the North in a show of force. A standoff between the rival Koreas has deepened since last week ’s test, the Nor th ’s fourth. Seoul on Monday continued anti-Pyong yang propaga nd a broadc a sts ac ross t he border and announced that it will further limit the entr y of South Koreans to a jointly run factor y park in North Korea. Outside North Korea, Kim faces widespread condemnation and threats of heavy sanctions over the North’s disputed claim of a hydrogen bomb test. Internally, however, Kim’s massive propaganda apparatus has looked to link the test to Kim’s leadership so as to glorify him and portray the test as necessary to combat a USled attempt to topple the North’s authoritarian system. On Monday Kim took photos with nuclear scientists and technicians involved in the test and praised them for “having glorified” his two predecessors, his late father, Kim Jong Il, and his grandfather, state founder Kim Il Sung, according to the state-run Korean Central news Agency (KCNA). Kim earlier called the explosion “a self-defensive step” meant to protect the region “from the danger of nuclear war caused by the US-led imperialists,” a separate KCNA dispatch said. The comments provide insight into North Korea’s long-running argument that it is the presence of tens of thousands of US troops in South Korea and Japan and a “hostile” US policy that justify its pursuit of nuclear weapons and long-range missiles. On Sunday a US B-52 bomber
flew low over areas near Seoul, the South Korean capital city only about an hour’s drive from the border with the North, a flyover that North Korea will see as a threat. The B-52 was joined by South Korean F-15 and US F-16 fighters and returned to its base in Guam after the flight, the US military said. White House Chief of Staff Denis McDonough said the B-52 f light was intended to underscore to South Korean allies “the deep and enduring alliance that we have with them.” Interviewed on CNN, McDonough said the US would work with South Korea, Japan, China and Russia “to deeply isolate the North Koreans” and “squeeze” them until they live up to prior commitments to get rid of their nuclear weapons. World powers are looking for ways to punish the North over its disputed bomb test, which, even if not of a hydrogen bomb, still likely pushes Pyongyang closer to its goal of a nuclear-armed missile that can reach the US mainland. Many outside governments and experts question whether the blast was in fact a powerful hydrogen test. In the wake of the test on Wednesday, the two Koreas have settled into the kind of Cold Warera standoff that has defined their relationship over the past seven decades. Since Friday South Korea has been blasting anti-Pyongyang propaganda from huge speakers along the border, and the North is using speakers of its own to send messages, although Seoul says they are too weak to be heard clearly on the South Korean side. A top North Korean ruling party official’s warning that the South’s broadcasts have pushed the Korean Peninsula “toward the brink of war” is typical of Pyongyang’s over-the-top rhetoric. But it is also indicative of the real fury that the broadcasts, which criticize the country’s revered dictatorship, cause in the North. AP
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news@businessmirror.com.ph | Tuesday, January 12, 2016
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Thailand’s King Bhumibol treated for lung infection, fever
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ANGKOK—Thailand’s royal palace has released a vaguely worded health report on the country’s 88-year-old king, the world’s longest-reigning monarch who has been ailing for years, describing what appears to be a new bout of lung infection and occasional fever with rapid breathing The statement issued late Sunday raised concern about the frail health of King Bhumibol Adulyadej, who has spent most of the past six years living in a Bangkok hospital. The Royal Household Bureau statement said the king had battled a fever for the past two weeks and that tests found “an infection in the lower part of the lungs” and an infection in his blood, as well as inflammation in his right knee joint. The king was given oxygen, intravenous antibiotics and other medication, the statement said, adding that “currently, the king’s
fever has eased, but his breathing is occasionally faster than normal, while his pulse and blood pressure are normal.” The statement did not make clear if the lung infection was gone. Bhumibol, who took the throne in 1946, has faded from public life in recent years due to ill health. The deeply revered king is a constitutional monarch with no formal political role but has been regarded as a stabilizing figure for Thailand, which has experienced political turmoil in recent years. Many regard him as a father figure and his December 5 birthday is celebrated as Father’s Day in Thailand. Worries about the king’s health and succession have contributed to the country’s political instability. The heir apparent, Crown Prince Vajiralongkorn, does not command the same respect and affection as the king.” AP
Brazil’s Dilma Rousseff focuses on economy in face of impeachment
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IO DE JANEIRO—With her job on the line, Brazilian President Dilma Rousseff is spending January developing an economic plan she hopes will restore faith in her leadership and weaken looming impeachment proceedings against her. The once-popular successor of former President Luiz Inacio da Silva has fallen so far that it’s unclear whether she can recover. And she’ll have little room to maneuver once Congress reconvenes in Brasilia in February: Her approval ratings hover in the single digits, both friendly and hostile lawmakers are restive and Latin America’s largest economy is expected to continue contracting in 2016. “Dilma will have one month with no major problems blowing up in Brasilia to come up with a plan to revive a faltering economy,” said Claudio Couto from Brazilian think tank Fundacao Getulio Vargas. “The key is to bring some confidence back.” T h at conf idence h a s been shaken by a series of ballooning crises over the past year. Major scandals, some of which touch Rousseff, have combined with tanking commodity prices to slam the economy, which has suffered credit-rating downgrades, a sharp currency devaluation and 10-percent annual inflation. “I can’t wait to stop hearing bad news from Brasilia,” said Gabriela Malvezzi, a 28-year-old psychologist in Rio. “I don’t even turn on the TV anymore. All that I wanted was for 2015 to end.” Nelson Barbosa, who took over as finance minister last December, is expected to propose a stimulus package and fiscal reforms over the next several weeks. Ideas being f loated include i n f r a st r uc t u re proje c t s, t a x breaks for home purchases and a car-swap program to encourage buying new vehicles. Some are proposing a tax on banking transactions and a reform of the country’s pension system to keep workers in the job market an additional five years. Depending on the sector, women now can retire between 50 and 55 years old, while men can do the same between 55 and 60. Pension reform is sure to draw the ire of Rousseff’s base. But analysts say she must show she is serious about tackling spending, and that she has little to lose. “Let’s say she tries something and it doesn’t work. So what?” said Peter Schechter, director of the Atlantic Council’s Adrienne Arsht Latin America Center. “Does that mean she goes from 8-percent to 7-percent approval ratings?” Regardless of what Rousseff proposes, Congress may not go along. The Workers’ Party has only 59
IN this March 16, 2015, file photo, Brazil's President Dilma Rousseff attends a government ceremony at the Planalto presidential palace in Brasilia, Brazil. With her job on the line, Rousseff is spending January of 2016 developing an economic plan she hopes will restore faith in her leadership and weaken looming impeachment proceedings against her. AP/ERALDO PERES
of the 513 members of the lower house and traditionally has passed legislation by forming coalitions with other large blocs, which may find little incentive to work with the president now. It’s also unclear whether even reforms can slow the tidal wave of bad economic news. Layoff announcements, from sugar mills to steel factories, are a daily occurrence. Even Wal-Mart, one of the largest supermarket chains in Brazil, said it would close 30 stores in January. A wild card is lower house Speaker Eduardo Cunha, Rousseff ’s longtime nemesis who has led the impeachment movement based on allegations that her administration used state-run banks to fill budget gaps. Rousseff has denied wrongdoing. Cunha has said no new bills will be voted on until lawmakers decide on the makeup of the commission to consider impeachment. If the commission allows a full-chamber vote, Rousseff ’s opponents will need a two-thirds majority to temporarily oust her while it moves to the Senate. But Cunha has his own problems: He has been charged with accepting millions of dollars in bribes for building contracts in a graft scandal involving state-run oil company Petrobras, allegations he strongly rejects. At tor ne y Genera l Rod r igo Janot has requested that Cunha be arrested and removed from office, which will be decided by the Supreme Court. Analysts are also closely watching Vice President Michel Temer, head of the large centrist Democratic Movement Party, who has not voiced support for Rousseff over her potential impeachment. He has said he’ll spend January giving lectures and traveling, widely interpreted as signs that he no longer wants to be part of Rousseff ’s government. “Dilma is between a rock and a hard place,” Christopher Garman of the Eurasia Group said. “And if you have inaction, the economic crisis will deepen.” AP
