BusinessMirror January 22, 2016

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UNITED NATIONS

2015 ENVIRONMENTAL MEDIA AWARD LEADERSHIP AWARD 2008

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Life

EAR Lord, inspire us to reflect on this message that pertains to the importance of families: “Remember that families really are the first place for the Christian education of children. Guide with tender concern those families in difficulty or in precarious conditions, helping them to understand and carry out God’s authentic plan for marriage and the family,” Saint Paul II said. Indeed, these are thoughts to ponder to make our own families happy and joyful with God’s grace and love. Amen.

SAINT MARTIN PARISH BULLETIN INSERT AND LOUIE M. LACSON, HFL Word&Life Publications • teacherlouie1965@yahoo.com

MAKING SURE KIDS AND DOGS MIX WELL D2

BusinessMirror

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

Friday, January 22, 2016

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EVA LONGORIA AND A LIFE THAT PLAYS LIKE A ‘TELENOVELA’ E

BY YVONNE VILLARREAL Los Angeles Times

VA LONGORIA’S return to prime-time television on the NBC comedy Telenovela comes four years after she said goodbye to her career-defining role as wealthy Gabrielle Solis on Desperate Housewives. And in this particular moment, it’s a role that has her drenched in water.

As Ana Sofia, the over-the-top leading lady of the show-within-the-show Las Leyes de Pasion (The Laws of Passion), Longoria is the star of a comedy that peers behind the scenes of a popular Spanish-language soap opera, a telenovela where the drama offscreen is just as melodramatic as the drama onscreen. Ana Sofia is bossy but lovable, out of control while trying to be the one who holds things together. And she often finds herself in wacky situations.

But Longoria’s not just acting here. She’s also directing. And did we mention producing?

During a recent shoot on Universal Studios’s backlot in Universal City, Longoria scurries in fringed high heels from her mark in front of the camera, where her character has just been doused in water by a co-star for a post-hurricane scene, to a nearby director’s monitor where members of her team surround and cover her in towels.

“It doesn’t look like we’re having a wet T-shirt contest, right?” Longoria, dressed in a white tank and white shorts, asks while reviewing the footage. “OK, let’s do it again and go in a bit tighter now.”

The spoof on Spanish-language soap operas— which previewed last November and had its premiere in early January—comes at a time when networks are looking at Empire’s success and striving for more diversity to appeal to underserved audiences.

Telenovela joins Jane the Virgin, Narcos, Bordertown and other series that weave Latino culture into their foundations. Telenovela is also one of three NBC series launching midseason with Latina leads, with

Jennifer Lopez in the drama Shades of Blue and America Fererra in the workplace comedy Superstore. It’s a shift that follows years of English-language networks struggling to find ways to cater to a growing Latino demographic, which in 2013 accounted for 17 percent of the US population.

For Longoria, who has solidified her role as a Latina activist in recent years, the fight isn’t over. “Look, I think the Hispanic community is making progress on television,” Longoria says. “But we’re still severely underrepresented.”

The 40-year-old actress is seated in the stark white dining room of her character’s Miami home during a separate, off-day from filming, and the topic seems to animate her. Leaning in to focus her gaze, she taps the table with her right index finger when punctuating certain points, as if talking to a policy-maker.

“When it comes to diversity in television, we have to have more people behind the camera,” she says.

“We have to have more producers and writers— specifically, writers—in order to create those stories and dig from the well of our community, which has been untapped. And that’s what we’re doing here.”

Developed by Cougar Town veterans Chrissy Pietrosh and Jessica Goldstein from an idea by Longoria, Telenovela features an all-Latino cast: Diana Maria Riva as head of wardrobe for Las Leyes de Pasion, Jose Moreno Brooks as the dense costar, Alex Meneses as an aging telenovela star, Amaury Nolasco as the go-to villain, Izzy Diaz as a beleaguered writer, Jadyn Douglas as the ditzy ingenue, and telenovela veteran Jencarlos Canela as the Latin heartthrob.

Latino representation behind the scenes, however, is less robust. On Telenovela’s 14-person writing staff, just three are Latino. Longoria says some were brought on through NBC’s diversity writing program; others, knowing of Longoria’s advocacy work, submitted material directly to her production company UnbeliEVAble, which she runs with producing partner Ben Spector.

“I’ve been lucky to be a magnet for that,” Longoria says. “But it’s hard to find that talent. And with the Latino talent that’s already out there, they’re swooped up fast because there are some 400 scripted programs a year. There is a need for a better pipeline because there’s this chicken-or-the-egg problem.”

But the Corpus Christi, Texas, native is careful about how to beat the diversity drum in Hollywood.

The multihyphenante, who also serves as an executive producer on Lifetime’s Devious Maids, says she didn’t set out to launch her production company to focus on Latino content, nor does she want Telenovela to be viewed as Latin show.

“I wanted to focus on good content because Hispanics will show up when the content is good,” she says. “It’s not hitting people over the head ‘We’re Hispanic!’ But, at the same time, you can be proud that you are that different voice.”

That’s just one facet of the industry Longoria finds herself examining. Another is the importance of a show’s title in a market inundated with hundreds of series. The comedy, originally called Telenovela, changed its name to Hot & Bothered before reverting back to Telenovela just before launch—at the advice of TV comedy king Chuck Lorre.

“I wanted to know more about comedy, so I asked Chuck Lorre,” Longoria says casually. “I asked him about the title of our show. He didn’t like Hot & Bothered. He said, ‘It can’t be a feeling, it has to be a noun,’” she explains. “I said, ‘Well, it was Telenovela— and he was like, ‘That’s funny.’ So we switched it back.”

Longoria knows success isn’t all in the name.

Before an interview, she peppers an NBC publicist with questions about the best time to drum up promotion for the series—during the show’s December preview, when it has the benefit of a lead-in from The Voice, or the official time slot launch in January?

NBC, for one, is trying to figure out the right mix of comedy.

“The definition of success when it comes to network comedy is much different these days,” NBC Entertainment President Jennifer Salke says. “There’s not only a ratings pressure—it’s about quality, it’s about growth potential, it’s about how it does on other platforms, and it’s about doing something relevant that has a big voice at the center of it. We think Telenovela has a lot of potential because it’s a format well for Spanish-language networks and yet it’s a world that our English-speaking viewers are sort of unfamiliar with.”

Despite favorable reviews from critics, Telenovela’s back-to-back preview last December received soft ratings. The first episode averaged a 1.4 rating in the key demo of adults ages 18 to 49 and 5.4 million viewers at the 10 pm hour. The second episode dropped considerably, pulling just a 0.8 rating and 3.3 million. “There were so many factors—we were up against a Cowboys game, we were up against a new NCIS,” Longoria says in a follow-up. “We were on at 10 pm after The Voice—I mean, I had trouble staying up and watching it. I was so tired.”

As things have turned out after the show’s official early January launch, viewers will be seeing less of it than originally intended. In what started as a bidding war between NBC and ABC to land Longoria on their respective networks, the peacock network offered the incentive of a straight-to-series 13-episode order if Longoria, already tapped as an executive producer, agreed to star in the series. But halfway through production, NBC reduced the order to 11 because of scheduling-related issues.

“I’m all about truth, and so I always feel like you don’t sugarcoat things that shouldn’t be sugarcoated,” Longoria says of breaking the news to the cast. “I mean, you can’t do anything about scheduling and finances of an entire network; there’s no battle to fight there. What we can do is make those 11 an amazing 11.

NBC, I, and the writers and the cast all want the same thing: We want a very successful comedy.” n

LIFE

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FORTUNE COMES TO THOSE WHO WAIT

Motoring FORTUNE COMES TO THOSE WHO WAIT BusinessMirror

Editor: Tet Andolong

Friday, January 22, 2016

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S    R S. P

HE all-new Toyota Fortuner has finally arrived, as Toyota Motor Philippines (TMP) recently unveiled the second generation of its best-selling midsize sport-utility vehicle (SUV) during the media thanksgiving party at the Marriot Grand Ballroom in Pasay City. Since its introduction in Thailand mid last year, anticipation rose as to when it will land in the Philippines.

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

Special to the BM

HE rising wave of global terrorist attacks against key tourism destinations has encouraged the Department of Tourism (DOT) to impress on the local tourism industry the necessity of creating crisismanagement committees, which can act as first responders in the case of attacks.

In an interview with the BM, Assistant Secretary for Tourism Development Planning Rolando Canizal said “many of the branded hotels already have their own crisis-management committees to deal with incidents like that [terrorist attacks]; in fact, travel operators make sure to only deal with establishments which do have procedures. But the DOT has also been meeting with the owners of smaller hotels, and training them in management procedures on how to deal with such a crisis.”

This developed as Indonesian tourism officials said their country has now fully recovered after last Thursday’s terrorist bombings in Jakarta.

C  A

Henry Ford Awards Best Motoring Section 2007, 2008, 2009, 2010 2011 Hall of Fame

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Friday, January 22, 2016 Vol. 11 No. 106

PHL hotels told to form crisis teams for antiterror response

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EVA LONGORIA D

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INSIDE

Reflections on families

A broader look at today’s business

DISTINCT CHARACTER DESIGN The fascia radiates

from the signature keen-look appearance with sleek-looking front grill and slender headlamps extending to the side fenders.

VENICE IN BONIFACIO GLOBAL CITY The Venice Piazza at McKinley Hill is a highly regarded dining hot spot and home to an excellent chain of restaurants offering diners a taste of European and Mediterranean flavors, amid a charming setting. Standing nearby is McKinley Hill’s newest dining attraction, Tuscany at McKinley Hill, a scenic restaurant row inspired by the grandeur of one of the most magnificient places in Italy. Beneath its carefully crafted façades and rustic exteriors lie its best-kept secret— a whole new world of flavors waiting to be discovered. NONIE REYES

MODERNISTIC AND ELEGANT The cabin with embellishments accentuating every detail from the modern dashboard layout to the fresh siding trims.

MOTORING

NEW GD DIESEL ENGINE SERIES The 4X4 variant’s 2.8-liter, four-cylinder and

front-mount intercooled turbodiesel with Variable Nozzle Turbo motor that is capable to produce 174 hp at 3,400 rpm and a 450 Nm of torque between 1,600 rpm and 2,400 rpm.

Not until January 14 when members of the motoring media were fortunate enough to have an exclusive up close and personal encounter with the allnew Fortuner.

What is evident from this newgeneration Fortuner is the significant evolution from its predecessor that reigned for a decade as one of the sought-after mid-size SUVs in the country. “Our concept was to build

all-new Fortuner looks smarter and bolder in every angle. Exterior elements limited to the V editions are the bi-beam LED with auto leveling, auto on/off, auto-cut and auto followme-home system; daylight running lights; chrome door outside handles and belt moldings; and color-keyed side mirrors with outside signal and puddle lamps. Likewise, the 18-inch multispoke alloy wheels with 265/60

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‘WE NEED FACTS’

B L S. M

Sports

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BusinessMirror

THIS image provided by Facebook shows Facebook Sports Stadium, which will focus on most major sporting events around the world. AP

INTRODUCING: T

HERE’S a new stadium in town. Actually, in every town. It’s on Facebook.

Facebook Sports Stadium will debut at the National Football League (NFL) conference championship games and then the Super Bowl. After that, the social-media giant’s first sports product will cover most major events around the world.

With 1.55 billion users, an estimated 650 million of them sports fans, it seems a natural place to gather for the kind of passionate conversation that accompanies virtually every pass, tackle and kick.

“Sports is inherently social and has been since the

FACEBOOK STADIUM

beginning of time,” Facebook’s Dan Reed said. “Historically, to watch a sporting event, you root for or against, you’re watching it in the context of a physical stadium, and interaction is as essential as what is happening on the field. “Now, we can have that same interaction happening on a global scale through Facebook.” Last year Facebook launched “Trending Super Bowl,” and more than 65 million people joined the conversation worldwide. That went so well that the social-media giant decided to work on its first full-fledged sports product.

“We see the passion in the interactions. If you enter into this experience during a game, you will see a range

of emotions, trash talk, memes going around,” Reed said. “The same things happening in the stadium or a sports bar are happening on Facebook, and this allows people who are disconnected to interact as if they are watching together.” Users can conduct conversations with each other, get real-time stats, a live game clock, sanctioned photos and videos, team information and read commentary from media members.

“We think this complements the sporting experience,” Product Manager Steve Kafka said. “It helps people build followings and get a wider audience. All the content already is on Facebook. They don’t need to

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F, J , 

mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

seek this out, we are taking folks connected with the game—from the league, the teams, journalists—and we put all that content and analysis in one place, and users can follow it during the game.”

Facebook Sports Stadium features a live score and game clock at the very top of the page. Under the scoreboard are four tabs: Matchup, Friends, Experts and Stats.

“Matchup” provides a quick summary of what’s happening in the game, with a scoring summary and the most recent plays. Users can “Like,” comment and share every play. There also is a “Live” indicator at the top where videos are uploaded about the game.

“Friends” is a feed of what users’ Facebook friends are saying about the game. “Experts” features commentary from verified pages, including journalists, athletes and celebrities talking about the game. Next up for Facebook Sports Stadium after the conference championships and Super Bowl will be basketball, although Reed and Kafka weren’t providing details yet. A good guess would be March Madness. Then, the Summer Olympics in Brazil.

“We are going to make sure the product is ready for all the sporting experiences,” Kafka said. “This is just the beginning of a long journey for us.” AP

‘WE NEED FACTS’ ANDY MURRAY signs autographs after defeating Sam Groth of Australia in their secondround match on Thursday AP Thursday.

ANDRE AGASSI hopes—and believes—that tennis’s leaders will make sure match-fixing is not happening nowadays. AP

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B J G The Associated Press

ELBOURNE, Australia—Around the world, players, commentators and fans echoed the call of Roger Federer, who wants to know names of those suspected of match-fixing in a growing scandal that one ex-pro described as a “major wake-up call for the world of tennis.”

Many called for clarity, saying the public and players have a right to know who is suspected of cheating.

Others warned that the match-fixing scandal has the potential to damage the reputation of tennis, just like doping or corruption scandals have hurt professional cycling, athletics, baseball and soccer.

Martina Navratilova, the 18-time Grand Slam champion, tweeted: “We need facts, not suppositions.”

The scandal broke on Monday when the BBC and BuzzFeed News published reports—timed for the start of the Australian Open—alleging that tennis authorities have ignored widespread evidence of match-fixing involving 16 tennis players who have ranked in the top 50 over the past decade.

BuzzFeed titled its story, “The Tennis Racket,” and said that half of those 16, including a Grand Slam winner, were at this year’s Australian Open.

“This really casts a very dark shadow on our sport right now,” Mary Jo Fernandez said on ESPN, as part of a panel discussion on Wednesday on the controversy.

“Hopefully because the world is watching, something will be done about it. We need to flag who these players were,” said Fernandez, a three-time Grand Slam finalist, winner of two Grand Slam women’s doubles titles and two Olympic gold medals.

Federer was among the first to demand more information: “I would love to hear names,” the Swiss star said said on Monday at a post-match news conference. Referring specifically to the claim about a former Grand Slam winner, he asked, “Was it the player? Was it the support team? Who was it? Was it before? Was it a doubles player, a singles player? Which Slam? It’s so all over the place. It’s nonsense to answer something that is pure speculation.”

His comments have resonated with those who say not knowing leads to dangerous speculation.

“This is turning into a witch hunt,” said Patrick McEnroe, a former French Open doubles champion and captain of the US Davis Cup team who was in Melbourne commentating. No. 1-ranked Novak Djokovic was put on the spot spot on Wednesday at a postmatch news conference, where a reporter told him an Italian newspaper had just reported that he “wanted to lose” a match in Paris in 2007.