IN this January 7 photo, Republican presidential candidate Donald Trump flashes thumbs up after an address to a group of supporters at a campaign stop at the Flynn Center of the Performing Arts in Burlington, Vermont. With three weeks to go before Iowa kicks off the 2016 presidential campaign, Trump and Sen. Ted Cruz, Republican-Texas, are generating overwhelming enthusiasm among Republican voters in the state. AP/CHARLES KRUPA
US Republicans may face ‘devil’s bargain’ in campaign
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ES MOINES, Iowa—Three weeks before Iowa kicks off the state-by-state presidential nominating contests, businessman Donald Trump and Texas Sen. Ted Cruz are generating overwhelming enthusiasm among Republican voters in the state, along with concern, though not panic, among the party professionals who believe both are unelectable in November against the Democratic nominee. Despite such fears, talk of a “takedown” effort aimed at either Trump or Cruz appears to have faded as the February 1 caucuses in Iowa near. For now, there is nervous acceptance that two of the Republican Party’s most divisive figures may stay at the top of the presidential pack well into the first month of voters’ getting their say. “Cruz would not only cost us the general [election], he would cost the GOP [Republican Party] the future. Trump is not a Republican and he is not a conservative,” said Republican strategist Alex Castellanos, who is not affiliated with a 2016 campaign. “The geometry is conflicting: If you limit one, you aid the other. “At the end,” Castellanos said, “Republicans may face the devil’s bargain and have to settle for the lesser of two antiestablishment evils.” That feeling is echoed by party officials across the coun-
try, who acknowledged they have few tools to stop Cruz or Trump. Instead, there is hope that voters ultimately will settle on what they consider a more viable alternative from a group of candidates that includes Florida Sen. Marco Rubio, New Jersey Gov. Chris Christie, former Florida Gov. Jeb Bush and Ohio Gov. John Kasich. “Let’s see how the votes go before we panic,” said Washingtonbased Republican operative John Feehery, who has been critical of Cruz and Trump. There is little evidence of widespread alarm from establishment Republican leaders and their wellfunded supporters. Despite their commanding presence in preference polls, Trump and Cruz have almost completely escaped paid attack ads, particularly in Iowa. Republican National Committeeman Ron Kaufman of Massachusetts said the party’s “centrist conservatives” will have to
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Antiestablishment evils that Republicans have to choose from in a “devil’s bargain” be patient until what they see as a more electable alternative to Trump and Cruz emerges. “This is about who’s going to be in the finals,” Kaufman said. “Clearly on one side it’s going to be Trump and/or Cruz. And for the centrist conservatives, it’s going to come down to one of three governors or Rubio.” That may explain why the attacks on Cruz and Trump pale in comparison to the amount spent disparaging other candidates. For example, a Rubio-boosting group recently put more than $1 million into sharp-elbowed anti-Christie attacks in New Hampshire. Rubio has been the target of close to $1 million in negative advertising, mostly in Iowa and mostly by Cruz boosters. There is unquestioned excitement among the Republican electorate in Iowa for the two front-runners. On Saturday Cruz concluded a six-day, 28-stop trek across the state, drawing overflow crowds everywhere—from a pizza restaurant in Pocahontas to a small college in Sioux Center, where hundreds packed the auditorium, spilling into the stairwell and upper level.
“There is no doubt that the Washington cartel is in full panic mode,” an almost giddy Cruz said this past week. “They are in full panic mode because they are seeing on the ground conservatives uniting.” At other stops, Cruz supporters stood outside in snow and subfreezing temperatures, unable to get in for a seat, but still trying to listen through open doors. At a Friday morning event in Mason City, 48-year-old Robert Peterson said he was sold on Cruz, even though he said he had never before voted for a Republican presidential candidate. “It’s time for a change,” Peterson said, standing at the back of the room wearing a red “Cruz 2016” button and holding a red, white and blue Cruz sign. “The status quo has got to go.” It’s much the same for Trump, who is showing no signs of slowing down after leading most national preference polls since the summer. The brash real-estate billionaire and former reality television star routinely draws thousands of people to his rallies, packing high-school auditoriums, arenas, convention centers—even an airplane hangar—across the country. Supporters began lining up at dawn for a 7 p.m. rally in Burlington, Vermont, this past week, while in Massachusetts and New Hampshire, hundreds stood outside in the bitter cold for hours waiting to get in. “Folks, we have a revolution going on,” Trump said in Lowell, Massachusetts, mar veling at the thousands of people who f i l led the arena. “People are tired and they’re sick of the stupidity that we’re seeing coming out of Washington.” AP
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Editor: Lyn Resurreccion • news@businessmirror.com.ph
Egypt’s first parliament in 3 years convenes
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Presidential decrees the new chamber is tasked to ratify
MEMBERS of Egypt’s Parliament attend the inaugural session, the first to convene in three years in Cairo, Egypt, on Sunday. The 596-seat assembly, elected last November and December, packed with supporters of President Abdel-Fattah el-Sissi, signaled the completion of a political road map first announced in 2013. It is the first elected chamber since el-Sissi, as military chief, led the ouster of President Mohammed Morsi in 2013 following massive protests against the Islamist leader and his Muslim Brotherhood. AP/SAID SHAHAT
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AIRO—Egypt’s first legislature in more than three years, a 596-seat chamber packed with supporters of President Abdel-Fattah el-Sissi, held its inaugural session on Sunday, signaling the completion of a political road map announced after the 2013 military overthrow of an elected Islamist president. The assembly, elected last November and December, is the first legislature since el-Sissi—as military chief—led the 2013 ouster of President Mohammed Morsi following mass protests against the Islamist leader and his Muslim Brotherhood. The new parliament replaces one dominated by Islamists that was dissolved by a court ruling in June 2012. The new chamber’s first task will
be to ratify some 300 presidential decrees issued by el-Sissi since taking office in June 2014 and Interim President Adly Mansour before him. Under the constitution, these decrees must be ratified within 15 days starting from the date of the inaugural session. Failure to do so will result in the automatic repeal of the laws. The decrees include a law severely restricting street demonstrations
and a terror law that curbs press freedoms and gives police sweeping powers. Sunday’s session was supposed to be a mostly procedural one, with lawmakers taking the oath and electing a speaker and two deputies. But heated arguments between lawmakers broke out when an outspoken member, Murtada Mansour, strayed from the text of the oath to avoid endorsing the January 25, 2011, uprising against autocrat Hosni Mubarak. Mansour, an el-Sissi supporter and president of one of Egypt’s top soccer clubs, changed the part of the oath where lawmakers pledge respect for the constitution, saying, instead, he will respect the “clauses of the constitution,” thus avoiding implicit support for the charter’s prologue. That part of the document contains praise for both the 2011 revolt, as well as the so-called June 30 revolution, a reference to the wave of massive street demonstrations that led to Morsi’s ouster on July 3, 2013. The dispute reflects an ongoing and divisive argument in Egypt regarding the legitimacy and legacy of the original 2011 uprising. Many
pro-el-Sissi politicians and media figures, like Mansour, now brand the 2011 revolt as a mistake—fueled and funded by external powers and foreign agents seeking to weaken Egypt. Other el-Sissi supporters regard both Mubarak’s and Morsi’s ousters as legitimate revolutions. Few in the public sphere are willing to criticize the June 30 revolution that eventually brought elSissi to power. “I don’t recognize January 25, that is my prerogative,” a visibly angry Mansour said over the shouts of other lawmakers. Interim Speaker Bahaa Abu Shaqah demanded that Mansour read the official text of the oath, but he refused. Abu Shaqah left his seat, threatening to adjourn the session, but changed his mind when Mansour, who is notorious for his frequent outbursts of abusive language when on the air, relented. “I will read it, but it is the first oath that I took which comes from the heart,” he said, when he finally relented and read the official text. Mansour, however, sparked another row when he hurriedly and causally read the oath. Sunday’s oath controversy har-