“You can pick any match that you like that the top player lost, and just create a story out of it,” Djokovic said.

“This is now the main story in tennis, in the sports world, there’s going to be a lot of allegations,” he said, calling it “just speculation” and saying “it is not true.”

Until now, the average fan may have had little idea that tennis is one of the most gambled on sports in the world, with bookmakers actively taking bets mid-match.

Between matches at the Australian Open, tennis experts have explained the mechanics of match-fixing, spelling out that it doesn’t necessarily mean throwing an entire match, but could involve taking money just to double-

fault or lose a set.

“We in the tennis world have all heard the stories about this going on at the low levels. No one knew it was happening at the Grand Slams,” McEnroe said. “Where there’s smoke, there’s fire. This is a major, major wake-up call for the world of tennis.”

The BBC and BuzzFeed report prompted an immediate news conference by tennis’ governing bodies on Monday in Melbourne Park, where representatives denied allegations that any evidence about matchfixing had been suppressed. Officials noted that the sport’s anticorruption division, the Tennis Integrity Unit, has pursued 18 disciplinary cases that resulted in life bans from the sport for five players and one official.

It was set up in 2008, after a surge of suspicious betting activity in tennis.

The problem for investigators, they said, is that match-fixing is very difficult to prove.

Many fans have also been shocked to learn that some of the sport’s top players have been approached and offered big money to throw matches.

Djokovic confirmed earlier in the week he was offered money to intentionally throw a match. The 10-time Grand Slam champion said that he was not directly approached but members of his support team were offered the money in Russia in 2007, an offer the player said was immediately rejected.

During a break in commentating for ESPN, Chris Evert said the scandal had deeply affected her.

“I have been so sad about this the last few days,” the 18-time Grand Slam winner said. “We as tennis players have always been so proud about the integrity of our sport.”

“Hopefully the truth will come out,” she said.

Andy Roddick thinks it will. The 2003 US Open winner tweeted that he and another retired pro have been engaged in a guessing game: “Text I got from another former tour pro, ‘we should see how many of the 16 betting guys we can name. I think I got at least 8-9.’”

It’s bound to come out, Roddick said in another tweet: “In the age of leaks and social media, I don’t think secrets exist.”

‘NEVER IN MY RADAR’ ANDRE AGASSI says match-fixing in tennis “never even made my radar” while he was on tour.

The eight-time Grand Slam title winner, who retired from the sport in 2006, said in a phone interview with The Associated Press that he never had any brush with the sort of corruption that was alleged in recent media reports and has been the main topic of conversation at the Australian Open.

Agassi also said he hopes—and believes—that tennis’s leaders will make sure match-fixing is not happening nowadays.

“I worry about that being a problem in any sport, because I think it poses an existential threat to the

very fabric of what sports is about,” Agassi said.

“I think every sport needs to take that incredibly seriously.” The BBC and BuzzFeed News published reports this week saying tennis authorities failed to thoroughly investigate evidence of match-fixing involving more than a dozen players who have ranked in the top 50 over the past decade. No players were named in the reports.

“In 21 years I played professionally, I can say, either based on my naïveté ïïveté or my focus on trying to be the best in the world, that it never made my radar at any stage in those 21 years,” Agassi said. “So I don’t know if I was unreachable, untouchable or just

MANY CALLED FOR CLARITY, SAYING THE PUBLIC AND PLAYERS HAVE A RIGHT TO KNOW WHO IS SUSPECTED OF CHEATING. OTHERS WARNED THAT THE MATCH-FIXING SCANDAL HAS THE POTENTIAL TO DAMAGE THE REPUTATION OF TENNIS, JUST LIKE DOPING OR CORRUPTION SCANDALS HAVE HURT PROFESSIONAL CYCLING, ATHLETICS, BASEBALL AND SOCCER.

SPORTS

purely in my own world, but it never even made my radar, whatsoever.”

In Australia, where the year’s first major tournament began on on Monday Monday, representatives of tennis’s governing bodies held a news conference to deny that any evidence connected to match-fixing was suppressed. During the Australian Open’s early rounds, player after player has left the court and headed to a news conference where the main line of questioning centers around corruption in their sport.

Roger Federer, owner of a record 17 major titles, called the reports “pure speculation,” pointing out the lack of details, including the names of any players

purported to be involved. “Of course, we [rejected] it right away. It didn’t even get to me,” Djokovic said.

Agassi thinks the Association of Tennis Professionals, Women’s Tennis Association and International Tennis Federation should look into the broader issue.

“I do believe and assume that the organizing bodies of any sport would treat this [subject] with the seriousness that it deserves, to protect the integrity of the game and also the fans of the sport,” Agassi said. “It needs to be treated that way. And it sounds, based on the reports and the conversations about it, that it will be addressed as such.” AP

‘₧1.4B lost to MRT 3 mishandling’

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LEANING up the mess at the Metro Rail Transit (MRT) Line 3 may take several years to finish, a task that could have been easily avoided if only the government did not mishandle the facility when it took over the maintenance component four years ago, according to MRT Holdings Inc. Chairman Robert John L. Sobrepeña.

Each of the train line’s stakeholders— from the owners to the government and down to the riding public—are all losers due to the government’s supposed mismanagement of the rail facility, he said.

We’re quite worried. We feel this is a danger to the riding public; not to mention the danger to the train system itself.”–Sobrepeña, on the Dalian-made railcars

The government, for example, lost at least P1.4 billion for awarding various maintenance contracts to different providers. Sadly, the company executive said, this does not include the economic cost of the dilapidated condition of the

train system.

“If Sumitomo Corp. was allowed to continue its maintenance from October 2012 to January 2019, the cost of the maintenance would only be P7.5 billion. In contrast, the C  A

Senate, House adopt each other’s bills to save time B J M N.  C

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HE two chambers of Congress have apparently found a way to make the most of the few remaining session days—sans major differences, they will just adopt each other’s version to save time.

Concrete examples are the bill creating the Department of Information and

Communications Technology (DICT) and the measure strengthening the Philippine Deposit Insurance Corp. (PDIC). The House adopted the Senate version of the PDIC, then the upper chamber adopted the approved DICT bill of the Lower House.

Speaker Feliciano R. Belmonte Jr. said it is not a strategy they took on, but is a good indication of the two chambers’ good working relationship, with just six

PESO EXCHANGE RATES n US 47.7820

session days left for the 16th Congress.

“It’s not a strategy [to only adopt measures and not go through a bicameral committee conference]. It just so happens that we agreed on both issues [regarding the two adopted measures],” he said.

“If there’s a difference between what they [Senate] are saying and what we [House of Representatives] are saying, we still have to pass [the bills] through the

bicam,” Belmonte added. Case in point is the proposed Customs Modernization and Tariff Act (CMTA), which was passed on Thursday at the bicam.

The bill aims to modernize customs and tariff administration through full automation of operations and, thus, reduce the opportunities for corruption and technical smuggling; and

STOCKS DROP TO 23MONTH LOW ON FOREIGN OUTFLOWS

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HILIPPINE stocks declined, sending the benchmark index to its lowest level in almost two years, as concern grew that high valuations and foreign withdrawals would weigh on this month’s worst-performing market in Southeast Asia.

The Philippine Stock Exchange index (PSEi) dropped 2.8 percent at the close in Manila, its lowest level since February 2014. Twenty-eight of its 30 stocks fell. The gauge, which entered a bear market last week after a 20-percent slide from a record high last April, has lost more than 12 percent this year.

Foreign investors have pulled $83 million from Philippine stocks in January, poised for a record 10th straight month of withdrawals, as uncertainty over China and slumping oil prices raise concern over global growth and damp demand for riskier assets. While the index’s valua-

2.8%

PSEi’s drop at the close of Thursday’s trading, its steepest decline since February 2014

tions have dropped 26 percent from last year’s peak, the nation’s equities still trade at a 17-percent premium to the MSCI Southeast Asia Index.

“Philippine stocks are among the most expensive in the region, and some investors are questioning if that is warranted,” said Jonathan Ravelas, the Manila-based chief market strategist at BDO Unibank Inc., the Philippines’s largest bank by assets.

“The Philippines is in a better shape than most economies in the region, but if investors S “S,” A

S “S,” A

n JAPAN 0.4083 n UK 67.7979 n HK 6.1035 n CHINA 7.2633 n SINGAPORE 33.2697 n AUSTRALIA 32.7881 n EU 52.0633 n SAUDI ARABIA 12.7419

Source: BSP (21 January 2016 )

BMReports BusinessMirror

A2 Friday, January 22, 2016

news@businessmirror.com.ph

PHL hotels told to form crisis teams for antiterror response   A

Deputy Minister Igde Pitana of Indonesia’s Ministry of Tourism said “everything is back to normal.”

Giri Adnyani, director at the Office of the Deputy for International Marketing for the Ministry of Tourism Ministry, added that “there have been no cancellations in hotel bookings. It’s good.”

Asean tourism ministers and officials of national tourism organizations are currently meeting in Manila, host of the Asean Tourism Forum (ATF).

The ATF is an annual gathering that brings together Asean member-countries to discuss innovations, trends and developments in the tourism industry and facilitate joint policy formulations to accelerate the growth of the region’s tourism.

While there have been no major terrorism attacks in the Philippines, many foreign governments often warn their citizens against traveling to Southwest Mindanao and Sulu where kidnap-for-ransom gangs operate.

The latest travel advisory from the United Kingdom, itself a victim of terrorist attacks only last year, cited a warning “from Philippine authorities…of a high terrorism threat in parts of the country, including: Palawan; Malay, Aklan (Boracay Island); the southern portion of the Negros island region; and a number of areas in Mindanao.”

At the World Travel Market in London in November 2015, experts from the UK’s National Counter-

Senate. . .

C  A

enact an enabling domestic legislation to make the Tariff and Customs Code of the Philippines compliant with the Revised Kyoto Convention. Senate President Pro Tempore Ralph G. Recto said the bill also adds tax-exemption privileges for returning overseas Filipino. It increases the tax-exempt value of balikbayan box packages from P10,000 to P150,000.

According to Belmonte, leaders of both houses are conducting consultations monthly to discuss priority measures of the Congress prior to their approvals.

“Unlike in the past [congresses], we manage to tackle priority bills monthly. Hindi naman kami blind to each other, nag kakausap kami madalas ni Senate President [Franklin] M. Drilon and then as a group, we meet once a

We’re not telling you to build fortresses because that would be counterproductive to the holiday experience [of guests].”—UK experts

terrorism Security Office briefed participants on the need for travel operators and hotels to set up firstresponse teams to deal with critical emergencies like terrorist attacks and kidnappings.

Aside from setting up crisismanagement committees, the counterterrorism experts also emphasized the need to “reduce the predictability of routes [when transferring tourists from planes to their resorts], work with the contracted transport party to ensure that the ‘coach’ is clean, and make sure that the luggage being transported are owned by the travelers and not someone who has sneaked it in.”

“We’re not telling you to build fortresses,” the experts said, “because that would be counterproductive to the holiday experience [of guests].” What is needed is adequate security preparation and management of risks.

Despite global terrorism threats, however, the United Nations World Tourism Organization just reported international arrivals were up 4 percent to 1.2 billion tourists. (See “Asean visitor arrivals up 5.1% to 102.2 million in 2015–UNWTO” in the BusinessMirror, January 19, 2016.”)

Meanwhile, Canizal also said the DOT will be coming up with plans to deal with hospital emergencies in island destinations.

“We are drawing up plans to make sure several major destinations will have quick emergency facilities, or at least ways to airlift patients quickly to hospitals,” he said.

He added there already are available air ambulances in the country, which can deal with such types of emergency airlifting, and these can be used by local hospitality establishments, as well.

Netizens have recently been pillorying the local governments of Coron in Palawan and Boracay in Aklan for the absence of emergency hospital facilities on site to deal with medical emergencies, or tour guides equipped with emergency medical training.

Last year, for instance, a tourist died in Coron after allegedly stepping on a poisonous sea urchin, while just this year, while several accidents have already been reported from Boracay ranging from drowning, internal hemorrhage, etc., with victims expiring due to the distance of the resort island from any major hospital.

month; we understand each other as to the status of various bills and then we talk para makita ’yung pareho naming stand,” he added.

measure “aims to make the PDIC more effective in carrying out its mandate to protect depositors.”

The bill is seen to boost the state deposit insurer’s capacity to protect depositors of the Philippine banking system through the increased minimum deposit insurance coverage (MDIC) and the adoption of corollary measures that will reinforce the institutional and financial capabilities of the PDIC. Osmeña, also principal author and sponsor of SB 2976, said “depositors and creditors of closed banks have to bear the adverse consequences of bank closures. They experience significant loss of their hard-earned money and disruption of their business.”

He saidthe passage of the bill into law would reinforce the authorities of the PDIC so it could better provide “safety nets” for the bank’s financial system.

Under the measure, Osmeña said the PDIC would be able to assist banks in danger of closing while they are still operating, and not after they have been closed by the Bangko Sentral ng Pilipinas.

PDIC charter

DEPUTY Speaker and National Unity Party Rep. Roberto Puno of Antipolo said members of the lower chamber have unanimously adopted the Senate Bill (SB) 2976.

SB 2976, or an act amending Republic Act 3591, or the PDIC Charter and other related laws, enhances the resolution and liquidation framework for banks and banking institutions, as well as strengthens the independence, authority and financial capability of the PDIC. It will be now transmitted to President Aquino for signature.

Sen. Sergio R. Osmeña III, chairman of the Senate Committee on Banks and Financial Institutions, has said the

Creation of DICT

THE bill creating the DICT is among the piority bills of the 16th Congress.

It states that the DICT shall be the primary government entity to plan, promote and help develop the ICT sector, and ensure reliable and cost-efficient communications facilities and other multimedia infrastructure and services in the country.

The measure seeks to promote the utilization of ICT as a vital tool for nation-building and economic growth “that is government-enabled, private sector-led, citizen-centric and market-based.”

The bill also aims to integrate the management of two diverse concerns, transportation and communications, into one department, as well as develop a Philippine information and communications technology based on world standards, thereby ensuring a better future for all Filipinos.

The DICT shall, among others, formulate, recommend and implement national policies and guidelines in the ICT sector that will promote wider use and development of ICT, and its applications, such as e-commerce, in coordination with the Department of Trade and Industry; and represent and negotiate for Philippine interests on matters pertaining to ICT in international bodies.

AUSTRALIA OFFICIALS EXPLAIN Navy Captain Brad White, Australian defense attaché and newly assigned Australian Ambassador to the Philippines Amanda Gorey answer questions from financial reporters regarding issues connected with the South China Sea. White said they are only doing their business sailing across the West Philippine Sea and are not involved in the roving patrols conducted by the US Marines and Philippine Marines. He further said their aid in the Philippines will continue, such as training of soldiers and Mindanao aid. Also, the Australian Embassy continues to support the country through trade and business by guiding Australian companies to partner with public and private institutions, such as the North Luzon Expressway-South Luzon Expressway connector road project, currently handled by Australian company SMEC. STEPHANIE TUMAMPOS

‘₧1.4B lost to MRT 3 mishandling’ C  A

transportation department-appointed maintenance contracts have cost, and will cost, the government P8.9 billion, or a huge difference of around P1.4 billion,” he said.

The offer of the Japanese firm —the builder of the train facility — also came with the provision of spare parts, upgrade of the signalling system, overhauling and general maintenance. The government declined the proposal as it was “too expensive.”

“The recent maintenance contracts are truly disadvantageous to the government. If Sumitomo’s proposal was accepted, the MRT will be left without any problem on maintenance, parts, service and disruptions. We could have continually served the 600,000 riders on Edsa.