kened back to the inaugural session of the 2012 legislature, when ultraconservative Salafi lawmakers insisted on adding to the end of the oath the phrase “as long as it does not clash with God’s law.” After Morsi’s overthrow, el-Sissi announced three steps to take Egypt back to democratic rule: The adoption of a new constitution and presidential and parliamentary elections. But the process has unfolded against the backdrop of a harsh crackdown on Islamists and secular, and the leftist pro-democracy activists who fueled the 2011 uprising. Thousands have been jailed and hundreds of Islamists killed in a series of clashes with security forces in 2013 and 2014. The Muslim Brotherhood, which swept every election following Mubarak’s ouster, is officially branded a terrorist group. Turnout for last year’s parliamentary elections was around 30 percent, and most of those elected to the assembly support the president. On Sunday el-Sissi vowed to support the chamber and respect the separation of powers, according to a statement issued by his office. Under the constitution adopted
in 2014, perhaps Egypt’s most liberal, the legislature has the right to impeach the president and sack the prime minister, albeit under strict conditions. A pro-el-Sissi coalition in parliament, called “Supporting Egypt,” enjoys the support of 366 lawmakers, according to its leader, retired Army General Sameh Seif el-Yazl. It is designed to ensure continued support for the president and thwart any attempt to hinder his policies. Law Prof. Ali Abdel-Al of the “Supporting Egypt” coalition was elected speaker of the legislature, winning 401 votes, nearly 10 hours into the marathon session. “I hope this legislature brings about the democracy that people have hoped for,” Abu Shaqah, the interim speaker, said in parting comments before giving up the speaker’s seat to Abdel-Al. Addressing the assembly, AbdelAl thanked el-Sissi, whom he described, to a standing ovation and applause, as the “leader president” and “leader of the march”—lofty titles typically associated in the Arab world with authoritarian leaders. “I will always be defending democracy and the national principles of the January 25 and June 30 revolutions,” Abdel-Al said. El-Sissi, who is expected to address the chamber later this month, has since his election in 2014 been focused on restoring security and reviving the nation’s ailing economy. Egypt is grappling with an increasingly potent Islamist insurgency centered in the northern part of the Sinai Peninsula, which claimed the downing of a Russian passenger plane over Sinai last October that killed all 224 people onboard and led to widespread flight cancellations, dealing a major blow to the vital tourism industry. Egypt’s economy has been kept afloat by billions of dollars from its oil-rich Gulf Arab backers injected into its emptying coffers. Still, the local currency—the pound—has been under growing pressure, tourism battered from years of turmoil and double-digit inflation, currently running at nearly 11 percent. AP
STATE OF UNION IN 2016: STRONG JOB MARKET, MIDDLING ECONOMY
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ASHINGTON—President Barack Obama delivers his final State of the Union address on Tuesday night to a nation whose economy is far sturdier than it was when he took office in 2009. Yet, as 2016 begins, the stout job market is accompanied by tepid economic growth and stubbornly flat wages. More broadly, two things are on the rise, to the president’s dismay: global temperatures and Americans’ concerns about terrorism. A snapshot of the country: ■ The big picture. Friday’s December jobs report capped a strong year in which employers added 2.65 million positions. That made 2015 the second best year since 1999 for job gains, exceeded only in 2014. For a third straight month, the unemployment rate was 5 percent. That’s the lowest three-month dip in eight years and half the 10 percent joblessness registered in October 2009, as the country began climbing out of the recession. But average hourly pay seems stuck, sliding one cent last month to $25.24. That left the growth of average pay at
2.5 percent last year, below the 3.5 percent economists consider healthy. The latest figures show the overall economy growing at a modest 2-percent annual rate in last year’s July-to-September quarter, though analysts expect improvement. ■ The economy, from other angles. For Wall Street, 2015 was a roller coaster. Record highs in spring were followed by an abrupt summertime swoon, prompted by worries about the strong dollar’s impact on exports, China’s slowing economy and sagging oil prices. By year’s end the Dow Jones industrial average had faded by 2.2 percent, its first down year since 2008. And it began 2016 with steep declines fueled by continued China worries. Through November, the most recent figure, inflation grew by 0.4 percent for the past 12 months. That minuscule rise was well below the annual 2-percent increase the Federal Reserve (the Fed) prefers. ■ Consumer bonuses. Oil prices slumped to their lowest levels since 2004. That meant bargains at the pump, where last
week’s US average for a gallon of regular gasoline was $2.03, according to the federal Energy Information Administration. That was down slightly from a year earlier. A typical household saved $660 on its gasoline costs compared with 2014, the agency said. Though the Fed raised a key interest rate for the first time in seven years, homebuyers’ mortgage interest rates remained at a relatively low 3.97 percent last week. That’s up slightly from a year earlier but well south of the historic 6 percent average. ■ Health care. The administration says that with the sign-up deadline still three weeks away, 11.3 million people have enrolled for 2016 coverage under Obama’s 2010 health-care overhaul, similar to last year’s enrollments. Though that law has helped decrease the number of uninsured people in the US, progress may have paused. The GallupHealthways Well-Being Index, an independent survey, says 11.9 percent of adults remained without coverage as 2015 ended, about the same number that began the year uninsured.
People remain concerned about rising costs of prescription drugs. Many face employer-provided coverage with growing premiums, deductibles and other out-ofpocket costs. The government estimated that the national health-care bill grew by 5.3 percent in 2014, a turnabout from five previous years of unusually slow growth. ■ Secure, or not? There was a growing threat from the Islamic State (IS) group and escalating efforts by the US to combat it; Republicans say the Obama administration hasn’t done enough. The November killing of 130 people in Paris and last month’s shootings in San Bernardino, California, by a radicalized Muslim couple helped fuel public worries. Polls show growing concerns about terrorism and allowing Muslims to enter the US. A campaign ad by Republican presidential hopeful Donald Trump highlights his call to temporarily ban Muslims from entering the country, juxtaposed with images of the San Bernardino shooters and explosions. Obama and Democratic presidential front-runner Hillary Clinton have criticized Republicans for what they say is
IN this January 20, 2015, file-pool photo, President Barack Obama delivers his State of the Union address to a joint session of Congress on Capitol Hill in Washington. MANDEL NGAN, FILEPOOL VIA AP
demonizing Muslims and thereby helping IS attract recruits. There were 9,800 US troops in Afghanistan and 3,300 in Iraq as 2015 ended, amid continuing violence in both regions. ■ More guns. The Federal Bureau of Investigation reported conducting more background checks on gun buyers last December than in any month since the system began in 1988. It processed over 3.3 million checks last December and 23.1
million in 2015, its busiest year ever. That could be in reaction to San Bernardino and Paris. Despite Obama’s recent executive actions aimed at curbing gun violence, gun manufacturers’ stocks have risen in value. ■ The heat is on. More than 200 nations reached agreement last month to try curbing global warming by restricting the use of fossil fuels, which emit heat-trapping gases. It was an Obama priority. AP
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Police probe tip radical group wants to harm officers
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HILADELPHIA—Police in Philadelphia are investigating a tip that a man charged in the ambush shooting of a patrolman is connected to a radical group that may continue to pose a threat to officers. The police department said on Sunday evening that someone approached an officer on the street and alleged that the man who attacked Officer Jesse Hartnett “had an affiliation to a group with radical beliefs.” Police say they are working with the FBI to investigate the credibility of the information. They have alerted all department personnel about the tip and will continue to require officers to work with a partner until further notice. Harnett was last reported in stable condition at the hospital after a man charged his car as he patrolled his usual west Philadelphia beat shortly before midnight Thursday, firing at least 13 shots, hitting the officer three times. Hartnett got out of his car, chased the man and returned fire, wounding him in the buttocks before he was captured by other officers about a block away. Edward Archer, 30, of Yeadon, Pennsylvania, was charged on Saturday with attempted murder, aggravated assault,
Police say they are working with the FBI to investigate the credibility of the information. They have alerted all department personnel about the tip and will continue to require officers to work with a partner until further notice. assault of a law-enforcement officer and several firearms crimes. He is being held without bail pending a January 25 preliminary hearing. The Defender Association of Philadelphia, listed in court documents as representing him, couldn’t be reached over the weekend to offer comment on the charges. Investigators said Archer told them he was “following Allah” and pledged allegiance to the Islamic State group, and he believed the police department defends laws that are contrary to Islam. Authorities believe Archer traveled to Saudi Arabia in 2011 and to Egypt in 2012 and are investigating the purpose of those trips. FBI special agent Eric Ruona said on Sunday that as US authorities work with partners overseas, it would take time to find any potential terror connections, and it
was too early for any meaningful comment on the subject. Earlier, police said a man tried to grab the gun of a Philadelphia officer working a detail at the hospital where Hartnett is recovering, but they believe the incident is unrelated to the ambush shooting. Police said the man approached the officer outside Penn Presbyterian Medical Center shortly after 10:30 p.m. on Saturday and asked for money, saying he hadn’t eaten in five days. The officer handed the man a $5 bill and entered the medical center, but later, when he was standing near the emergency room exit doors, the man tried to grab the officer’s handgun from the holster. The officer, with the aid of hospital security and other officers, subdued the 40-year-old suspect, who said he wanted the gun to rob a store, police said. AP
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Syria’s Nusra Front extremists kidnap 2 activists in north
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OFFICERS investigate the scene of a shooting on January 8 in Philadelphia. A Philadelphia police officer was shot multiple times by a man who ambushed him, as he sat in his marked police cruiser, authorities said. AP/JOSEPH KACZMAREK
Tuesday, January 12, 2016
EIRUT—Syria’s extremist Nusra Front group seized two prominent media activists in the country’s north on Sunday, shutting down their radio station and burning rebel flags in the process. The opposition radio station, Radio Fresh, said on its socialmedia pages that Raed Fares and Hadi Abdullah were abducted by Nusra, al-Qaeda’s Syrian affi liate, in an early-morning raid in the town of Kafranbel. The Syrian Observatory for Human Rights, a Britain-based group that tracks the country’s civil war, said Fares, who runs the station, was taken because he had criticized the group. In January 2014 Islamic State militants sprayed his car with 40
bullets, hospitalizing him for three months, and in December of that year, Nusra detained and beat him for three days. Also on Sunday the United Nations special envoy to Syria met with Iranian Foreign Minister Mohammad Javad Zarif in Tehran, describing the appointment as “useful” ahead of upcoming peace talks in late January. “Like he had done when he visited Saudi Arabia on January 5, he asked and obtained the assurance of his
interlocutors that current tensions in the region would not affect the engagement of their government in supporting the Vienna process and facilitating the holding of the Geneva talks,” Staffan de Mistura’s office said in a statement. Last week de Mistura met with Syrian opposition officials in Saudi Arabia, which supports Assad’s opponents, and on Saturday he met officials in Damascus, which announced it was ready to attend the talks but wants to make sure that no “terrorist” groups will be represented. A spat erupted between Saudi Arabia and Iran earlier this month after the Sunni kingdom executed a convicted Shiite cleric, Nimr al-Nimr, who criticized the Saudi monarchy. His execution enflamed regional tensions with Shiite powerhouse Iran, where angry protesters ransacked Saudi diplomatic missions, prompting the kingdom to sever ties with Tehran. Several Saudi allies have followed suit and cut or reduced ties with Tehran, the main backer of Syrian President Bashar alAssad. AP
Israel investigating fire FIREFIGHTERS STILL CONTROLLING at offices of rights group AUSTRALIAN BLAZES THAT KILLED 2
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ERUSALEM—A spokesman for Israel’s fire department says it’s investigating the cause of a blaze at the Jerusalem offices of an Israeli rights group the previous night. Spokesman Yoram Levy said on Monday the fire erupted on the floor of a building where B’Tselem’s offices are located. He says extensive damage was caused to the group’s offices. Other offices were also damaged. B’Tselem said its office was empty. The police said one person in the building was slightly injured. Sunday’s fire came amid what B’Tselem and other dovish groups say is an atmosphere of incitement fostered by hard-line legislators and activists against the rights groups. Hawkish non-governmental group Im Tirtzu recently released a video accusing the heads of some dovish groups of undermining the country because their organizations receive foreign funding. AP
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ERTH, Australia—Wildfires that killed two men and destroyed more than 140 buildings in southwest Australia were being brought under control, officials said on Monday. The blazes had scorched more than 71,150 hectares (175,800 acres) of farms and woodland south of Perth, the Western Australia state capital, since they were sparked by lightning strikes last Wednesday, the Department of Fire and Emergency Services said in a statement. The fires had destroyed 143 buildings, including 128 houses, it said. Most of the property damage occurred in the township of Yarloop, where two men in their 70s died on Thursday, Emergency Services Minister Joe Francis said. Four firefighters sustained minor injuries. More than 450 firefighters took advantage of cooler conditions since Sunday to stop the fires from spreading further, Francis said. “It’s not totally under control yet, but we’re very optimistic about the next 24 hours,” Francis told Australian Broadcasting Corp. radio early Monday. Destructive wildfires are common across much of Australia during the southern hemisphere summer. AP
MAO’S GOLDEN STATUE DEMOLISHED
In this January 4 photo, a construction crane rises next to a 36.6-meter (120-foot) tall gold-colored statue of former Chinese leader Mao Zedong in Tongxu County in central China’s Henan province. A village in central China has demolished the statue of the country’s founder after images of the structure covered in gold paint and looming 37 meters (120 feet) high over farmland attracted heated social-media discussion. CHINATOPIX VIA AP, FILE
Mexico begins extradition proceedings against drug lord M
EXICO CITY—Mexico began the process of extraditing drug lord Joaquin “El Chapo” Guzman to the US, two days after the famed fugitive was recaptured following a dramatic, monthslong hunt featuring movies stars, sewer escapes and bloody shootouts. Officials warned that the process could take a long time, as Guzman’s lawyers file legal appeals and maneuver to keep their client in Mexico, where he has already escaped from maximum-security prisons twice. On Sunday agents formally notified Guzman that he was wanted in the United States. In a statement, the Attorney General’s Office said Mexican agents assigned to the international police agency Interpol served two arrest warrants to the drug lord, who is being held at the Altiplano prison following his capture by Mexican marines on Friday. Guzman’s defense now has three days to present arguments against extradition and 20 days to present supporting evidence, beyond the plethora of other appeals they have already started filing. Guzman’s powerful Sinaloa cartel
smuggles multiton shipments of cocaine and marijuana as well as manufacturing and transporting methamphetamines and heroin, mostly to the US. He is wanted in various US states and his July escape deeply embarrassed the government of President Enrique Pena Nieto and strained ties between the countries. Guzman’s attorney Juan Pablo Badillo has said the defense has already filed six motions to challenge extradition requests. Badillo said his client shouldn’t be extradited to the US because “our country must respect national sovereignty, the sovereignty of its institutions to impart justice.” On Saturday a Mexican federal lawenforcement official said the quickest Guzman could be extradited would be six months, but even that is not likely because of the many appeals fi led by his lawyers. He said that the appeals are usually turned down, but each one means a judge has to schedule a hearing. “That can take weeks or months, and that delays the extradition,” he said on condition of anonymity because he was not authorized to comment. “We’ve had cases
MEXICAN drug lord Joaquin “El Chapo”Guzman (right) is escorted by soldiers and marines to a waiting helicopter at a federal hangar in Mexico City on Friday. The world’s most-wanted drug lord was recaptured by Mexican marines on Friday, six months after he fled through a tunnel from a maximum-security prison in an escape that deeply embarrassed the government and strained ties with the United States. AP/MARCO UGARTE
that take six years.” Mexico’s willingness to extradite Guzman is a sharp turnaround from the last time he was captured in 2014, when then-Attorney General Jesus Murillo Karam said the extradition would happen only after he finished his sentence in Mexico in “300 or 400 years.”