We would not have this traffic mess on Edsa,” Sobrepeña said.

Currently, the train line is working at half its capacity. There are about 16 train sets operating at the MRT. This means that of the 73 light-rail vehicles that the train line has on its depot, only 48 train cars ply the North Edsa-Taft Avenue route.

Sobrepena also scored Transportation Secretary Joseph Emilio A. Abaya for supposedly giving false hopes to the riding public, saying that the MRT projects that the government is currently undertaking are “rushed” to “cover up” the state’s errors in the past.

To be more specific, the train executive said the government entered into an unpropitious train supply contract with Dalian Locomotive and Rolling Stock Co. of China to the tune of P3.8 billion.

Stocks. . .

“We have been warning for several years now that there is a great danger against the purchase of Chinese trains because of the fact that Dalian has never manufactured a double-articulated lightrail vehicle. The mistake of purchasing this will cost the government P3.76 billion, but more important, it may cost the lives of those who could be affected if the trains are not properly tested and set up in the system,” Sobrepeña said.

Apparently, the new trains from Dalian—the third car arriving any time soon—are not properly tested in China. The trains should have run at least 5,000 kilometers before being transported to the Philippines, a digest of the terms of reference of the contract showed.

“We’re quite worried. We feel this is a danger to the riding public, not to mention the danger to the train system itself,” the railway executive said.

To test run the new train cars, the coaches should run at about 65 kilometres per hour (km/ph). The transport department decided to move the testing here in the Philippines, on the very tracks of the MRT. This according to Sobrepeña, would be a disservice to the public, as it poses grave danger to the train facility itself.

“The maximum speed of the MRT now is about 40 km/ph due to its tracks. Now, how are they going to test these trains with tracks that cannot accommodate 65 km/ph? These trains could derail, and it can fall on anyone along Edsa,” he explained.

Also, testing the new trains from China at the main line during nonrevenue hours means that the railway

facility “is not being maintained.”

“If we force these trains to run along our tracks, it could damage, or even destroy, the MRT. Metro Manila will be without a main line,” the businessman said.

Transportation officials earlier said the new trains are targeted to be deployed by end-March, assuring the public that relief on the mess at the railway facility is on its way.

“The announcement is grossly irresponsible. They are giving the wrong information to the public and getting the hopes of people up. If they force to use it, it will be a danger to the riding public,” Sobrepeña said.

For all these, the owners of the train line are seriously weighing their legal options on how to move forward with the government’s mishandling of their asset, although the private company is still open to reconciliation.

Abaya said the allegations of Sobrepeña only point out one thing: that the private owner of the train facility is trying to find a scapegoat for its mistakes.

“Maybe he should read the contracts first. If he only did his responsibility and his obligations to the people, then maybe he can answer his questions,” he said in a text message to the BM.

The MRT is in a chronic state of decay, with the 16-year-old trains already maxed out of their rated capacities and the rails already experiencing difficulties in handling hundreds of thousands of passengers per day. Several proposals from the private sector have been submitted before the transport department, sadly, none of them has been responded to with clarity.

C  A

have sold holdings in other markets, then they have to also sell here because that would have raised the weighting of Philippine stocks. This current selloff is exaggerated.”

SM Investments Corp., the nation’s most valuable listed company, dropped 5.1 percent and was the biggest drag on the benchmark index, while Ayala Land Inc., the second-largest developer, slid 4.6 percent, nearing a two-year low.

The withdrawals by foreign investors this month follow a record sale of $1.19 billion of local equities in 2015, the nation’s first outflow since 2008. The Philippine stock index fell 3.9 percent last year. At 14.7 times its projected 12-month earnings, the PSEi’s valuation is the lowest in three years and matches the FTSE Bursa Malaysia KLCI Index’s multiple. It compares with 12.6 times for the MSCI South East Asia Index. Bloomberg News

NOT a happy new year thus far, as what the officials of the local bourse hoped for at the start of trading this year, as shown in this January 4 file photo, with the Philippine Stock Exchange emerging as the worst-performing market in the region this month. ALYSA SALEN

news@businessmirror.com.ph

BMReports BusinessMirror

Friday, January 22, 2016

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Belmonte gives up on pension-veto override B J M D C.

As you can see, it’s hard to PEAKER Feliciano Belmonte muster a quorum now and we Jr. on Thursday dashed all need two-thirds votes of everybody hopes of over 2 million Social [to override the veto],” Belmonte said.

S

Security System (SSS) pensioners who are praying for Congress to override President Aquino’s veto of the bill increasing their monthly pension by P2,000.

Belmonte, in an interview, admitted it would be difficult for the House of Representatives and the Senate to gather the needed two-thirds votes to override the presidential veto.

“As you can see, it’s hard to muster a quorum now and we need twothirds votes of everybody not just the people who are present but everybody [to override the veto],” Belmonte said.

Under Article VI, Section 27 of the 1987 Constitution, Congress could pass a bill into law despite the President’s veto if two-thirds of the members of each chamber vote for its approval.

At least 194 of the 290 remaining House members would have to vote to approve a vetoed measure.

House Majority Leader and Liberal Party Rep. Neptali Gonzales II also admitted that overruling President Aquino’s veto was next to impossible.

“In my experience as a member of the House, there were no records that Congress ever override the President’s veto because it will require two-thirds vote of all the members of both houses of Congress...it will be hard because of this requirement of the Constitution,” he said.

Bayan Muna Rep. Neri Colmenares, one of the principal authors of the pension bill, said the Makabayan bloc will file a resolution overriding the presidential veto on Monday.

“We are challenging the leadership of the House of Representatives and the Senate to override President Aquino’s veto. The Makabayan bloc will still push through with the campaign to override the veto of the P2,000 pension hike,” Colmenares said.

“There are several members of the lower chamber, some came from the majority bloc, texting me to say that they will support my proposal to override the President’s veto,” he added.

At least 211 lawmakers have voted to pass the P2,000 pension hike on final reading at the lower chamber.

Colmenares said the P2,000 pension hike is very reasonable and is badly needed by pensioners and their dependents.

Earlier, Nationalist People’s Coalition (NPC) Rep. Sherwin Gatchalian of Valenzuela said his political party is considering the call for an override of the presidential veto.

“Actually, the NPC is considering the [override] call as a party. We believe our senior citizens should get fair assistance from the government.

We’re contemplating the override. The NPC is the second biggest party [following the Liberal Party] in Congress with over 50 members but we’re still studying that until now,” Gatchalian said.

Belmonte said members of the ruling Liberal Party, of which he is vice chairman, are free to decide their own actions.

“As far as I’m concerned [they can] decide on their own,” he said.

Liberal Party Rep. Roman Romulo of Pasig said the SSS pension fiasco could have been avoided if the administration had made use of the Legislative-Executive Advisory Council (Ledac) to iron out differences on the proposed law.

“The Executive could have made its position clear earlier on, through the Ledac, so the issues now being raised in defense of the President’s veto would have been threshed out and settled,” Romulo said.

“The ruling majority have raised the expectations of our senior citizens and their families by passing this proposed law and will, as it is said, reap the whirlwind,” Romulo said.

The lawmaker, meanwhile, said that he will back a motion to override the President’s veto but admitted that it may not pass because the ruling majority has bowed to the will of the Executive.

“Our credibility as an institution, as one of the three pillars of government, has been eroded because we do not stand by our word. Congress proposes but the Executive disposes,” Romulo said.

“The Ledac is there precisely to make sure that we, who are sworn to serve the people, do not waste public funds by going through exercises in futility,” he said.

Belmonte said the Senate should pass the House of Representativesapproved measure empowering the SSS board to increase contributions of its members so the pension agency could provide a pension hike.

“I urge the Senate to simply approve our second bill enlarging the powers of the SSS board, and once it becomes law, they can increase the pension without Congress intervention,” he said According to Belmonte, House Bill 6112 will help SSS to avoid bankruptcy as a result of the pension increase proposal.

The leadership of the lower chamber is pushing for P1,000 pension increase as compromise to the P2,000 pension hike, which was recently vetoed by President Aquino.

“We want to pass it [House Bill 6112 into law] now...[so the SSS] will give the P1,000 pension hike,” Belmonte said, adding, “the SSS board itself can approve it [the pension hike] without having to pass through Congress once the bill empowers the SSS board to increase premiums is passed.”

Meanwhile, Sen. Serge Osmeña observed that Mr. Aquino did the right thing in the Congress-approved SSS pension-hike bill without specifying its funding source, as doing so would have also influenced bond issues and trigger higher interest rates.

According to Osmena, there were pitfalls in the bill missed by administration critics attacking President Aquino for depriving SSS pensioners of the additional P2,000 benefit, instead of approving a popular measure favoring retirees.

He said the SSS pensioners unknowingly paid the sacrifice that saved the Philippines from a potentially disastrous credit downgrade.

“If the President did not veto the bill, our ratings by Standard & Poors, Moodys, will go down. And that will affect our bond issues,” the senator said.

Osmeña added: “Our interest rates will go up. So we really have to follow the advice of our financial managers, in this case, the Department of Finance, when they say you can’t sustain this...”

Osmeña clarified that he voted in favor of the bill and would vote anew to override the presidential veto if a funding source for the P2,000 pension hike is specified. Otherwise, he said it would be a “suicide” move that would adversely affect the 31 million members of SSS. As for the reported fat salaries and hefty bonuses collected by SSS

officials, Osmeña suggested that the Senate can conduct an inquiry into it.

“If they want that investigated, we can investigate but that is very small compared to P56 billion a year,” referring to the cost of the additional P2,000 monthly pension to be paid SSS member-retirees.

“If you take one of their bonuses into consideration, it would add up from P50 million to P100 million a year, but you cannot com-

pare that to P56 billion,” he said.

This developed even as senators are inching closer to mustering the 16 signatures needed to meet the two-thirds requirement to override President Aquino’s veto of the pension hike bill.

Sen. Francis Escudero, said to be one of its initiators, indicated that at least 11 senators have already signed the override resolution, but declined to name the signatories.

BMReports BusinessMirror

A4 Friday, January 22, 2016

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Agriculture grew less than 1% in 2015

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B M G P

AMAGE caused by weather and unrealized planting intentions brought about by the prolonged dry spell and lack of water affected the country’s agricultural productivity in 2015, slowing the sector’s growth to 0.11 percent, latest data from the Philippine Statistics Authority (PSA) showed.

On a quarterly basis, PSA data showed the sector contracted by 0.96 percent from October to December last year.

“The sector’s performance was negatively affected by the long dry spell and damage caused by Typhoon Lando [international code name Koppu],” the report said.

The crops and fisheries subsectors reported drops in output in 2015, while the livestock and poultry industries showed positive growth for the whole year.

Based on PSA data, production in the crops subsector decreased by 1.95 percent for the whole of 2015, and declined by 2.69 percent for the last three months of the year. It accounted for 51.83 percent of the total agricultural production during the October-to-December period.

Palay production for 2015 was recorded at 18.15 million metric tons (MMT), 4.31 percent lower than the

country’s output last year at 18.97 MMT. Corn output also slumped by 3.24 percent to 7.52 MMT, from 7.77 MMT in 2014. The PSA said the palay and corn industries suffered the most from the long dry spell and Lando.

The PSA added that Lando pulled down the palay production of the country’s top rice-producing provinces, such as Nueva Ecija, Mountain Province, Apayao, Kalinga, Aurora, Bulacan, Tarlac and Pampanga. Diseases and lack of water also caused palay production to drop in other areas.

The decline in corn output was also attributed by the PSA to the typhoons that devastated the country in 2015, the dry weather and lack of water supply.

Edilberto M. de Luna, agriculture assistant secretary for Field Operations and national coordinator of the Rice and Corn Program, said in an

earlier interview that rice and corn production in 2015 dropped because of foregone planting by farmers, in anticipation of the effects of El Niño.

The PSA report said fisheries production fell by 1.96 percent during the January-to-December period.

For the fourth quarter of the year, the subsector’s production was recorded to have slipped by 4.28 percent. It contributed 16.38 percent of the total output during the period.

All fisheries products, except tiger prawn and seaweed, posted declines in production in 2015.

Meanwhile, the annual growth of the livestock and poultry subsectors reached 3.83 percent and 5.74 percent, respectively. Livestock production accounted for 17.07 percent of total agricultural output, while the poultry sector contributed 14.72 percent. Production levels of all components in the livestock sec-

tor—except carabao—and the poultry sector—except duck—showed improvements in 2015.

Agriculture Undersecretary for Livestock Jose C. Reaño said the growth of the two subsectors can be attributed to the improvement in the productivity of breeders and growers.

Based on the same report from the PSA, the gross value of production (at current prices) during the fourth quarter amounted to P448 billion, 6.64 percent lower than the 2014 level.

The bulk, or P259.7 billion, of this value was contributed by the crops subsector, 11.05 percent lower than the production value posted in 2014. The gross value of output of the livestock subsector was reported at P72.1 billion, poultry subsector at P53.4 billion, and fisheries subsector at P62.8 billion.

Criminals, not ISIS, present in Mindanao–British envoy

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HERE is no Islamic State of Iraq and al-Syria (ISIS) in the Philippines and those seen in photographs are criminals hiding behind masks, British Ambassador to the Republic of the Philippines Asif Ahmad said.

“The way they have spread themselves is through people aspiring to the ideology or people imitating what they have,” Ahmad told reporters he invited to his house in Makati. “We’ve already seen it over here, people just waving black flags just to hide the fact they they’re just criminals who kidnap somebody but they want to project an aura.”

He added that ISIS is not some sort of multinational corporation that needs to have subsidiaries or private firms.

However, he warns that “if the situation in the South does not change, “one can’t rule out the fact that people would look for alternatives, particularly those who are exposed to social media, who have abilities to interact with other students and those who have freedom of traveling and going to some of these places of radicalization.”

Failure to pass the Bangsamoro basic law (BBL), he said, “would mean another decade that is lost in the process of negotiation, with nothing coming out.”

The government’s peace-panel head reminded lawmakers that the passage of the BBL will help counter extremist threats.

Peace negotiator Miriam Coronel-Ferrer issued the statement days after suicide bombers attacked a coffee shop in Jakarta, which left eight people killed, including the perpetrators. ISIS, a Salafi jihadist militant group that follows an Islamic fundamentalist, Wahhabi doctrine of Sunni Islam, claimed responsibility for the attack.

“The Comprehensive Agreement on the Bangsamoro and the draft BBL are social-justice measures, but from the global-security perspective, these are also a containment measure against jihadist extremism,” Ferrer said in a statement.

Ahmad says the development in the South is important because the

4.31%

Drop of PHL rice output in 2015

Dr. Rolando Dy, executive director of the University of Asia and the Pacific’s Center for Food and Agribusiness, told the BusinessMirror that the 2015 growth rate of Philippine agriculture was better than he expected.

“I projected a low negative of 1 percent, so this is a better turnout.

[The reason for the minimal growth] is basically weather or El Niño-related. [The country experienced] low rainfall in the last 12 months,” Dy said in a text message.

The strong El Niño episode is ex-

Comelec issues initial list of presidentiables

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AHMAD

We’ve got homegrown terrorism as issue so we are not speaking from a position of some sort of superiority. This is a challenge facing us all.”—Ahmad history of the Philippines, in his view, is not fully or properly understood or acknowledged.

“If you look at your own education, my guess is your reading of history starts when Magellan arrived, not what the Philippines looks like before.”

He explained that the Philippines looks like Malaysia, Indonesia, or Brunei, and that the settlements like Manila and coastal areas before the arrival of the Spaniards, are predominantly Muslim.

“Internally, the country is what you called indigenous people. It was the arrival of Christianity that started the change of demographics of this country.”