Guzman was reapprehended on Friday after a shootout between gunmen and Mexican marines at the home in Los Mochis, a seaside city in Guzman’s home state of Sinaloa. Five suspects were killed and six others arrested. One marine was injured. Mexican authorities say actor Sean Penn’s contacts with Guzman helped
them track the fugitive down—even if he slipped away from an initial raid on the hideout where the Hollywood actor apparently met him. Penn’s article on Guzman was published late Saturday by Rolling Stone magazine, a day after the drug lord’s recapture. In it, Penn wrote of elaborate security precautions, but also said that as he flew to Mexico on October 2 for the meeting, “I see no spying eyes, but I assume they are there.” He was apparently right. A Mexican federal law-enforcement official, speaking on condition of anonymity because he was not permitted to comment on the issue, told The Associated Press the Penn interview led authorities to Guzman in the area of Tamazula, a rural part of Durango state. They raided Guzman’s remote hideout a few days after the interview and narrowly missed capturing Guzman, whose July escape from Mexico’s top security prison—though a mile-long (1.5-kilometer) tunnel—had embarrassed President Enrique Pena Nieto and made his capture a national priority. Describing the capture, Attorney General Arely Gomez said investigators had been aided in locating Guz-
man by documented contacts between his attorneys and “actors and producers” she said were interested in making a film about him, though she did not name them. Two months after that close call, marines finally caught him in a residential neighborhood of Los Mochis, where they’d been monitoring a suspected safehouse. Guzman was able to escape via storm drains and exited a manhole in the street. But he was captured in a vehicle on the highway. In the interview in Rolling Stone, Guzman defends his work at the head of the world’s biggest drug-trafficking organization, one blamed for thousands of killings. When asked if he is to blame for high addiction rates, he responds: “No, that is false, because the day I don’t exist, it’s not going to decrease in any way at all. Drug trafficking? That’s false.” Penn wrote that Guzman was interested in having a movie filmed on his life and wanted Mexican actress Kate del Castillo, who had portrayed a drug trafficker in a television series, involved in the project. “He was interested in seeing the story of his life told on film, but would
A10 Tuesday, January 12, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
The stock market: Where’s the govt?
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HE Philippine stock market officially met the parameters for being in a “Bear market” on Monday after the composite index fell below the 6,500 level. This is not an earth-shattering event and, more important, veteran market watchers are prepared.
However, it never fails to amaze us how the government is always ready to immediately claim the full credit for any positive news and completely disappears when the situation turns negative. The government is like a child that proclaims with pride about being able to throw the stone farther than any of the friends. But it conveniently fails to mention the broken window that the rock broke. With every new stock-market historic high over the last six years, the administration was very quick to pronounce that fact through official channels, hyping it as an indication of its economic policies. Since the historic high in April 2015 and a negative stock-market trend, virtually not a positive word has been said about the stock market by Malacañang. Stock-market price fluctuations—the ups and downs—are normal. However, an eight-month downtrend signals something serious. The stock market is not a game. It is an investment vehicle that requires ordinary people committing hard-earned money to make stock prices go higher. There is a herd mentality in the stock market just like for most everything else in life such as politics and fast-food restaurants. The collective wisdom may have the lemmings follow each other over the cliff to death. But it also leads the lion as well as the zebra to a common watering hole. The restaurant full of customers probably has better food at a better value than the one that is always empty. Collective wisdom helps us make better choices. However, stock-market investors have been wary of buying into the local stock market for months even as the government has been saying all is well and getting better. Yet, we only need to look at the quarteron-quarter (QOQ) and year-on-year (YOY) economic growth rate to see that something is not quite right. While the overall trend is still positive, the past year has seen some economic instability. The four quarterly QOQ percent growth ending December 2014 saw increases of 2.3, 0.5, 2 and 1.1. The quarterly YOY were also inconsistent at 6.6, 5, 5.8 and 6. These are not bad numbers, but they do show an overall slightly declining trend of economic growth since 2012. It is easy to blame external developments for a falling stock market. However, the reality is that investors—like voters—make decisions based on personal experience. If your own business is not growing as fast as it was in 2014, your enthusiasm for the stock market is going to be lower. Nonetheless, with the Philippine Stock Exchange in its current trend, it may take some time before our government speaks about the stock market again.
When weakness becomes strength Manny B. Villar
THE ENTREPRENEUR
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EPORTS about the weakening of the peso starting last year created a general impression that it was bad. The local currency, which was trading at about P42 to a dollar in 2013, went down to P44 in 2014 and ended 2015 at P47.06. The weakening of the peso, as well as of the currencies of other developing countries, was attributed to the recovery of the United States economy and rising interest rates in the US. True, a weak peso in terms of its value against the US dollar has negative effects. The most significant impact is on the cost of goods and raw materials that the country buys from abroad. A weak peso also increases the amount of payments for dollardenominated loans. However, the positive effects of a weak peso far outweigh the negative effects. I believe the weak local currency is one of the factors behind the country’s success in attracting investments in the business-process outsourcing (BPO). The industry, which has become a major source of dollar earnings for the economy, is estimated to have generated more than $21 billion last year, up from $18.9 billion in 2014, and is expected to breach the $25-
billion mark this year. Several years ago, however, the strengthening of the peso (the opposite of what is happening now), threatened the viability of the BPO industry. In 2010 local newspapers reported that the continuing appreciation of the peso (in reaction to the weakening of the dollar) was discouraging some BPO companies from continuing their operations in the country. At that time, the exchange rate was at P43 to a dollar. A strong peso, according to the National Economic and Development Authority makes Philippine exports expensive; reduces the purchasing power of overseas Filipino workers (OFWs); threatens local manufacturers because of cheaper imports; reduces the peso earnings of exporters. The opposite is true when the peso is “weak,” compared to the dollar. It makes exports competitive in the foreign markets and increases the
earnings of exporters. Local manufacturers are in a better position to compete with imported products. A weak currency also makes the BPO industry competitive. At present, the Philippines is considered the leading call-center hub in the world and one of the leaders in the outsourcing industry. The BPO industry is also contributing to employment generation. Its manpower count breached the 1-million mark last year and is expected to reach 1.3 million employees this year. In terms of number of beneficiaries, the weakening of the peso benefits most the OFW estimated at 11 million. With an average family size of five, the OFW sector accounts for 55 million or more than half the country’s population. These are the people who are now enjoying a higher purchasing power. For instance, even if an OFW did not receive a salary raise from his employer, the depreciation of the peso from 44 in 2014 to 47 in 2015 effectively increased his income by P3 to a dollar. If that employee is sending $1,000 a month to his family, the family received an additional P3,000 a month last year compared to what it was receiving in 2014, although the dollar remittance did not change. The impact on purchasing power becomes massive when we consider the amount sent by OFWs home. In 2014, cash remittances sent through banks totaled $24.35 billion. For 2015, the Bangko Sentral ng Pilipinas estimates a 4-percent increase, which translates to $25.32 billion.
China isn’t headed for a financial crisis B C B Bloomberg View
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VER since the 2008 global financial crisis, pundits have tried to guess which country could set off the next implosion. Last week China seemed to put itself forward as a pretty good candidate, as markets around the world panicked over the risks posed by its slowing economy. Those fears, while valid, are overdone. We know much more now about the factors that contribute to financial crises than we did before. Previous victims have all featured elevated risk factors, such as rapid credit growth, poor public finances and asset bubbles. Those risks intensify when they develop in combination with one another. Today’s China certainly suffers from many of them. The Bank for International Settlements has warned that Chinese credit growth since 2008 represents one of the largest expansions in modern financial history. The Chinese credit-toGDP gap, a widely used leading indicator of banking stress, stands at a global high of 25.4. No other country comes close: Turkey, the next on the list, has a creditto-GDP gap of 16.6. Between 2007 and the end of 2014, Chinese and Hong Kong
debt-to-GDP grew by 82 percent and 103 percent, respectively—more than twice as fast as virtually every other emergingmarket economy. The International Monetary Fund warns that China’s government and contingent deficits total nearly 10 percent of GDP. Chinese economists have found housing price-to-income ratios well in excess of the long-term global average. Bad loans are seriously understated; Charlene Chu of Autonomous Research puts them closer to 20 percent. The world’s factory is suffering from severe overcapacity and weak global demand for its manufactured products. Still, it would be a mistake to look at this cocktail of factors and assume a crisis is inevitable. First, just because a country features elevated risk levels doesn’t guarantee disaster. At nearly 400 percent of GDP, Japanese debt levels far outpace those in China, yet few fear a crisis in Japan. By the same token, Chinese home prices in relative terms have been much higher for a number of years than in the US prior to the global financial crisis, without provoking a crash. While countries that suffer financial crises share common risk factors, not all countries with those risk
factors succumb to crises. Second, crises grow out of complicated, nonlinear interactions of various factors, rather than a uniform and predictable sequence of events. In his book Outliers, Malcolm Gladwell describes plane crashes as most “likely to be the result of an accumulation of minor difficulties and seemingly trivial malfunctions.” Chinese leaders are acutely conscious of the “seemingly trivial malfunctions” in the economy that could prompt a crisis and have the tools to address them. Whereas Greece had to haggle desperately with Europe to obtain financing and the US government provoked fierce argument over its corporate bailouts, China has moved swiftly to rescue failing firms to prevent a domino collapse. Authorities will censor market rumors, sell off billions in foreign reserves to prop up the currency, flood the banking system with liquidity—whatever it takes to maintain stability. That doesn’t mean they’ll always make wise policy decisions. But those policies should at least reduce the likelihood of catastrophic outcomes. Third, as with all things in China, the specter of a financial crisis is an intensely political concern. Even a publicly acknowledged slowdown would
The higher purchasing power of OFWs and their families, as well as that of the employees of the BPO industry, is fueling the growth of the retail and real-estate industries, which, in turn, creates a multiplier effect on other sectors of the economy. Considering that economic growth is still driven mainly by consumption spending, it is fair to say that the weakening of the peso will also support growth, at least until we attract enough investments in industries, which are needed for stronger and more permanent growth. The benefits of a weak peso do not stop there. The peso is competitive because it is floating. Because of this, there is no significant strain on the country’s foreign-exchange reserves, which would have been needed to support a governmentfixed exchange rate. Except for occasional interventions to cope with speculative trading, the monetary authorities allow market forces to determine the peso’s value against other currencies. The weakening of the peso also comes at a good time, with oil prices at historical lows. This means that the impact on imports is much less than it was when oil prices were at $140 a barrel, compared to less than $50 at present. The bottom line, the weakening of the peso actually strengthens our economy. For comments, e-mail mbv.secretariat@ gmail.com or visit www.mannyvillar.com.ph.
pose a threat to Communist rule, which is so dependent on the regime’s claims to economic competence. Whereas the US might be able to tolerate the risk or losses associated with a crash and emerge stronger, Chinese leaders—well aware of the fate of the Soviet Union—can’t afford to do so. Should a financial crisis occur in China, it will be because all options to prevent such a profound dislocation have been tried and failed. Before then, no rescue attempt or bailout will be too outlandish to attempt. No policy, however absurd, like maintaining credit growth at twice the rate of GDP growth, will be overlooked. Indeed, the greater problem is that, amid these efforts, the serious and painful restructuring China needs will be postponed. Truly slowing credit growth would prompt a wave of corporate bankruptcies and prevent the government from reaching its GDP growth target. Yet, the alternative—the continued buildup of debt and spread of lossmaking zombie companies across the economy—only deepens the risk of an eventual crash. It’s true that a crisis would be the last possible outcome after many, many failures. The question is whether the cure will turn out to be worse than the disease.
Opinion BusinessMirror
opinion@businessmirror.com.ph
What the...? Here’s what Duterte plans to do if elected Ernesto M. Hilario
ABOUT TOWN
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AVAO City Mayor Rodrigo Duterte emerged as a possible presidential candidate last year largely due to insistent clamor from his supporters, who said that his successful campaign to keep crime incidence in the southern city to a minimum is precisely what should be replicated in the whole country. But after substituting as the presidential standard-bearer of the PDP-Laban last December and teaming up with Sen. Alan Peter Cayetano as his vice-presidential candidate, his platform had remained nebulous and patchy, with occasional statements here and there about changing the form of government to a federal one.
That is, until now. Last week the Duterte-Cayetano tandem bared their comprehensive platform in Cebu City. And just as their initial TV ad said, they stand for genuine change, Tunay na Pagbabago, with Matapang na Solusyon and Mabilis na Aksyon as their battle cry. This main theme has been translated into a three-pronged program of action. First, they will launch a “24/7 War against Crime and Drugs.” The all-out war against illegal drugs is borne out by findings that almost all barangays in Metro Manila—92.1 percent, to be exact—are under the influence of illegal drugs. This disturbing statistics is reinforced by the stark reality that half of those now confined in the country’s jails are charged with drug offenses. How to stamp out the drug menace? For Duterte and Cayetano, what is needed is political will, or kamay na bakal. We can interpret that to mean that a Duterte administration will swoop down on known drug lairs, and go hammer and tongs after the big-time traffickers in illegal drugs. Corollary to this, they also want to restore the death penalty for drug trafficking and other heinous crimes. Duterte and Cayetano also want to increase the salaries of policemen to as much as P75,000 to P100,000 per month. The obvious rationale is that with decent salaries, law enforcers would not be tempted to engage in extortion, bribery and other crimes. Apart from these, they will also make the police and other enforcement agencies adopt modern crimefighting strategies, create special criminal courts, and monitor frontline government officials and employees real time through video and audio surveillance to deter graft and corruption. They will, likewise, prod Congress to pass the Freedom of Information Act and the anti-dummy law and to amend the bank-secrecy law so that the bank deposits of public officials can be readily accessed to determine whether they have accumulated wealth beyond their legal remuneration. Second, the Duterte-Cayetano tandem will strive to achieve an “Inclusive Economy through Regional Development.” The first item under this thrust is to convene a constitutional convention to move the country toward a federal form of government. Federalism will give the various regions more power to govern themselves, instead of political power being concentrated in the central government in Manila. It’s a complete overhaul of the political system dominated by what has been called “imperial Manila.” The disparity in the distribution of government resources is evident in the 2016 national budget. Of the P3 trillion allocated for this year, the total for Metro Manila is 33 percent (15 percent, or P457.5 billion, for MM; 18 percent for central offices). The total for the Visayas is only 9 percent; for Mindanao, only 14 percent. The Conditional-Cash Transfer Program will be expanded to include a jobs/livelihood component. At present, it entails giving qualified
households a fixed amount every month for as long as they send their children to school and pregnant mothers undergo regular health checkups. A Duterte-Cayetano administration will also establish more growth centers across the country to create jobs. They will also set up a P1-billion Small Capital Fund per region to encourage entrepreneurship. To boost regional development, Duterte will move national departments outside the National Capital Region (NCR). The Department of Tourism will be moved to Cebu, the Bureau of Fisheries and Aquatic Resources to the Visayas, the Department of Agriculture to Mindanao, and the Department of Transportation and Communications to Clark. To help the agriculture sector, they will provide free irrigation and subsidized outputs to farmers, and establish more food terminals with cold-storage facilities. Since Mindanao development will be given priority, a six-phase railway system straddling the whole island and covering approximately 2,000 kilometers will be established at a total cost of P78 billion. To allow residents in the Visayas and Mindanao to access modern health care, they will establish specialized hospitals for heart, lung and kidney ailments. And third, Duterte and Cayetano will work toward “Equality under the Law.” Here, they want to put in place “a system of laws that works, actively promotes the welfare of all Filipinos, and protects every Filipino,” in contrast to a system where the law protects only the interest of the rich and the powerful, and excludes the poor and the disadvantaged sectors from any meaningful participation in decision-making. Increasing the salaries of publicschool teachers is their first priority under this component to give them enough incentive to persevere in their chosen profession. The tandem is also seeking the exemption from income taxes of workers earning P20,000/month and below. Duterte has also openly advocated a gradual phaseout of labor contractualization, which denies the labor sector of security of tenure and leaves them to the vagaries of the market. They will also subsidize the Philhealth premiums of farmers, transport workers, and market vendors. Besides these, a Duterte-Cayetano government will abolish all unnecessary permits and procedures for overseas Filipino workers, and severely punish scammers who prey on them through various schemes. Since the country is vulnerable to typhoons and natural disasters, Duterte plans to convince Congress to create a permanent Emergency Response Department. The Duterte-Cayetano team pledges to give a living wage for all Filipinos, believing that everyone should have an income that can meet the cost of living. With this, the nation can finally eradicate poverty over the long term. So are all these goals realistic and achievable? We’ll have to wait and see. E-mail: ernhil@yahoo.com.