Ahmad said Catholic inf luence “is a bit controversial but it is worth stating because people get

so obsessed with the constitution over here.”

“The constitution here separates the Church and the state and I don’t see any separation of Church and state in this country,” he said.

“It’s the way it is; it is a fact. What I am saying is that you can’t pretend one thing and live up to another.”

Ahmad said he asked friends in the Department of Health how they adjust the curriculum for different communities and weighing which education is provided in schools.

“It’s interesting. In areas which are predominantly Muslim in the South a lot of adjustments have been made in terms of curriculum.

But when you get to communities closer to Manila where there might be 30 percent 40 percent Muslim, the curriculum default is Catholic.”

According to Ahmad, they believe that the United Kingdom itself has up to 600 to 700 Britons who have gone off to fight in Syria.

“We’ve got homegrown terrorism as issue so we are not speaking from a position of some sort of superiority. This is a challenge facing us all.”

Ahmad referred again to photographs appearing in social media showing propaganda video featuring an alleged secret Filipino jungle training camp.

Several jihadi commanders are shown in the video, urging Filipinos to travel to Syria to join ISIS and before revealing the group have already started their own terror camp in the Philippines.

The footage shows men claiming to be members of the “Soldiers of the Caliphate in the Philippines” working on their fitness and agility by completing a series of assault course drills.

But while the relatively new Ansar al-Khalifa had extorted from businessmen and stolen cattle from farmers, it had no proven links with the Islamic State, national military Spokesman Col. Restituto Padilla was quoted in a news report as saying. Recto Mercene

pected to gradually weaken through spring (March to May) 2016 and El Niño-Southern Oscillation (Enso)neutral is favored by May to July 2016, the Philippine Atmospheric, Geophysical and Astronomical Services Administration said, quoting the Climate Prediction Center and International Research Institute consensus as of January 18.

Enso-neutral refers to a period when neither El Niño nor La Nina is present. Data from the Department of Agriculturre as of August 13 showed the country’s agriculture sector has suffered a total of P3.32billion production loss due to El Niño.

The country’s corn industry posted the biggest production loss, currently pegged at P2.21 billion.

Damage to the rice sector reached P1.09 billion, high-value crops at P19.56 million and livestock sector at P11,000.

HE Commission on Elections (Comelec) released on Thursday initial certified list of candidates for the coming May 9 elections.

In its web site, the Comelec included eight names of presidentiables, led

by Vice President Jejomar C. Binay of the United Nationalist Alliance (UNA). Also in the list are Sen. Miriam Defensor-Santiago of the People’s Reform Party (PRP) and Davao City Mayor Rodrigo R. Duterte of Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban). Mel Mendoza of the Pwersa ng Masang Pilipino (PMP), Sen. Grace Poe (Independent) and Mannuel A. Roxas II of the Liberal Party (LP) were also in the list. Likewise, OFW Family Club party-list Rep. Roy V. Señeres of the Partido ng Mangagawa at Magsasaka-Workers and Peasants Party (PMM-WPP) and Dante Valencia (Independent) were in the initial list.

It can be recalled that a total of 130 individuals filed their Certificates of Candidacy (COCs) for president last October.

For the vice-presidential race, there were six names who made it in the initial list out of the 19 individuals who earlier filed their COCs. They are independent-running Sen. Alan Peter S. Cayetano, Francis G. Escudero, Ferdinand Marcos Jr. and Antonio F. Trillanes III. Also in the list for vicepresidentiables are Sens. Gringo B. Honasan II of UNA and LP Rep. Leni G. Robredo of Camarines Sur .

Back in October, a total of 19 individuals filed their COCs for vice president.

Meanwhile, a total of 52 names were included in the initial list of senatorial candidates of the commission.

They are the following: Raffy Alunan (Independent), Ina Ambolodto (LP), Tonyboy Aquino (Independent), Godofredo Arquiza (Independent), Levito Baligod (Independent), Greco Belgica (Independent), Walden Bello (Independent), Sandra Cam (PMP), Joel Catmon (PGRP), Mel Chavez (PMM-WPP)-Neri Colmenares (Makabayan), Leila de Lima (LP), Francisco

Domagoso (PMP), Frank Drilon (LP), Larry Gadon (KBL), Win Gatchalian (NPC), Dick Gordon (Independent), Teofisto Guingona III (LP), Risa Hontiveros (Akbayan), Princess Jaafar (Independent), Eid Kabalu (Independent), Lorna Kapunan (Aksyon), Princess Jacel Kiram (UNA), Alma Moreno (UNA), Ping Lacson (Independent) and Juror Lagare (Independent).

Also in the list of senatorial candidates are Rey Langit (UNA), Mark Lapid (Aksyon), Dante Liban (Independent), Romeo Maganto (Lakas), Edu Manzano (Independent), Allan Montaño (UNA), Ramon Montaño (Independent), Getulio Napeñas (UNA), Susan Ople (NP), Emma Orozco (Independent), Sergio Osmeña III (Independent), Manny Pacquiao (UNA), Coop Paez (Independent), Samuel Pagdilao (Independent), Jovito Palparan Jr. (Independent), Francis Pangilinan (LP), Jericho Petilla (LP), Ralph Recto (LP), Roger Rodriguez (Independent), Martin Romualdez (Lakas), Roman Romulo (Independent), Dionisio Santiago (Independent), Vicente Sotto III (NPC), Francis Tolentino (Independent), Joel Villanueva (LP) and Miguel Zubiri (Independent).

A total of 172 individuals filed their COCs for Senator last October.

Aside from the candidates for president, vice president and senator, the Comelec also released the initial list of candidates for party-list as well as local candidates.

“The certified list of candidates, as posted, is merely an initial list and subject to editing,” Comelec noted.

The commission said the list is still subject to changes since there are still those who are awaiting final resolution of the disqualification cases against them. “The list is subject to the outcome of the various cases/issues pending before the Commission,” it pointed out. The Comelec release of the initial list of candidates to give them the opportunity to check the accuracy of their names before the printing of the ballots starting February 1. Joel R. San Juan

AseanFriday BusinessMirror

Editor: Max V. de Leon

Friday, January 22, 2016 A5

‘Great grandfather’ dies: Bad omen for Vietnam?

Thai bargain hunters join Asian gold-buying spree as prices drop

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COMMUNIST Pioneers’ league members play music to welcome delegates during the opening ceremony of the Communist Party of Vietnam’s 12th Congress in Hanoi, Vietnam, on Thursday. Vietnam’s ruling Communist Party on Thursday opened an eight-day congress to name the country’s new set of leaders, who will determine the pace of critical economic reforms and relations with key trading allies, China and the United States. AP

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GUYEN VAN MINH remembers the first time he saw the rare, giant turtle of Hanoi’s Hoan Kiem Lake 40 years ago. He was 16 and excited to see the creature linked to the tale of a magical sword used to vanquish a Chinese army in the 15th century.

“He was as large as a big bamboo basket,” Minh said as he sat on a bench at the lake.

“Great grandfather turtle is long known as being sacred. Whenever he surfaces there’s an important event.”

The turtle, the last of four known to be in the lake, indeed appeared on Tuesday afternoon—but was lifeless. The demise of the turtle known as “great grandfather” is viewed as inauspicious as Vietnam’s Communist Party meets to pick new leaders, a gathering that occurs every five years. In a country where myth, mysticism and history loom large, the turtle’s death has spurred chatter on the streets and on social media.

“This morning some retired state officials exercising on the street were afraid that a strange event might occur,” Minh, a security guard, said on Wednesday.

“I am worried.”

Revolutionary general

THE congress formally opened on Thursday, as Prime Minister Nguyen Tan Dung and current General Secretary Nguyen Phu Trong compete for the post of general secretary. Officials will cast their votes next week to pick the party chief and other leaders, and pass a socioeconomic plan for the next five years.

In an opening speech, Trong warned that Vietnam risks falling behind regional economies and needs to step up its competitiveness. It will increase resources for defense as it’s “critical” for the nation to strengthen national defense and maintain

Great grandfather turtle is long known as being sacred. Whenever he surfaces there’s an important event.”

—Vietnamese guard security, he said.

The new slate will be closely watched to see if the leaders take Vietnam further away from China—as disputes with its giant Communist neighbor simmer over contested territory in the South China Sea —and closer to the US, a former war foe.

China and Vietnam fought a brief border war in 1979.

Local papers widely reported the turtle’s death on Wednesday. A party official was cited in official media as blaming cold weather and saying it was not a bad omen.

Turtle watchers, though, point out it surfaced in public as Vietnam buried national hero and revolutionary general Vo Nguyen Giap in 2013. A turtle died in 1967 and was seen by some to have foreshadowed the death of Ho Chi Minh, the Communist regime’s founder, two years later, said Ha Dinh Duc, a retired biology professor who has tracked the turtle for more than two decades.

Turtle god THE creatures in the lake are “ believed to be manifestations of the Golden Turtle God,” a deity that’s helped the country thwart enemies, the Thanh Nien newspaper reported in 2011 when officials rescued the turtle to treat it for lesions. It was then more than 2 meters long and weighed 169 kilograms, Duc said. The turtle was also found to be female, according to state media, though it’s usually referred to as male.

“Speaking about great grandfather turtle makes me want to cry,” said 78-year-old Nguyen Ba Dan, who sells paintings and calligraphy from a bench at the lake. “Great grandfather turtle is a symbol of Hanoi and of our country.”

Generations of Vietnamese children are taught that Emperor Le Loi was given a sword from heaven used to evict Chinese invaders in 1427. While boating on the lake after his victory, a turtle god surfaced to take back the blade. The Lake of the Returned Sword, its translated name, is now a tourist spot.

LONG Bangkok’s bustling Yaowarat Road, where Chinese traders haggled over gold with Siamese merchants more than a century ago, customers crowd the counters of jewelry shops looking for bargains.

Like the rest of Asia, which accounts for more than 60 percent of the world’s gold buying, the people of Thailand are snapping up necklaces, bracelets and ingots at the start of the year, adding to demand from Western investors who are buying bullion as a haven from financial turmoil. Business is brisk for shop owners like Sathira Phuakpraphun, especially after global prices fell last month to the lowest in more than five years. He needed a new supplier because the old one ran out just as demand picked up before Chinese New Year in February.

“Gold is cheap,” said 35-year-old Sathira, after ordering 10 kilograms of bars and jewelry for his new shop near the airport. “I’m buying now because I expect prices to increase before the New Year.”

Demand is accelerating in Thailand, where people have long considered gold a valued gift and a way to preserve wealth, no matter how small. Rising imports by Southeast Asia’s top consumer underscore the flow of bullion from west to east that helped make China and India the biggest users. Switzerland was a net exporter in November for the first time in a year, with 37 percent of shipments going to China and Hong Kong and 48 percent to India, UBS Group AG has said.

Cheaper bullion

GOLD has declined for three years and slumped more than 40 percent from its record in 2011, as equity markets rallied and the prospect of rising US borrowing costs eroded the appeal of an asset that doesn’t pay interest. Holdings in exchange-traded funds fell to the lowest in almost seven years.

Now bullion is climbing. Prices have

added more than 4 percent since they touched $1,046.44 an ounce last December 3, the lowest level since February 2010. Turmoil in global financial markets has boosted demand for a haven and investors have increased assets in exchange-traded funds by more than 3 percent since the start of January, data compiled by Bloomberg show.

Before prices strengthened, Thailand was already stocking up. Purchases expanded 7 percent from a year earlier to 172 metric tons in the first 11 months of 2015, while sales overseas totaled 120 tons, government data show.

Consumption in India and China rose 13 percent in the third quarter from a year earlier, according to data from the London-based World Gold Council.

Expanding imports

THAILAND’S biggest buyer, YLG Bullion International Co., will boost purchases by about 25 percent to 160 tons this year, CEO Pawan Nawawattanasub said in an interview in Bangkok on January 13. MTS Gold Group, another top importer, will increase shipments by more than 40 percent to 50 tons, Managing Director Golf Hirunyasiri said. Both companies also export gold.

The country’s people have proved persistent bargain hunters. When global prices dropped 6.8 percent last November, the most in more than two years, MTS imported as much as 1.5 tons a week to meet surging demand, Golf said.

“Thai people love gold because this is our culture,” Pawan said. “Everyone holds some gold, no matter how big or how small.”

Gold stores and goldsmiths are found throughout the country. Golf from MTS estimated there are about 7,000 shops, including pawn and mom-and-pop outlets. That’s approaching the number of 7-Eleven convenience stores, which total around 8,600, according to CP ALL Plc., the operator in Thailand. Bloomberg News

‘High hopes’

ON social-media sites, Vietnamese pondered what the death might mean for the party meeting, with many calling it a bad omen. Posts on the Voice of America’s Vietnamese Facebook page said it presaged everything from a Chinese invasion to the collapse of the Communist Party.

“The turtle was responsible for keeping the valuable sword by Emperor Le Loi and awaited a talented leader so he can hand the sword over, but he saw no one after decades,” Facebook user Viet Nguyen posted on Tuesday. As for Minh the security guard, he says he is optimistic despite his sorrow for the turtle.

“I have high hopes for this party congress —my country is opening up its doors to welcome the incorporation into Asean and turn a new page for the country,” he said, referring to the Association of Southeast Asian Nations. “I hope the party congress will run well so that more tourists will come, the country moves forward and the laborers will benefit.” Bloomberg News

INDONESIAN President Joko Widodo (left) inspects a model of the high-speed train, which will connect the capital city of Jakarta to the country’s fourth-largest city, Bandung, with President of China Railway Corp. Sheng Guangzu (right), Chinese State Councillor Wang Yong (second from right) and Chinese Ambassador to Indonesia Xie Feng (third from right) during the groundbreaking ceremony for the construction of its railway in Cikalong Wetan, West Java, Indonesia, on Thursday. AP

Indonesia starts construction of Jakarta-Bandung high-speed rail line

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NDONESIA broke ground on Thursday on a new rail line between the capital Jakarta and Bandung, officially marking the start of three years of construction on what is expected to be the first high-speed rail service to operate in Southeast Asia.

The 142.3-kilometer (88.4-mile) railway worth $5.5 billion is being constructed by PT Kereta Cepat Indonesia-China, a joint venture between an Indonesian consortium

of four state-owned companies and China Railway International Co. Ltd. The groundbreaking ceremony was presided over by Indonesia’s President Joko “Jokowi” Widodo, who signed an inscription on a large stone in Walini, a West Java town, and location of one of the railway’s eight stations. The rail deal was signed last October after Indonesia selected China over Japan for the project.

China agreed to complete the railway without using Indonesian govern-

ment money or requiring a government guarantee for loans. Indonesian companies have a combined 60-percent stake in the project.

Jokowi said not using the state budget for the rail project in heavily populated Java meant money wasn’t taken away from infrastructure projects in other parts of Indonesia, a sprawling archipelago. He said other railways are under construction in Sumatra and Sulawesi, while others are planned for Papua and Kalimantan.

Also on hand for the groundbreaking was Chinese State Councilor Wang Yong, who arrived on Wednesday and will also meet with Jokowi. The trains are expected to start operating in early 2019, with speeds of 250 km (155 miles) an hour, and a fare of about $16 for a journey of about 40 minutes. The existing trains to Bandung, the capital of West Java province, take about three hours and cost about $8. The Jakarta-Bandung line is part of a 750-km (466-mile)

high-speed train plant that would cut across four provinces on the main island of Java and end in the country’s second-largest city of Surabaya.

Several Southeast Asian countries are looking to replace or update aging rail networks, provoking fierce commercial competition between Japan and China, which have expertise in developing high-speed trains.

A line linking Singapore with Kuala Lumpur in Malaysia is expected to be finished in 2020.