Philanthropy in Asia Sen. Edgardo J. Angara
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OR generations, giving was traditionally done through endowments to foundations, created by their founders. In the US, Rockefeller, Ford and Carnegie were the exemplars.
In recent times, giving has evolved into various ways. The norm is “giving while living.” The philanthropy of the new economy now involves billionaires doing system-wide and strategic goal-giving that addresses challenges, such as climate change, education reform and endemic disease eradication. In Asia the story is different. Throughout the region, charity is a culturally rooted age-old tradition exercised mostly through various forms of almsgiving and checkbook
writing. Institutional and strategic philanthropy—similar to the scale and structure seen in the West—is still developing. A 2010 Barclays Wealth survey found only 16 percent and 23 percent of the rich in Hong Kong and Singapore, respectively, counted philanthropy in their top 3 spending priorities, compared to 41 percent in the US. A 2010 ranking of giving across 153 countries by UK-based Charities Aid Foundation shows Asia, in general, lagging behind the
Tuesday, January 12, 2016 A11
rest of the world. One explanation is that wealth in Asia—concentrated mostly in family-run or state-affiliated corporations—has been around for only two to three generations; while the wealth of such families as the Rockefellers, Carnegies and the Fords has been around for much longer. And as Dien Yuen, chief philanthropy officer of Give2Asia, said, many of the rich in the region are still coming to terms with their wealth. A 2014 Singapore Management University study on philanthropy in selected Southeast Asian countries found that most philanthropic giving remains informal, and particularly “tied to religion, personal preference and social connection rather than evidence of need or a desire to address systemic change.” That appears to be the most logical reason. The fact is, there are more people becoming billionaires in Asia than in
China, Philippines, and the PSE John Mangun
OUTSIDE THE BOX C As if things could not get any worse, the Hong Kong Overnight interbank borrowing rate exploded by 939 basis points to a record-high 13.4 percent. Chinese companies traded on the Hong Kong stock market dropped to 2011 level as liquidity in the system dried up and companies and banks were desperate for cash. What do these things mean for the Philippines? Depending on which analysis you care to believe, China is shrewd, ruthlessly twisting the global financial markets to its own advantage. Alternatively, China is a helpless victim finally reaping the whirlwind of its own foolish economic policies. As always, the truth
lies somewhere in between. With the governments and central banks in the West and Japan assuring the people that their economies are coming back strongly, what better time for China to devalue its currency. China is basically saying, “If you’re so rich now, you can afford to buy more Chinesemade goods and we are going to help by making your currencies stronger.” As for letting the Chinese stock markets fall, they are way overvalued with the median Price/Earnings valuation at 64 while all the major global stock markets are trading below 20. Chinese investors by inclination and government “encouragement” will probably hold on and those that do sell will add cash to the Chinese economic system,
which has falling inflation. To the foreign investors: “You have been saying that our stock markets were overvalued, so we are proving you right and now you can buy at cheaper prices. Happy now?” Certainly, China has pushed its economy, currency and stock markets to the brink with easy money. The “reset” button was going to have to be pushed sometime and, unlike in the rest of the world, China can do this without riots in the streets. The bankers and corporate executives can either bite the bullet or take an extended vacation making Christmas decorations—for export to the West—in some government prison. The Philippine stock market is down 20 percent from its April 2015 high and the reasons are like the ingredients of Filipino fruit cocktail with a lot of papaya, some mango and bits of nata de coco. The primary reason is that there has been too much exuberance, particularly from those investor experts who have long experience since 2009 as the market has been a one-way trip higher. Price appreciation outstripped both economic growth and corporate
A call to greatness via service to others B D. G P Secretary General, Philippine Red Cross
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BELIEVE that it was Dr. Martin Luther King Jr. who said, “Everyone has the power for greatness—not for fame, but greatness, because greatness is determined by service.”
I believe in that credo with all my heart, and it is in that spirit that the Philippine Red Cross (PRC) has been able to do tremendous things. Over the last decade or so, the PRC has undergone a remarkable transformation into the country’s foremost humanitarian organization. Measured by our ability to respond to natural disasters, foreign or domestic, there is probably no organization, aside from the government itself, that could match what we can deploy in terms of logistics support, equipment and various lifesaving resources. And with every disaster we confront, especially those in the mold of Supertyphoon Yolanda (international code name Haiyan), our capacities only grow ever stronger. We learn from the challenges we deal with each time, and we can adapt to the demands of whatever situation we find ourselves in at any given moment. For the survivors of Yolanda alone, we were able to build 68,083 shelters, valued at P2.5 billion; in the area of health, we were able to repair and reconstruct 43 health facilities, and provided medical equipment to 60 rural health units and 17 district hospitals; for water sanitation and hygiene, 36 schools were provided with facilities and 62,809 facilities were reached by our programs. Those are just the most recent data as our recovery program is still ongoing. As part of our thrust to empower the survivors of any natural disaster, we usually encourage them to have a hand in their own destiny.
For instance, Juris, a carpenter whose house was ripped apart by Yolanda, built his own home for his wife and children, assisted by the PRC, which supplied them with corrugated iron and a cash grant that allowed him to buy paint, cement, and plywood. His wife, Lucina, told us: “Because of the Red Cross, we have our house and it is very beautiful.” Our livelihood assistance reached 59,218 families in the areas hit by that storm in Eastern Visayas, in addition to over 1,109 individuals enrolled in skills training programs and 6,247 residents who were provided with technical training in livelihood. One of the most successful beneficiaries is Irene Collera, otherwise known to us as the “Buko Queen”. With the assistance provided to Irene by the Red Cross, she transformed her “buko shack’’ into a sari-sari store. Due to the success of her business, Irene has already purchased a second hand multipurpose cab for herself and has already paid her debts in repairing her house after the devastation of Yolanda. Yolanda pretty much destroyed everything in its path, including educational institutions, the PRC rehabilitated and reconstructed 431 classrooms and we distributed 5,083 school kits. We enrolled the parents of these children in our livelihood programs, as well, allowing their children to recover from the trauma of the storm, and the mothers and fathers to regain a sense of dignity and hope. We did all these things for the sur-
vivors of Yolanda, while simultaneously overseeing similar recovery projects all across the country for natural disasters that hit in the past. This year also marked an important milestone. A few months ago, we inaugurated the PRC Tower, that monument of steel and glass, which is also a beacon of hope and symbol of volunteerism. It has enabled our six major services (Blood Services, Disaster Management Services, Safety Services, Health Services, Social Services, Red Cross Youth and Volunteer Services) to be housed in a modern facility, where the collective work of the PRC can be orchestrated. In addition to that, the PRC is a national organization because we have a presence all throughout the country, especially in major cities -- but also in places far and away from the hustle and bustle of modern life. But all of that is not what makes the PRC great. It is only a means to an end, not the end itself, for the reason for being of the Red Cross Movement is even grander than mere bricks or mortar. The most important asset of the Red Cross is its people—its volunteers, and the millions who support our work. I may be biased in saying this, but their work speaks for itself. You will never find a more dedicated, generous, and sacrificing group of people engaged in the most difficult—sometimes dangerous—activities on behalf of humanity. All of them embody the fundamen-
the US. And a much greater reason for giving is that the poorest people of the world live in Asia. There are some hopeful signs. A few of Asia’s wealthy have already started giving big. In 2014 Jack Ma, founder of Alibaba, donated $2.9 billion in share options to various social-welfare causes and schools, including the Hangzhou Teachers University where he graduated. Azim Premji, chairman of Indian IT firm Wipro, pledged his shares worth $8.5 billion to charity. On the whole, the Asian philanthropy sector can still develop and learn more from its Western counterpart, especially in making sustained philanthropy toward solving broad societal challenges. Clearly, there is more room for the sector to grow given the 2015 World Wealth Report noted that the biggest growth in the number of high-net-worth individuals was in Asia Pacific. E-mail: angara.ed@gmail.com.
earnings. Time for a reset here also. Foreigners have been selling as on virtually all global stock markets, which moved lower in 2015. In times of uncertainty, cash is still king. Expect more downside action and then expect a strong rally. The Philippine economy is slightly weaker than in past years. The private sector has carried the full load for the past five years, as government has failed to hold up its end of the economy. That will improve through the year. But China’s impact is small and much lower than in other regional countries. Every decrease of 1 percent in Chinese economic growth lowers Philippine growth by about 0.30 percent. We can live with that. 2016 is and will continue to be a problematic year with China only one— and not the most important —variable. However, and more than ever, T.G.Y.F.— Thank God You’re Filipino.
E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
tal principles of the International Red Cross and Red Crescent Movement— humanity, impartiality, neutrality, independence, voluntary service, unity and universality. What powers us is our values. It is what guides and inspires all Red Cross staff and volunteers. When you join our organization, you do not acquire a job— but a way of life. Though we cannot tell the future, or even what will happen in the year 2016, we are also not completely blind about it. We know that disasters, large or small, will come—whether we like it or not. People suffer all the time, for various reasons, and they probably will still do so, no matter what year it is. Events that we never even imagined will strike us or our loved ones down for the count—but we don’t know when, or how. Every year the situation never changes—it almost seems as regular as clockwork. The good thing is that, as Filipinos, we have never lacked for the most important resource—the will and desire to do good for others. And it comes naturally to Filipinos, most especially, because of that. Greatness is within the reach of every human being. We are defined by our culture, and when you become part of the Red Cross, that means you become ingrained with a culture of service —a culture dedicated to alleviating the suffering of humanity. That is the Red Cross way. It changes everything. It changes you. All it takes is service. Committed service to the humanitarian cause. It is always within the reach of anyone. Reach out. Join us. Be a part of the Red Cross movement. And let’s make 2016 another year to remember...not for the darkness that awaits us, but for the light that we can collectively shine together in the service of humanity.
2nd Front Page BusinessMirror
A12 Tuesday, January 12, 2016
www.businessmirror.com.ph
Mobile phones to help banks double their reach to 40M Pinoys in 5 years
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NITED States-based analytics company Fico said the number of Filipinos with access to the banking system could reach 40 million in the next five years, or double the current total of about 20 million, if the trend of tapping mobile-phone users as bank clients for consumer loans continues to pick up. While the majority of mobilephone users in the Philippines are on prepaid, there is still a lot of data that can be gathered from these users that can allow banks to lessen their risks in extending loans online to subscribers that they have never even met, or would probably never meet in person. Fico Country Director for the
Philippines Burton Crapps, who personally advocates giving access to credit to those who should have it but are not trusted enough by the banks due to lack of credit information, said many of these prepaid users are eligible to become clients of lending institutions, especially for small consumer loans of up to P10,000, which pawnshops are already studying to
give to their regular customers even without collateral. “A lot of them is prepaid; but even if it’s prepaid, there’s still a lot of information, like how much they top up; if they top up during the 15th, then they probably have a job; if they top up regularly, then they probably have a relative who is an overseas Filipino worker [OFW],” Crapps told the BusinessMirror. “Then you’re opening up 30 [million] to 40 million Filipinos out of the 40 million Filipinos who are unbanked but are eligible to be banked.”
Worldwide trend
THE Groupe Speciale Mobile Association (GSMA), or the Association of Mobile Operators Worldwide, also recognizes this emerging trend of using mobile-phone infrastructure in reaching out to the so-called unbanked sector in society. According to the GSMA’s Global Mobile Economy Report for 2015, mobile operators see the financial technology, or “fintech,” as a “rapidly maturing industry that is bringing financial inclusion to a growing number of previously unbanked and underbanked populations across the developing world.”
The report said mobile money services have been expanding, especially in the African continent, to serve those far-flung communities that cannot be reached by the traditional banking system. As of December 2014, there were an estimated 299 million mobile money accounts throughout the globe, and the majority of these accounts are from clients in Sub-Saharan Africa. “The number of registered mobile money accounts grew to reach 299 million globally at the end of December 2014. Sub-Saharan Africa still has the majority of mobile money accounts,” the report said.
Also emerging in the Philippines
THE use of mobile phones to extend loans to mobile-phone users is relatively new here in the Philippines, although the use of mobile credits to pay for consumer goods has been around for years. Extending loans to mobile-phone users is a different thing since it involves a risk that the debtor could already be deep in debt and is at high risk of default, or could altogether be a fictitious person. This is why banks, which serve as creditors in transactions wherein a mobile-phone subscriber takes out a loan through an online web site, are still averse to providing even small consumer loans to mobile-phone subscribers. “Banks, as the incumbent players in financial technology, are not necessarily the most open-minded when it comes to working with tech companies. They may be used to their own processes and not see the costeffectiveness of partnering with tech players,” said Lito Villanueva, vice president and head of financial technology at Voyager Innovations, the digital innovations arm of Philippine Long Distance Telephone Co. and Smart Communications. But because of the increasing
40M Number of Filipinos who are still “unbanked” but are eligible to be “banked,” according to Fico
popularity of consumer loans among the so-called mobile-first consumers, or that part of the market who use their mobile phones more than an actual computer in making purchases online, the banks are now more willing to partner with mobile platforms to become creditors for loans taken out by this segment of consumers. In just a year after the launch of Land Bank of the Philippine’s Mobile LoanSaver in 2015, Villanueva said the mobile phone-based loan and savings facility had already generated a loan volume that would take three to five years of traditional banking operation to generate. “We have solid empirical evidence to prove that consumer loans via digital channel is the future of bank, which started in developed markets. Among the first developing and emerging markets to successfully roll out this initiative was the Philippines, through our LandBank Mobile LoanSaver. Over P5.3 billion was released to over 36,000 borrowers coming from 795 government agencies. Comparing this 12-month loan volume with other banks with manual loan processes, it would take these banks between three and five years to even generate that same loan volume,” Villanueva said. The profi le of borrowers also showed that the mobile lending program reached the grassroots, as
19 percent of borrowers came from third- to sixth-class cities, and another 21 percent came from third- to fifth-class municipalities.
Mobile loans process
THE success of LandBank’s Mobile LoanSaver prompted Voyager Innovations to launch another mobile phone-based credit facility called Lendr, which is an online marketplace for consumer loans envisioned to be a tool to tap the mobile-phone subscriber market for consumer loans and, thus, give access to credit to millions of Filipinos without access to the traditional banking system. Villanueva explained how the process used by Lendr is able to extend loans to subscribers, while, at the same time, reducing the risk enough for banks to trust even a prepaid subscriber taking out a loan. “Lendr aggregates all consumerloan products of banks. Any interested mobile subscriber can just register to have a unique Lendr account via SMS, mobile app or online. As soon as the subscriber gets a Lendr account, he can now apply for any type of loan he prefers by first searching for available promos of participating banks or those banks that offer the lowest interest rate or the best deal,” Villanueva said. “Once the customer is able to choose his preferred bank or banks, the said application would now be sent to those banks in real time. These banks now would have their usual credit checking, processing and evaluation. The bank with the quickest turnaround time to approve such loan application gets the business, while the other banks would be disabled to further approve the same loan application. When the customer gets the approval notification from the said bank, the same customer still has the option to either accept or reject such bank approval,” he added.