Jokowi, who came to power in late 2014, has ambitious plans to improve Indonesia’s infrastructure, which could boost manufacturing and create hundreds of thousands of new jobs. The Indonesian state-owned companies in the joint venture with China are construction company PT Wijaya Karya, railway operator PT Kereta Api Indonesia, toll-road builder PT Jasa Marga and plantation company PT Perkebunan Nusantara VIII. AP

The World BusinessMirror

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

MERKEL IN PERIL

Window to tame E.U.’s refugee crisis closing €12.1B apparent successor or challenger in her party, and the man most often touted as a potential heir, Finance Minister Wolfgang Schaeuble, was notable in rising to her defense last week. He accompanied her to Bavaria on Wednesday.

Germany’s 2015 budget surplus

Economic backbone

GERMAN Chancellor Angela Merkel is having pictures taken with refugees at a reception center for asylum-seekers, in Berlin, Germany, on September 10, 2015.

Merkel’s migrant troubles have reignited in the new year, with an outcry over assaults in Cologne blamed largely on foreigners and Bavarian allies renewing a push for a cap on asylum-seekers. BERND VON JUTRCZENKA/DPA VIA AP

A

NGELA MERKEL is running out of time and allies who’ll help her find a solution to Europe’s refugee crisis.

The net drew tighter this week as Germany’s southern neighbor Austria announced plans to impose an upper limit on refugees, and President Joachim Gauck suggested Germany may need to follow suit to maintain social order. To the north, once-open Sweden is already tightening border controls, while European Union (EU) states to the east of Germany are refusing point blank to take asylum-seekers.

Everywhere she turns, the German chancellor is running into resistance to the open-door refugee policy that’s morphed into her biggest crisis yet. That’s left the

leader of Europe’s biggest economic power pleading for breathing space in places such as Bavaria, the region where most asylum-seekers arrive, and home to some of her fiercest critics.

“This can’t go on forever,” Carsten Nickel, a political risk analyst at Teneo Intelligence in Brussels, said by phone. “After the political flashes over the last weeks and months, it’s going to be difficult to go through another summer with these kinds of arrivals.”

With her hold on the chancellery openly questioned as rebels in her coalition threaten her standing,

Merkel signaled on Wednesday that she’ll give diplomacy one more month. That timeline consists of planned talks with Turkish leaders in Berlin on Friday, an international conference on aid for Syrian refugees in London in early February and a summit of EU leaders starting February 18, where alongside Britain’s future in the bloc, the refugee crisis “must play a central role,” Merkel said.

Cajoling Turkey

HAVING so far failed to recruit fellow European leaders to share Germany’s burden, Merkel has given up on a resettlement accord with the other 27 EU governments and is, instead, pursuing a coalition of the willing, according to a person familiar with her strategy who asked not to be identified because the negotiations are private.

Cajoling Turkey to stem the flow of migrants crossing the country and to take back some refugees, is

key to her plans, the person said.

“Of course Germany will make its position known,” Merkel told reporters at the Alpine retreat of Wildbad Kreuth before defending her policy in front of the Christian Social Union (CSU), her Bavarian sister party, for the second time in two weeks. “After that we can make a preliminary assessment and see where we stand.”

Standing firm

AS public support for Merkel and her party bloc slides, the chancellor who once lived behind the Berlin Wall is standing firm, saying she won’t be the one to start reversing passport- free travel and commerce in Europe, a central achievement on a continent that started two world wars last century.

Since sexual assaults on women in Cologne and other German cities on New Year’s Eve, that stance has become even more difficult.

For all her woes, Merkel has no

SHE holds another trump card: the German economy. With a steady labor market and record-low unemployment, Germans have money in their pockets and are increasingly willing to spend it. The Finance Ministry announced a 2015 budget surplus this month of €12.1 billion, more than double the prior estimate, and said a balanced budget this year is still possible despite costs tied to refugees.

Merkel has seen worse ratings, and has committed dramatic Uturns before without any lasting damage—take her previous support for nuclear power. She’s still a long way from reversing her stance this time, pushing back in a speech to a business audience in Freiburg last week when she pointed out that nations near Syria have taken in many more refugees from the country’s civil war.

“If a continent like Europe with 500 million people is not capable of taking in 1 million Syrians, perhaps temporarily, then that is not in line with our values,” she said.

Her effort to press Turkey into helping halt the flow of migrants crossing the Aegean Sea to Greece takes center stage on Friday when Merkel and Turkish Prime Minister Ahmet Davutoglu are scheduled to meet in Berlin. On the agenda are pledges agreed between the Turkish government and the EU last December, including €3 billion ($3.3 billion) in aid for Turkey.

For Merkel’s growing number of critics, that gradual approach is too slow after 1.1 million asylumseekers arrived in Germany last year. Germany’s president chimed in with a speech to the World Economic Forum in Davos on Wednesday, warning that limits on migration may be exactly what’s “morally and politically” necessary to avoid overburdening native populations.

‘Completely vindicated’

GAUCK’S warning and Austria’s decision the same day to limit the number of refugees it’ll take in this year emboldened Bavarian Premier Horst Seehofer, a key Merkel antagonist who’s been pressing her publicly for months to

‘India’s Supreme Court exercising extraordinary jurisdiction’

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S India’s politicians bicker, its Supreme Court judges are taking the lead in shaping policy.

In the past six months, Indian courts doubled a tax on commercial vehicles entering Delhi, banned bullfighting and —most controversially—struck down a constitutional amendment that would give politicians a role in picking judges.

Soon they will decide on the legality of 4G mobile-phone licenses and mining activities in the south.

The speed at which India’s courts are handing down decisions contrasts with Prime Minister Narendra Modi’s struggle to push major legislation through parliament, including a national sales tax. The power of judges has also spawned a debate: Proponents view them as an antidote to India’s gridlock and a check on corrupt politicians, while detractors see a threat to democracy and a risk for investors.

India’s judiciary is “acting like a legislature,” according to Surya Deva, an associate professor at City University of Hong Kong’s law school who has called India’s Supreme Court arguably “the most powerful court in the world.” Judges can make laws, monitor implementation and resolve disputes, he said.

“There is too much concentration of power in judiciary because they are trying to do everything together,” Deva said by phone. “The separation of powers is totally destroyed.”

Rakesh Sharma, a public relations officer at the Supreme Court, said by phone he wouldn’t comment on criticism that judges are amassing too much power. He also declined to make any justices available for comment.

As prime minister, Modi is limited to setting policies that are then implemented by federal departments and India’s states. To pass laws, his party must get them through both houses of parliament, where 776 elected members represent all of India’s 1.3 billion people.

India’s 26 Supreme Court judges, by contrast, are picked behind closed doors by five senior jurists. They can review any law passed by parliament, initiate legal proceedings and give multiple directives in cases that can stay open for decades.

Part of their immense power stems from the introduction in the 1970s of public interest litigation (PIL).

‘Unique’ power

“THIS concept is unique to the Supreme Court of India only and, perhaps, no other court in the world has been exercising this extraordinary jurisdiction,” the court says on its web site.

Originally designed to allow the poor to directly ask the court to rectify injustices like prisoner abuse, gender inequality and environmental destruction, the scope of PIL cases has widened over the years. The Supreme Court has since weighed in on everything from burning

garbage to loudspeaker restrictions to how much food soldiers should give hostages taken by Kashmir militants.

The court’s decisions routinely affect companies. In 2012 the Supreme Court canceled 122 telecom licenses after deeming the allotment of spectrum “unconstitutional and arbitrary.” Two years ago, it voided mining permits and asked for fresh auctions.

Diesel cars

MAHESH CHANDER MEHTA, an environmental activist and lawyer, brought one of the most famous public litigation cases in 1985 to stem pollution from vehicles in Delhi. The case has since resulted in dozens of directives, including one in December that banned the registration of larger diesel vehicles in Delhi for three months.

“If government agencies fail to act, what will people do other than going to court?” Mehta said.

Every Supreme Court decision poses a threat to some companies and opportunities for others, according to Girish Vanvari, head of tax at KPMG in India.

They can create uncertainty in the investment climate if rulings are made abruptly without detailed explanations and reasonable timeframes for implementation, he said.

The auto industry says that was exactly the case with the court’s ruling on sport-utility vehicles, which came as a

blow to manufacturers like Toyota Motor Corp. and Mahindra & Mahindra Ltd. Many companies had increased capacity and added models based on growing demand stemming from years of subsidies on diesel fuel.

‘Knee-jerk reaction’

THE court’s “knee-jerk reaction” is not helping improve air quality, but “badly hurting some sections of the industry,” Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers, said by phone. “Investors will not come unless there is clarity.”

The role of the judiciary in India has been debated for decades. In 2008 former Chief Justice K.G. Balakrishnan said that Indian courts play a “very different social role” than in more developed countries.

“The main rationale for ‘judicial activism’ in India lies in the highly unequal social profile of our population, where judges must take proactive steps to protect the interests of those who do not have a voice in the political system and do not have the means or information to move the Courts,” Balakrishnan said.

India’s politicians have sought to rein in the courts. In 2014 lawmakers passed a constitutional amendment to give the prime minister, law minister and opposition leader a voice in picking justices. That would replace a “collegium” of judges that makes

recommendations to the president.

‘Tyranny of the unelected’

IN a ruling that exceeded 1,000 pages, the Supreme Court struck down the amendment last October, saying it would violate the “basic structure” of the constitution.

Finance Minister Arun Jaitley, a lawyer by training, said the decision was based “on a rationale that India’s democracy has to be saved from its elected representatives.”

“Indian democracy cannot be a tyranny of the unelected,” Jaitley wrote.

That doesn’t mean the government has no say. Gopal Subramanium withdrew his name for consideration after news reports emerged that the government asked the collegium to reconsider the appointment. Subramanium, a former government lawyer, was seen as a Modi opponent.

A Pew Research Center poll last year showed that more people had confidence in the national government than the courts, a reversal from 2014. Even so, the Supreme Court still has a good public perception, said Prem Shankar Jha, who has written about Indian politics since the 1960s.

“If you try to get something done, there is no one in the government to help you,” Jha said. “The judiciary has become the last hope of ordinary people.” Bloomberg News

stop the inf lux to Germany.

“I feel completely vindicated,” Seehofer told reporters in Kreuth, minutes before receiving Merkel at the snowy resort. “The squeeze is on.”

While it’s the smallest party in Merkel’s three-way coalition, the Bavarian CSU has been unapologetic about pressing the chancellor who, two years ago, posted the biggest election victory since East and West Germany reunified. Yet, she can rely on the support of her Social Democratic Party coalition partner and the opposition for the broad thrust of her refugees policy, paradoxically limiting the rebellion to a minority of her own bloc.

Caucus revolt

THE unrest in Merkel’s faction was given voice this week as almost 50 lawmakers from her Christian Democratic Union (CDU) signed a letter calling on the government to tighten border security to help limit the influx.

Along with the 56 CSU delegates who already aired their disapproval, that’s about a third of Merkel’s 310-member caucus in the lower house, according to CDU lawmaker Christian von Stetten, one of the rebels.

Even so, “this is not an appeal against the chancellor,” he said on Tuesday by phone, “but rather an expression of an alternative view of the issue at hand.”

That alone suggests Merkel isn’t going to be leaving the chancellery anytime soon.

After 10 years in office, the chancellor “is a wily political operator with no obvious rival from her own party or the opposition,” said Holger Schmieding, chief economist at Berenberg Bank in London. “Even those within her own party who disagree with her probably believe that toppling Merkel could hurt the center-right in future elections even more so than the current migrant crisis.” Bloomberg News

US to announce plan for new visa rules for some Europeans

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ASHINGTON—The Obama administration will announce as early as Thursday its plan to introduce new visa requirements for European travelers who are dual nationals of Iran, Iraq, Sudan or Syria, or who have visited any of these countries in the last five years.

US officials and congressional aides involved in discussions say the Homeland Security Department will outline how it will phase in the new rule, designed to make it harder for Europeans who have fought for the Islamic State to enter the US. The law passed by Congress in December only affects a minority of Europeans, but it has prompted great concern in countries whose citizens generally enjoy visa-free travel to the US. And it has drawn Iranian charges that the US is violating last summer’s nuclear accord by penalizing legitimate business travel to the Islamic Republic.

Iraq and Syria were targeted specifically because the Islamic State has seized significant territory in each country for its would-be caliphate. Iran and Sudan, like Syria, are designated by the US as state sponsors of terrorism.

The officials and aides weren’t authorized to speak publicly on the matter and demanded anonymity.

The biggest question mark concerns groups of individuals that could be exempted from the law, allowing them to continue traveling to the US under the Visa Waiver Program. AP

news@businessmirror.com.ph

The World BusinessMirror

‘THE NEW NORMAL IS A LOWGROWTH WORLD’

Anxiety in the air as world leaders meet in Davos

COFOUNDER Bertrand Piccard (left) and Pilot and CEO of Solar Impulse Andre Borschberg attend a panel “Around the World without Fuel Fear” at the World Economic Forum (WEF) in Davos, Switzerland, on Wednesday.

A prevailing sense of anxiety was in the air in the Swiss ski resort of Davos as the WEF kicked off with delegates fretting about the turbulence in financial markets, slowdown in China and plunging oil prices. AP/MICHEL EULER

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AVOS, Switzerland—In the couple of hours before Morgan Stanley chief James Gorman sat down on Wednesday to speak on a panel in Davos, Switzerland, he had lost some $600,000 on the value of his shares in the bank.

As the world’s richest business leaders and public figures kicked off the World Economic Forum’s (WEF) annual meeting in the Swiss ski resort, a renewed plunge in stock markets and global oil prices clouded the air with anxiety. Gorman is not alone—already this year trillions of dollars have been wiped off the value of shares around the world.

Some participants voiced a high degree of concern over the global economy, saying the recent turbulence in financial markets—which saw the Dow plunge over 500 points on Wednesday—was akin to a “meltdown.” Others sought to describe it as a natural adjustment. Not many were upbeat.

“The new normal is a low-growth world,” said Martin Sorrell, chairman of UK-based advertising giant WPP. Uncertainty over the slowdown in China, the plunge in energy costs and the potential disruption of new

technologies dominated discussion at the 45-year-old annual gathering, which tries to bring together leaders from every field and has become a key networking event.

Pope Francis sought to remind the elite gathering about the world’s poor, calling for new business models that create dignified work for all while protecting the environment. A message from the pope read out at the meeting on Wednesday told the crowd they cannot be fully human or happy if they ignore poverty, and fail to realize that their own actions are causing injustice.

Sorrell worried that companies are not confident enough to invest in new projects that might create growth and jobs. Instead, they increasingly prefer to reward shareholders with dividend payments and share buybacks.

And consumers, Sorrell said, remain wary—nearly eight years

after the global financial crisis saw the collapse of many banking groups and triggered the deepest recession since World War II. That wariness is why consumers don’t appear to be spending the windfall they earn from lower oil prices.

Money saved at the pump could be spent elsewhere, but that doesn’t appear to be happening now.

Tensions in the Middle East are also a concern. Iran’s foreign minister, speaking to The Associated Press in Davos, denounced new US sanctions over Iran’s ballistic missile program and warned that warmer diplomatic ties with Washington remain “far away” despite a landmark nuclear deal.

Min Zhu, deputy managing director of the International Monetary Fund, which this week cut its global growth forecast, said political uncertainties are behind much of the recent market volatility, and the reason for companies’ reluctance to invest $7 trillion or so of cash lying in the banks.

To boost global growth, Zhu said it’s paramount that governments make deep reforms to pension systems and labor markets, given that there’s little room for central banks to stimulate the economy by cutting interest rates and state budgets are stretched.

Paul Singer, CEO of hedge fund Elliot Management, blames a “very distorted policy mix” following the 2008 financial crisis for the current market turmoil, because it put the burden of boosting economic growth mainly on central banks.

$600,000 Value of shares in bank lost to Morgan Stanley chief His suggestion to help soften the impact of future shocks is to make the banking sector more resilient and transparent.

The plunge in oil prices was also identified as a growing threat to the world’s goal to reduce emissions.

The head of the International Energy Agency, which advises oilimporting countries, said the drop in costs for oil and gas is likely to reduce governments’ incentives to improve energy efficiency—in transportation networks, for example— as well as the installation of renewable energy plants.

Fatih Birol says energy efficiency has been driven not so much by environmental concerns in recent years but an interest in saving money, which is disappearing as fossil fuels become cheaper.

World governments agreed in Paris last December to limit the rise in global temperatures, a move that will require a ramp up in the amount of energy that comes from renewable sources.

“For renewables, life will not be easy,” he warned. AP

Friday, January 22, 2016

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Commodities meltdown boosts China’s bid to build New Silk Road

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HILE commodities producers grapple with the lowest prices in more than a decade, the slump could prove a blessing for President Xi Jinping’s signature initiative to build an intercontinental web of infrastructure and trade links with China at the center.

The New Silk Road program announced by Xi more than two years ago is finally gathering steam just as the prices of oil, steel, concrete and other building materials sink. That’s making it easier for China to sell its ambitious vision to build roads, railways, pipelines and ports from Xian to Athens, diversifying the country’s trade options and exporting the excess industrial capacity that’s dragging down its own economy.

The so-called Silk Road Economic Belt and 21st-Century Maritime Silk Road—or “One Belt, One Road [OBOR],” for short—sits at the center of Xi’s effort to bolster geo-economic clout across more than 70 countries in Asia, Europe and Africa. With many nations along the route dependent on commodities exports, the prices slump could make them more willing to accept Beijing’s investment pitch and a share of its $40-billion Silk Road infrastructure fund.

“It will help to ease cost pressures on OBOR construction projects, potentially boosting their financial viability,” said Andrew Wood, the head of Asian country risk at BMI Research in Singapore. The commodities meltdown could make participant countries “even more amenable to the stimulative effects of the large infrastructure projects proffered by China,” Wood said.

Iron ore plunged 39 percent last year, hitting $38.30 a dry ton last month, the lowest since at least May 2009 by Metal Bulletin Ltd. Citigroup Inc. said last Thursday that there was a “strong possibility” of the material falling below $30 a metric ton this year amid weak Chinese demand. Crude oil is selling for about $30 a barrel, a price not seen in more than a decade.

Meanwhile, the Silk Road, which until recently appeared to be a nebulous collection of existing projects and civil engineer pipe dreams, is finally taking shape. On Saturday Xi hosted senior financial officials from 57 countries in Beijing to mark the formal launch of the Asian Infrastructure Investment Bank, which he envisions as a big sponsor for OBOR projects.

“This year was the year of action for the One Belt, One Road, the year when the concept materialized to action and implementation,” Chinese Foreign Minister Wang Yi told a conference in Beijing last December 12. China signed more than 20 country-to-country energy cooperation deals last year to facilitate the plan.

The People’s Bank of China announced last April that a dam project in northern Pakistan—part of a $46-billion economic corridor linking western China to the Arabian Sea—would be the Silk Road fund’s first recipient, a total investment of $1.65 billion. China also started building a highway between Karachi and Lahore, and took over a 923-hectare free-trade zone at the deep-sea port Gwadar.

More nascent projects have

helped expand Chinese influence in places such as Southeast Asia and the former Soviet states of Central Asia, where Russia has long been the dominate power.

Kazakh Prime Minister Karim Massimov, who has watched oil’s fall upend budget projections, during a visit to Beijing last month locked in Chinese support for 52 projects worth $24 billion, with at least 10 expected to start next year.

At the same time, China’s Shenyang Lianli Copper Co. signed a memorandum of understanding to explore mining resources in Kazakhstan’s Atyrau region.

Yang Shu, director of Lanzhou University’s Institute of Central Asian Studies, called the commodities slump “a great opportunity for Chinese capital to further penetrate Central Asia, a key link in the Belt,” and could help alleviate concerns about becoming too beholden to Beijing. “The oil-price collapse helps reduce obstacles to the initiative,” Yang said.

Malaysia, which derives more than one-fifth of government revenue from oil-related sources, is also courting Chinese infrastructure investment. Malaysian Transportation Minister Liow Tiong Lai said at Silk Road forum in Kuala Lumpur last month that connectivity was a key growth driver and that railway cooperation with China was a core focus, according to this official Xinhua News Agency.

The Silk Road has been cast as a solution to several of China’s most vexing challenges, from reducing reliance on oil shipped through Pacific ports to converting economic strength into geopolitical might.

The project, outlined in a 9,000word action plan released last March, would eventually “directly benefit 4.4 billion people, or 63 percent of the global population,” Xinhua said.

One more pressing motivation is to “correct internal imbalances” by exporting China’s glut of industrial materials such as steel and cement. That oversupply is fueling deflation at the nation’s factory gates and contributing to the country’s economic slowdown.

With the plan still ramping up, Chinese steelmakers, who produce about half the world’s steel, are already exporting at record levels.

Outbound cargoes soared 20 percent to more than 112 million tons last year, an all-time high.

Low commodity prices also make it cheaper for Chinese stateowned companies to acquire energy and material assets along the Silk Road route in exchange for infrastructure, said Hong Hao, chief China strategist at Bocom International Holdings Co. in Hong Kong.

“The commodity cycle is still in a secular bear market, and will probably start to consolidate at low levels,” Hong said. “As such, these assets can be had at a cheap price.”

The commodity slump isn’t a clear positive or negative for the new Silk Road because it reflects weak Chinese demand and a domestic production glut, said Mark Patrick, head of Asia- Pacific country risk for JPMorgan Chase & Co. Still, it provides extra incentive to quicken the plan’s pace.

“It will increase pressure to execute the policy,” Patrick said. “And maybe that makes China bolder regionally. Bloomberg News

UN chief alarmed at projections for rising global unemployment

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NITED NATIONS—SecretaryGeneral Ban Ki-moon’s spokesman said on Wednesday that projections for rising global unemployment over the next two years are “alarming” and the UN chief will keep pushing for job opportunities, especially for youth.

The comments from Deputy Spokesman Farhan Haq were in response to a new report from the UN labor agency projecting that the number of unemployed people will increase by nearly 2.3 million in 2016 and 1.1 million in 2017 as

a result of the global economic slowdown last year.

Haq said Ban has been raising the need for new jobs in discussions with business leaders and others at the World Economic Forum (WEF) in Davos, Switzerland, this week.

According to the report from the Geneva-based International Labor Organization (ILO), the number of unemployed people reached 197.1 million in 2015, nearly 1 million more than in 2014 and over 27 million higher than before the global financial crisis in 2008, which ignited

the worst economic downturn since the Great Depression.

The increase in jobseekers in 2015 occurred mainly in emerging and developing countries—and emerging economies are expected to see an increase in unemployment in the next two years, especially in Asia, Latin America and commodity-producing nations in the Mideast and Africa, the ILO report said.

The two emerging economies predicted to contribute the greatest numbers to unemployment rolls in the next two years are Brazil, adding

700,000 people, and China, adding 800,000 people, it said.

ILO Director General Guy Ryder said on Tuesday in Geneva that “the significant slowdown in emerging economies coupled with a sharp decline in commodity prices is having a dramatic effect on the world of work.”

He called for urgent action “to boost the number of decent work opportunities.” Otherwise, he warned, “we risk intensified social tensions.”

On a positive note, the ILO said unemployment has declined in developed countries, including the

United States and those in northern, southern and western Europe.

It said most major developed economies “will see rates stabilize or continue to show modest improvements” in the next two years.

“In the United States, the unemployment rate is expected to dip below 5 percent in 2016, reaching 4.7 percent in 2017,” the report said.

But the report said “vulnerable employment”—poor jobs with low and highly volatile earnings and no benefits—“remains a pressing issue worldwide.”

“Vulnerable employment accounts for 1.5 billion people, or over 46 percent of total employment,” the report said. “In both southern Asia and sub-Saharan Africa, over 70 percent of workers are in vulnerable employment.”

In the coming years, the ILO said, vulnerable employment is expected to remain at around 46 percent globally, and a major challenge will be in emerging economies where the number of vulnerable workers is projected to grow by some 25 million over the next three years. AP

A8

Friday, January 22, 2016

The World BusinessMirror

briefs

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France returns to Cambodia head of Hindu statue taken 130 years ago

PAKISTAN HOLDS DAY OF MOURNING AFTER UNIVERSITY ATTACK CHARSADDA, Pakistan—Pakistan is observing a day of mourning after, a deadly attack by Islamic militants, who stormed a northwestern university the day before, gunning down students and teachers and spreading terror before the four gunmen were slain by the military.

The death toll from the assault at Bacha Khan University in the town of Charsadda rose to 21 on Thursday, after another student died in hospital, according to police official Tariq Khan. Flags on official buildings and the parliament are flying at half-staff and police have stepped up security at schools and educational centers across the country. A breakaway Taliban faction took responsibility for the university attack, which raised grim echoes of the 2014 school massacre that left 150 dead, 144 of them children. AP

CHINA CLOSES MILITARY NEWSPAPERS AS PART OF REFORM PROGRAM BEIJING—So long, People’s Frontline. Adios, Comrade in Arms.

China’s armed forces have shut down newspapers published by the country’s seven military regions as part of a program to downsize and streamline the world’s largest standing military. The papers, also including War Flag, Vanguard and People’s Armed Forces, have been gradually superseded by official news and propaganda television and web sites for soldiers whose access to the Internet and smartphones is restricted. The military’s People’s Liberation Army Daily said all the publications ceased publishing last week. The oldest, Soldiers News, dated from 1930. AP

MAGNITUDE6.4 QUAKE STRIKES CHINA, DAMAGES DOZENS OF HOMES BEIJING—A 6.4-magnitude earthquake struck a remote region of northwest China early Thursday, damaging a few dozen homes but causing no casualties. The official Xinhua News Agency said the epicenter of the 1:13 a.m. quake was in an unpopulated area about 33 kilometers from the country seat of Menyuan in Qinghai province.

The US Geological Survey put the quake’s magnitude at 5.9 and said it struck at a depth of 10 km on the western edge of the Plateau of Tibet, where the collision of the India and Eurasia plates generates numerous earthquakes and makes the region one of the world’s most seismically hazardous. Xinhua quoted local officials as saying the quake caused cracks in about 20 homes and other damage in more than 30 others.

Authorities sent 700 tents to the area. “The tremor lasted one to two minutes...with a rumbling noise,” the agency quoted Menyuan country resident Ma Wulong as saying. The tremor also was felt in the provincial capital of Xining. AP

SHERI YAN, CEO of Global Sustainability Foundation, arrives at federal court in New York on Wednesday. Yan, a US citizen, has become the second person to plead guilty in New York City in connection with a bribery scandal at the United Nations. A week ago, a Chinese businesswoman pleaded guilty in the case. AP/CRAIG RUTTLE

2nd defendant pleads guilty in UN bribery case $800k N

EW YORK—A US citizen on Wednesday became the second person to plead guilty in connection with a bribery scandal at the United Nations (UN), tearfully admitting that she bribed a former president of the UN General Assembly to gain his support for business ventures.

Sheri Yan, 60, entered the plea to a bribery charge in Manhattan federal court in a deal with prosecutors that recommended she be sentenced to between roughly six and seven years in prison. The charge carries a maximum potential penalty of 10 years in prison.

Her lawyers said she was not cooperating. Judge Vernon Broderick set sentencing for April 29.

Yan, speaking through a Mandarin interpreter, wiped away tears several times during the plea hearing as she admitted that she agreed with others to pay bribes to John Ashe so he could use his position

as president of the UN General Assembly and as an ambassador from Antigua and Barbuda to promote business ventures from which Yan and others could profit.

Defense attorney Christine Chung rested her hand on Yan’s back as Yan described her crime by reading from a prepared statement. Earlier, Yan said her formal education ended in the first year of junior high school.

Ashe, who served in the largely ceremonial post as head of the 193-nation assembly from September 2013 to September 2014, has pleaded not guilty to tax fraud

The amount Sheri Yan was alleged to have paid to then-UN president

charges and is free on bail. There was no mention at the hearing of Chinese billionaire Ng Lap Seng, who is charged with funneling hundreds of thousands of dollars in bribes to Ashe to gain his support for a Macau conference center that authorities say Ng hoped would be his legacy. Ng has pleaded not guilty and has asked for a speedy trial, saying his businesses are being damaged.

Authorities say Yan and a codefendant had arranged for more than $800,000 in payments to Ashe in exchange for official favors by Ashe and other Antiguan officials for various Chinese businessmen.

The initial payment Yan helped to arrange was $300,000 on behalf of a Chinese media executive, prosecutors have said. In court papers,

the government said Ashe went to Antigua to meet with key decisionmakers to discuss the media executive’s plans after Ashe received the $300,000 payment. Prosecutors say financial records reflect that Ashe sent $100,000 of the bribe to Antigua’s prime minister and more funds to other Antiguan political interests. According to court papers, Yan began paying Ashe $20,000 monthly in August 2013 to be honorary chairman of a New York-based non-governmental organization whose CEO was Yan. The organization, prosecutors said, was purportedly formed to promote the UN’s Sustainable Development Goals.

As part of her plea, Yan agreed to forfeit $300,000.

Yan’s plea comes a week after a Chinese businesswoman pleaded guilty in the case, agreeing to testify if necessary against others.

At a hearing scheduled for Thursday, lawyers for Francis Lorenzo, a deputy UN ambassador from the Dominican Republic who lives in the Bronx, plan to argue that he is entitled to diplomatic immunity. Lorenzo has pleaded not guilty to charges and is free on bail. AP

A STONE sculpture of Harihara, a Hindu deity, is displayed with its head reattached after a ceremony at the National Museum in Phnom Penh, Cambodia, on Thursday.

AP/SOPHENG CHEANG

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HNOM PENH, Cambodia—The head of a Hindu deity’s statue from the seventh century was returned by France and reattached to its body on Thursday for display at a museum, more than 130 years after it was spirited away. The stone sculpture is of Harihara, a deity that combines aspects of Vishnu and Shiva, the two most important gods in the Hindu pantheon who represent the creation of the universe and its destruction. It was taken from the Phnom Da temple in southern Takeo province by French researchers in 1882 or 1883 and was displayed at France’s Guimet Museum.

About 200 government officials, representatives of foreign governments, ambassadors and officials from the Guimet Museum attended the ceremony to reattach the head at the National Museum.

“After it was separated 130 years ago, we are welcoming the reunification of the head and the torso of Harihara,” Deputy Prime Minister Sok An said at the ceremony.

“According to our Khmer culture, the reunion is symbolic of prosperity.”

He appealed to other countries that hold Cambodian artifacts to return them. A 1993 Cambodian law prohibits the removal of cultural artifacts without government permission. Pieces taken after that date have stronger legal standing to compel their owners abroad to return them. But there is also general agreement in the art world that pieces are deemed to be acquired illegitimately if they were exported without clear and valid documentation after 1970—the year of a United Nations cultural agreement targeting trafficking in antiquities. AP

Trump holds 30-point lead over Cruz in Florida poll F

ORT LAUDERDALE, Florida—Dona ld Tr ump has strengthened his commanding lead among Florida Republicans, and is overwhelming homestate presidentia l candidates Marco Rubio and Jeb Bush. Trump has the support of 48 percent of Republicans in a new Florida Atlantic University (FAU) poll—more than 30 points ahead of No. 2 Ted Cruz.

On the Democratic side, Bernie Sanders hasn’t been able to put much of a dent in Hillary Clinton’s support. She’s 36 points ahead in Florida, even as polling shows a much closer contest in the critical early states of Iowa and New Hampshire. The latest Florida standings released on Wednesday by FAU provide comfort for the Democratic political establishment, which supports Clinton, and provide continued

reason for nail biting among the Republican establishment, which fears Trump and Cruz.

Pollsters found Trump, the New York developer who lives part-time at his Mar-a-Lago Club in Palm Beach, and Cruz, a US senator from Texas, far ahead of Rubio and Bush, who have repeatedly been nominated and elected statewide in Florida. Trump has gained 12 percentage points from FAU’s last poll last November, when he had the support of 36 percent of Florida Republicans.

With almost eight weeks to go until the Florida primary, it’s too early to tell who will win, said Kevin Wagner, an FAU political scientist and research fellow at the university’s Business and Economics Polling Initiative. But, Wagner said, “he’s so far out ahead, someone’s going to have to make

a remarkably strong move to beat him in Florida.”

Trump has a 70-percent approval rating among Republican voters, higher than his competitors, the poll found. But when independents and Democrats are included, he’s viewed favorably by a much smaller 42 percent. Cruz, who is locked in a fierce battle with Trump in the Febuary 1 Iowa caucuses, has moved up to second place among Florida Republicans, with 16 percent. Last November Cruz was at 10 percent.

Rubio, the Republican US senator from Florida, stands at 11 percent, down from 18 percent last November. He slipped to third place from second place last November.

“Floridians generally seem to like Marco Rubio, but it’s pretty clear that they’re uncertain about him being president. I think that’s what the poll is reflecting. Maybe

they think it’s too early for him to run or maybe they just like Trump better at this point,” Wagner said.

Bush, the former Florida governor, stands at 10 percent, virtually unchanged from November. He’s now in fourth place, up from the No. 5 spot in the last poll.

Ben Carson, the retired pediatric neurosurgeon from Baltimore whose legal residence is in West Palm Beach, has collapsed in Florida. After massive attention to the veracity of his statements, widespread reviews of his debate performances as lackluster and turmoil within his campaign, Carson now has the support of 3 percent of Florida Republicans. Carson is now statistically tied at the bottom with six other Republican candidates. Last November he was in third place with 15 percent of

the vote. Angela Mann, a Trump supporter who lives west of Boca Raton, said her candidate “will finish very strong in Florida.…

And I have no doubt in my mind that Mr. Trump will be our next president of the United States.”

Mann said via e-mail that she hasn’t been as excited about politics since Ronald Reagan was president in the 1980s. She sees her candidate as someone who “speaks from the heart, that truly loves our country and who is not in this presidential campaign for personal gain but to make America great again both domestically and internationally.”

Daniel Ruoss of Lauderdale-bythe-Sea, the southern region vice chairman for the Young Republican National Federation, said he’s not convinced Trump will have the kind of turnout of registered

Republican voters suggested by the poll numbers. “I still view that support as very soft potentially,” he said. Ruoss, a Bush supporter, said the choices Florida voters will have to make in the March 15 primary will be shaped by the earlier contests in Iowa and New Hampshire. “Iowa means a lot more for Trump and Cruz, and for the rest of the candidates you have to prove yourself viable in New Hampshire.

I don’t think anyone who finishes fifth or below in New Hampshire is going to stay in the race.

After that I think the field is going to get smaller.” Wagner said Cruz has the potential to improve his performance in Florida once he steps up his campaign efforts as the primary draws closer. “There would be support for Cruz’s style of conservatism, especially in northern Florida.” TNS

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The World BusinessMirror

Friday, January 22, 2016

A9

New giant planet found

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ICY BATH A Russian Orthodox believer bathes in the icy water on Epiphany in the Neva River in Saint Petersburg, Russia, on January 19. The temperature in Saint Petersburg is minus 5° Celsius. Thousands of Russian Orthodox Church followers plunged into icy rivers and ponds across the country to mark Epiphany, cleansing themselves with water deemed holy for the day.

Water that is blessed by a cleric on Epiphany is considered holy and pure until next year’s celebration and is believed to have special powers of protection and healing. AP/DMITRY LOVETSKY

Drug industry vows to fight superbugs together with govts

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RENTON, New Jersey—Dozens of makers of medicines and diagnostic tests have joined together in an unprecedented effort to tackle “superbugs”—infections that increasingly don’t respond to drugs and threaten millions of people in countries rich and poor.

Altogether, 74 drugmakers, 11 makers of diagnostic tests and nine industry groups have signed a groundbreaking agreement to work with governments and each other to prevent and improve treatment of drug-resistant infections. They have planned to announce the new agreement on Thursday at the World Economic Forum in Davos, Switzerland.

The effort is sorely needed.

Many common infections no longer respond to conventional drugs, mainly due to overuse

of antibiotics, few new drugs to fight bacteria, viruses, parasites and fungi, and declining industry research in the field. A key factor driving those problems is the relatively low prices infection-fighting medicines bring, compared to many drugs patients take for years for chronic conditions.

Bacteria and other microbes can naturally develop resistance to drugs, particularly when patients don’t take all of their prescriptions, and the stronger microbes survive and multiply.

Taking antibiotics for viruses and other nonbacterial infections also contributes to resistance.

And widespread use of antibiotics to spur faster growth of livestock raised for food exacerbates the problem.

Meanwhile, in poor countries, many people can’t afford these medications and die unnecessarily. With more and more bugs evolving to overcome infectionfighting drugs, by 2050 superbugs are expected to kill about 10 million people annually without major intervention.

That’s according to a recent analysis, called “ The Review on Antimicrobial Resistance,” commissioned in 2014 by the UK government. The analysis also forecasts global economic output will be reduced by a total of $100 trillion by 2050.

Against that backdrop, drug and device makers and industry groups from 16 countries have signed the “Declaration on Combating Antimicrobial Resistance.”

It’s the first statement on how government and industry should

work together to prevent more antimicrobial drugs from becoming ineffective, encourage development of new drugs and provide access to them for all those needing the medicines, regardless of their income or location.

“Antimicrobials are the backbone of modern medicine and have played a key role in increasing life expectancy globally,” Dr. Paul Stoffels, Johnson & Johnson’s chief scientific officer, said in a statement. “For the world to continue to have new antibiotics, we need investments in basic science and novel incentive models for industry R&D, and to protect our existing treatments, we need new frameworks for appropriate use.”

Other companies participating in the effort include companies making antimicrobial drugs and vaccines, such as GlaxoSmithKline Plc., Novartis AG and Pfizer Inc. They’re joined by companies such as the Roche Group and Alere Inc. that make tests used to diagnose the specific type of infection a patient has. Those

are crucial to ensure that the patient gets the best treatment, rather than an antibiotic for an infection caused by a virus or other organism. The declaration calls for steps including:  Governments committing funding to implement the World Health Organization’s Global Action Plan to create programs ensuring that health systems use antibiotics appropriately, along with increasing use of fast diagnostic tests and boosting reimbursements for them to ensure patients get the correct treatment.  Bet ter educ at ion of doctors and nurses on appropr iate a nt ibiot ic use.  Improved infection control through better hygiene, vaccination and preventive treatments.  Reduced used of antibiotics in livestock.  Higher reimbursements for antibiotics and diagnostic tests in developed markets.  More collaboration between researchers at drugmakers and those at universities and government.  More access to antibiotics in countries around the world. AP

2015 the hottest year ever; 2016 forecast as warmer T

HE year 2015 was Earth’s hottest year on record, and it appears the planet is still getting hotter. Barely three weeks into the new year, climate researchers from National Aeronautics and Space Administration (Nasa) and the National Oceanic and Atmospheric Administration (NOA A) are already predicting that the average surface temperature around the planet is likely to be higher in 2016 than it was in 2015. That would mark the first time the average global temperat u re reac hed recordbreaking heights for three consecutive years.

“It’s not unprecedented to have two years in a row of recordbreaking temperatures, but in our records, we’ve never had three years in a row,” climatologist Gavin Schmidt, director of Nasa’s Goddard Institute for Space Studies in New York, said on Wednesday. “If 2016 turns out to be as warm as

we anticipate, that would be unprecedented in our record book.”

One reason scientists expect 2016 to be even warmer than 2015 is that the lingering effects of the El Niño weather pattern should push temperatures skyward through the first half of the year.

“El Niño takes heat out of the oceans and puts it in our atmosphere, and we’ve just had the biggest El Niño in a generation,” said Katharine Hayhoe, an atmospheric scientist at Texas Tech University in Lubbock, Texas. El Niño is partially responsible for the extremely high temperatures recorded around the globe last October, November and December, the Nasa and NOAA researchers said. Still, even before the effects of El Niño were felt, the planet was experiencing considerable temperature anomalies.

Data show that 10 out of 12 months in 2015 broke previous temperature records. The only two that didn’t were January and April.

“Even without El Niño this would have been the warmest year on record,” Schmidt said. “We are looking at a long-term trend, and the factors that cause this longterm trend are continuing to accelerate, namely the increased burning of carbon-dioxide fuels and other emissions.”

Unusually warm temperatures were seen almost uniformly around the planet in 2015. Temperatures were well above the 20th century average on all six populated continents and in most of the oceans, the government scientists said.

The one exception was a curious region of unusually cool water in the Northern Atlantic, off the western coast of Greenland. Researchers are still trying to understand what’s responsible for this cold spot, although the melting of the Greenland ice sheet might have something to do with it.

“It’s something to look at going forward,” Schmidt said.

On land, Asia and South America saw their warmest years since official record-keeping began there in 1910, while Africa and Europe reported their second-warmest years on record. North America had its fifth-warmest year, and Australia and the rest of Oceania reported its sixth-warmest year.

Two weeks ago, NOA A announced that the average temperature for the contiguous United States last year was 54.4° Fahrenheit, 2.4° above the 20th century average. That made 2015 the second-warmest year in 121 years of record keeping. The global temperature data are collected by 6,300 land-based weather stations, as well as research stations in Antarctica and a network of ships and satellite-communicating buoys in oceans around the world.

Nasa and NOA A have slightly different ways of interpreting surface temperature data, but they found comparable increases

in average global temperature between 2014 and 2015. Specifically, Nasa recorded an increase of 0.23° Fahrenheit, while NOA A measured a rise of 0.29°. Although these changes may seem small, experts said they are significant and unprecedented.

“For every 1° Fahrenheit increase in temperature, the atmosphere can hold about 4-percent more moisture,” said Kevin Trenberth, a climate researcher at the National Center for Atmospheric Research in Boulder, Co. “With a quarter-degree increase, that means the atmosphere can hold 1-percent more moisture in 2015 than in 2014.”

One of the consequences of that is increased flooding. Devastating floods in Missouri, central South America and Chennai in southeast India in 2015 could have been the result of the higher global temperatures, Trenberth said. Los Angeles Times/TNS

STRONOMERS say they’ve found evidence that our solar system may hold another giant planet, hidden in the dark, distant badlands far beyond Neptune’s orbit.

This so-called Planet Nine, described in the Astronomical Journal, would likely have roughly 10 times the mass of Earth and circle the sun in 10,000 to 20,000 Earth years. Neptune, the farthest known planet today, makes its round trip in 165 years.

If it is found to exist by powerful telescopes on Earth, Planet Nine would rewrite our definition of the solar system and help solve some mysteries about its violent past.

Scientists have been wondering whether a “Planet X” exists in the dim regions far beyond the known planets, but it has remained largely speculative. Scientists and layfolk alike have had to content themselves with just eight planets, cut down from nine after Pluto was demoted to dwarf in 2006.

That started to change in March 2014, when a pair of astronomers announced that they’d discovered a brand-new dwarf planet, 2012 VP113, beyond the well-populated edge of the Kuiper belt, whose main mass stretches from Neptune’s orbit around 30 astronomical units (or 30 times the Earth-sun distance) out to 50 astronomical units.

It wasn’t the only such object: Sedna, a 600-mile-wide rock discovered in 2003, also boasted this far-out orbit, and it seemed to be making its closest approach to the sun at a similar angle as 2012 VP113.

This could be highly coincidental— or it could mean that a giant planet was lurking out there in the dark, influencing both their movements.

Caltech astronomer Mike Brown, one of the main players responsible for Pluto’s demotion, saw this paper and was intrigued by the implication. He went down the hall to see his colleague Konstantin Batygin.

“I walked in and said, ‘Look, this is real, we have to figure out what is going on,’” Brown said.

Batygin, the study’s lead author, hadn’t been thinking much about the solar system or about invisible planets—but the data was intriguing.

“These two Kuiper belt objects are really outliers.…Their orbits do not hug the orbit of Neptune, and hugging the orbit of Neptune is kind of a unifying feature among the vast population of Kuiper belt objects,” Batygin said. “Neptune could not have gravitationally kicked them out to an orbit with which it doesn’t interact.”

Brown and Batygin set out to nail down an explanation. The researchers studied the paths of a half-dozen far-out Kuiper belt objects. They found that certain angles in their orbits were aligned in an inexplicable way, and their perihelia—the point at which each object came closest to the sun—were all clustered very closely together, rather than being randomly distributed.

Brown was baffled by these orbits, which often crossed each other.

There’s no way that these crossing paths should remain stable, he thought—unless there was something else out there that was massive enough to shepherd these objects along, keeping them in line.

The scientists calculated that such a massive planet would have an orbit whose closest approach was on the other side of the sun from the perihelia of the objects it was shepherding. This giant planet is so far out, however, that the closest it gets to the sun is a whopping 200 astronomical units.

Planet Nine would probably be somewhere around 10 Earth masses, making it a tiny gas giant, known as a mini-Neptune. In fact it’s this mini status that probably had something to do with its current banishment to the interplanetary boonies, said Scott Sheppard, an astronomer at the Carnegie Institute for Science in Washington, who was not involved in this paper. Los Angeles Times/TNS

A10 Friday, January 22, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Lower oil prices; lower consumer prices?

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F course, there are some downsides to these incredibly low oil prices as we mentioned a week ago. Certainly, Philippine politics is a circus— even a clown show—that cannot be a source of pride. There is no question that we, as a society and a nation, have not treated the least fortunate of our ranks as well as we could and should have.

It is a shame that certain groups in our country put their personal self-interests above the interests of this sovereign nation, and that includes many more than just our separatist movements. Smugglers, crooked government officials and tax evaders are just a few of the classes of people that are genuine parasites to the vast majority of Filipino citizens.

We, as a people, and through our government, are faced with difficult decisions, such as the fight for our territory with China. The cruel hand of fate has placed the Philippines between a rock and a hard place in our relations with both China and the United States, and that is unfortunate. But we will overcome this hurdle as we have so many others.

Our hearts go out to Mary Jane Veloso, who may have been an unwitting pawn in a situation that might cost her life. Our anger goes out to Mary Jane Importante Escalona, a maid to a Filipino expat in Singapore who will go to prison for a $400,000 theft from her employer to fund her gambling habit.

The Philippines, like every nation, is a study in contrasts and contradictions. Sometimes, though, the Philippines rises to the top of common sense.

Since oil prices started falling in 2014, the public felt that gasoline and transportation prices were not declining as fast as, perhaps, they should be. Local Philippine airlines eventually eliminated their “fuel surcharge.”

But in 2015, profits for carriers, like Cebu Pacific, remained strong and higher than in the previous year. Eventually, taxi cabs were forced, while screaming and complaining, to lower their flag-down fare by P10. But, perhaps, for the first time in world history, a transportation sector has asked that passenger fares be reduced, and this is coming from the jeepney operators. Several operator groups have filed a petition with the Land Transportation Franchising and Regulatory Board (LTFRB) for a 50-centavo reduction in the base fare.

Granted that the LTFRB was already considering a pending case for permanent fare reduction and that this fare decrease is not financially life changing for commuters, it is both the public relations and symbolic significance that counts. Trade Undersecretary Vic Dimagiba said the agency welcomes the initiative of transport groups to lower their fares, and also said that for prime commodities (like sardines, milk, coffee, noodles and bread), fuel is only about 3 percent of total production costs.

Certainly, oil prices will go higher eventually. But it would not hurt other industries to offer even a small discount to show that we, Filipinos, are all traveling in the same economic boat.

Presidential timbre James Jimenez

SPOX

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ITH the Pilipinas Presidential Debates on track to kick off on the 21st of February, the Commission on Elections (Comelec) recently released a number of proposed topics.

For the debate in Mindanao, slated to be held in Cagayan de Oro, the Comelec suggests that agricultural development, poverty reduction/asset creation and redistribution, charter change, and peace and order be discussed.

For the Visayas leg of the debates, owing largely to the recent typhoons, disaster preparedness and climatechange adaptation, health care, education and fighting corruption seem to be particularly apt for discussion; and for the debate in Luzon, traffic and public transportation, electoral and political reforms, foreign policy, tax reform and national defense.

These are all good topics, and hearing the candidates’ positions on them would certainly be very enlightening. However, I worry about how deeply any of the candidates can dive into any of these topics, given the limitations of the medium. And with the candidates’ representatives insisting that their principals be given three minutes to respond to questions, I have to wonder about the math.

Assuming six candidates participate in the debates, with each being given three minutes to respond to each question, then you’ve already consumed 36 minutes out of the total running time of 120 minutes. And

that’s just on one question, imagine if one question had to be asked for each topic.

In other words, it would not do to treat the debates as just another interview, albeit with a funky format, where the ultimate goal is to elicit the best possible—but nevertheless canned—answers from the candidates. If the Pilipinas Debates were like that, how would they be any different from any of the media forums already being staged by everyone?

To my mind, and with apologies up front if this comes off as condescending in any way, the debates should not be about who can cram the most detailed plan of action into the fewest possible minutes. Candidates having detailed plans of action, after all, shouldn’t be remarkable or impressive—it should be something the electorate can take for granted.

Instead, I would love for the debates to be a showcase for presidential timbre.

Timbre is essentially a musical term, referring to the overall quality

of a sound and, ultimately, its ability to evoke emotion. Used in politics, timbre similarly refers to the ability of a candidate to evoke an emotional response—confidence, anger, inspiration—in the electorate. And it is what televised presidential debates were made for.

It’s fairly easy to surround yourself with supporters and boosters during a campaign sortie. It’s quite a different thing when you try to outshine stiff competition on the same stage. Richard Nixon found that out to his great dismay, when he squared off against John F. Kennedy.

Nixon at that time was an accomplished statesman having served almost eight years as vice president, after a distinguished career in Congress. In contrast, JFK only had an unremarkable single Senate term to boast of. And, yet, when they met onstage in the first televised debate in American history, Nixon was routed

by JFK in the public opinion.

The numerous post-debate analyses agreed that Nixon lost because he looked unhealthy, shifty and defensive, whereas JFK gave the appearance of youthful vigor, directness and unswerving calm. This conclusion that visuals—not just the looks, but the manner the debaters engaged each other, the confidence they projected and the minutiae of their reactions—were key was validated, albeit in a roundabout way, by the fact that people who only listened to the debate on radio gave Nixon the debate by a small margin. Substance-wise, therefore, both Nixon and JFK were evenly matched, except that JFK resonated with the voting public better.

In a word: timbre.

Republican race enters survivor phase B J B Bloomberg View

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ECHNICALLY, presidential nominations are supposed to be won through the votes of delegates at the national conventions. The possibility of contested conventions aside, however, we know that victory really depends on winning the largest number of delegates in primaries and caucuses.

So the rules for how those delegates are apportioned are incredibly important, right?

Well, sort of. If there is a closely contested fight all the way to June, then yes, it matters a lot how states allocate delegates. The Democrats use a proportional system everywhere: Candidates amass delegates based on their share of the vote.

Republicans use the proportional

method in some states, including Iowa and New Hampshire, where the first votes of 2016 will be cast.

Other states follow a pure winnertake-all approach, while most (such as South Carolina, the third state on the calendar) have some combination or hybrid of the two.

To figure out how the Republican rules might affect their nomination contest, I recommend bookmarking David Wasserman’s detailed look at FiveThirtyEight. The short version? A moderate or mainstream conservative candidate will have delegate problems in the early contests through mid-March, but then will have advantages later in the calendar. And yet, since 1984, we’ve really only had one extended battle, the Barack Obama/Hillary Clinton face-off in 2008.

Every other nomination fight was

decided not by the delegate count, but by attrition. Losers dropped out, most of them long before the nomination was clinched by the winner who accumulated enough delegates. Winnowing worked. Eventually, only one serious candidate remained.

Of course, the campaigns need to fight for every delegate, because they know their contender could wind up in a close contest with one other, or even two other, candidates.

That outcome is very unlikely, however. No one is going to win the nomination despite getting only 30 percent of the vote in primary after primary: It will take more than that to win once the field is narrowed to two or three candidates.

Consider the case of Marco Rubio.

His problem isn’t, as Princeton’s Sam Wang said that he might fall below the delegate threshold in several states.

The Pilipinas Debates, I think, will be a golden opportunity for the Filipino electorate to see which of the many candidates they can rally behind. Focus on issues should not be lost—agreed. And the opportunity to have candidates go on record about platforms and so on, should not be squandered—true enough. But the Pilipinas Debates have the potential to be so much more than just another glorified forum, where everyone gets the chance to talk around each other and at the public.

It’s a chance to get under the candidates’ skins and see what makes them tick. It’s a chance to see them explain to us—the voters—why they’re a much better choice than the person to their left or their right onstage. It’s an opportunity to go beyond the sterile blandness of policy, to finally see why we should be inspired to unity.

Here’s hoping we can make it that way. nnn

The first presidential debate will be held in Cagayan de Oro City on the 21st of February 2016. The second debate will be in the Visayas on the 20th of March. The third will be on the 24th of April in Luzon.

The locales for the second and third debates haven’t been settled yet, but venues have been tentatively identified in Iloilo and Pangasinan. The vice-presidential debate, scheduled for the 10th of April, will be held in Metro Manila.

James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.

His real worry is that he’s losing everywhere according to the polls, and that unless he solves that problem it won’t matter whether he loses states while adding a few delegates or loses without adding a few delegates. What he and any candidate need is to do well enough to survive, and then win states. And that has little or nothing to do with delegate totals.

On the Democratic side, we’re almost certainly down to two candidates, so delegate counts make sense.

The Republican contest right now, however, is over which candidates will survive through Iowa, New Hampshire, South Carolina and Nevada in February, and then survive through several states in the first half of March. If we have two or more viable candidates at that point, that’s when we should start paying attention to the delegate counts.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Friday, January 22, 2016 A11

Social security as a public good Leonardo A. Lanzona Jr.

EAGLE WATCH

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HE proposed P2,000 across-the-board raise for Social Security System (SSS) pensioners is fundamentally a call for an expanded social-security program. This is a welcome development in two ways. First, the specific case for expanding social security is reasonable. Second, and more important, the proponents of the proposal seem to be standing up to minimal (or corrupt) government propaganda and recognizing the reality that there are some areas where the government is better than the private sector.

The first point indicates that social security has a fundamental role to play in running an efficient economy. There are many reasons why this is the case. One argument found in the labor economics focuses on the nontradability of human capital (e.g., skills). Given that human capital is embedded into the person and cannot be transferred for any other skill or to another person for a price, it is unlikely that persons will achieve their life-cycle goals in consumption and savings. In this case, an expanded social security creates more opportunities for workers, especially those who are risk-averse, to achieve their plans.

A larger social-security program can actually be beneficial to small firms since they no longer need to attract workers to join them by means of higher wages.

Larger firms can easily secure their workers’ future since they have enough resources to offer various forms of pensions, including those sourced privately. Smaller firms, however, are constrained to do so. Hence, a public social security, which offers higher pensions and is partly subsidized by the government, eases the burden of the smaller firms, making them more competitive.

The second positive point takes account of the fact that social security is a public good. It only works feasibly if it is implemented on a large scale. Pensions, like other public goods, such as national defense and infrastructure, cannot be made available to anyone without being made available to everyone, and which profit-seeking firms, therefore, have little incentive to provide.

Only the government can effectively provide these systems.

Notwithstanding the low pensions, the current system is simple and clean, with low operating costs and minimal bureaucracy. It provides older Filipinos who worked hard all their lives with a chance of living decently in retirement, without requiring that they exhibit extraordinary ability to predict the future and be adept in investment analysis. The presence of private pensions does not negate the fact that the government has an extensive set of resources and power to reach the socially acceptable level of social security at limited costs.

President Aquino’s veto of the proposed increase in pensions is, therefore, an indication of weak governance. The official rationale for the veto is the potential bankruptcy of the SSS in 11 years. But this is not the best argument for the continuation of an existing SSS. The crucial issue is whether the pensions are enough to ensure that persons achieve their life-cycle goals.

A social pension plan, which survives perpetually but cannot ensure decent living for the retired workers, is absolutely worthless.

In addition, the purpose of the proposal seems fair enough since it merely serves to make pensions to private-sector employees comparable to the pensions of government employees. Government retirees apparently receive greater pensions from the government security plan.

Given that the proposed increase is fair, the more acceptable

President Aquino’s veto of the proposed increase in pensions is an indication of weak governance. The official rationale for the veto is the potential bankruptcy of the SSS in 11 years.

This is not the best argument for the continuation of an existing SSS. The crucial issue is whether the pensions are enough to ensure that persons achieve their life-cycle goals. rationale for a veto would have been to invoke the issue of “free-riding.”

In essence, the administration would have to say that offering the current retirees a higher pension would necessitate higher contributions from the current and future set of workers. With higher pensions, the older generation then will be riding on the backs of the younger generations. Unless coercion ensues, the younger generations will unlikely be willing to bear this responsibility.

However, using this argument would be equivalent to an admission of weakness in solving the problem. The solution entails a collective action to convince the younger generations of workers that they, too, will benefit from the higher pensions. For the plan to succeed, the SSS as an institution and the whole social-security infrastructure will need to be reformed, including the bonuses for its officers, in order to ensure the sustainability of the pensions that people deserve.

Thus, by blocking the pension increase, the President missed an opportunity to institute a lasting reform that makes the government more relevant. Furthermore, this veto is inconsistent with his previous opposition to lowering income taxes. Raising taxes, especially on the rich, is, in fact, one part of the solution to the “free-rider” problem, as this policy addresses the shortage of funds.

However, if the government cannot even guarantee a decent pension plan to survive in the near future, then it should lower taxes in order to allow workers to explore other usually more costly options in the market.

In the end, it may just be all politics. In rejecting the pension bill and resisting the income-tax decrease, Aquino gets the nod of his constituency, consisting mostly of younger, middle-income and relatively more educated voters who have interest in maintaining the status quo. However, it can be noted that the proponents of the pension raise (e.g., Vice President Jejomar C. Binay and Sen. Francis Escudero) are also inconsistently advocating for lower taxes. This then favors their relatively poorer constituency.

Because of contrasting personal interests, none of these programs will eventually work for society. It is about time we do away with politics and think more logically about the way to reform the Philippine social-security structure.

Leonardo Lanzona Jr. is director, Ateneo Center for Economic Research and Development, and a senior fellow of Eagle Watch, the school’s macroeconomic research and forecasting unit.

While the world sleeps Tito Genova Valiente

ANNOTATIONS

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TRAVEL many kilometers at night while the world sleeps.

This is when I move from Manila to Naga to watch over my mother who, at 89, checks her watch each minute and wishes that the lunch or dinner is being readied already. She belongs to a generation who has seen wars and famine, and so I understand.

That understanding sounds sweet, but in reality and up close, it can test your patience and skill.

Thus, I travel each week.

The trip begins cursorily from my apartment where the hailing for a taxi demands dexterity and, well, lots of understanding. When the cab stops for me, it is because the driver has been seduced by the bags or luggage I am carrying. Am I bound for the airport, for which he can always haggle for a dagdag, or an additional fee? When I direct him to the bus station in Cubao, the look of disappointment grazes his face. Then he asks where I am going. If he is a Bikolano, I am in for a long conversation about how long he has been away from the place.

Then I tell him, I go home every week. He looks at me as if I have criticized his detachment from the place of his birth.

The bus I take is called Skybus.

Up to now I still do not know why it bears that name. It is one of those few buses that pass via C-5 and not the

dreaded Edsa. I do not pass, therefore, the common malls and sites like Ortigas (pronounced “Ortegas” by many in the metropolis), Guadalupe, Buendia (pronounced “Buyndya” in Metro Manila), and Bicutan, notorious during martial law for its incarceration.

C-5 is a long stretch with sophisticated malls and supermarkets and sophisticated squatter areas. Some of these structures are perched on hills. If one does not know the history of land ownership in this country, one may think these small homes are townhouses of people with surpluses.

The Skybus is quite efficient. It has a stewardess and, if you doubt if she is one, then wait when she introduces herself when the bus leaves the terminal. She tells you the travel will take some nine hours unless there is some delay. That is quite a caveat.

The bus stops at Alabang to pick

up some passengers, and rushes for its meal stop in McDonald’s in Tiaong. This is by no means a commercial, but I need to mention that name because it spells the demise of the traditional stops in Laguna and Quezon, those little, charming stores with all the native delicacies.

Gone are the chances to buy espasol and ube candies and shing-a-ling (no translations provided). If one is into them, there are the lambanog, the wine made from coconut, in different colors and alcohol content. Light a match and the bottle can create a unique explosion out to threaten all alcoholics.

The bus enters the Quirino Highway, which took a long time to build and is forever being rebuilt through constant reblocking and repair. The highway goes through what was then a dense forest cleared in the name of economic development. If you take the other buses, you could make a stop in a place that used to be part of Quezon Province but is now considered part of Santa Elena, which belongs to Camarines Norte of Bicol region.

One becomes aware of boundaries when one is making these night trips.

I sleep all throughout the trip, which gets really cold. The veteran bus riders are armed with blankets and mufflers.

What is it with us and air conditioners that we always bring the thermostat to a temperature suited for lettuce and other greens, instead of for ladies and gentlemen?

A cheaper yuan won’t help China B C B Bloomberg View

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EARS that China may spark a currency war by devaluing its currency have hammered stocks both at home and abroad, helping to send the Shanghai bourse into bear territory. That’s only one reason Chinese leaders should think twice about driving down the yuan, though. The other is that it probably won’t work. The common wisdom is that a cheaper currency helps exports. Holding all else constant, as economists are wont to do, lower prices should increase demand for Chinese goods, giving a fillip to an economy that’s now growing at its slowest rate in a quarter century.

But there are many reasons to believe that devaluing the yuan won’t kick-start growth in China and may cause bigger problems down the line.

First, exports make up a much smaller portion of the economy than they have in China’s modern history—only 22.6 percent of GDP at the end of 2014, a proportion that shrunk further in 2015. Even a large jump in exports would, thus, have a relatively modest impact on GDP

growth: Bloomberg Intelligence has estimated that a drop in the yuan’s exchange rate from 6.58 to 7.7 to the dollar would add only 0.7 percent to GDP. A cheaper currency also raises the price of imports—a poor signal to send if China truly wants to transition to a consumption-driven economy.

Furthermore, given how integrated China is into modern global supply chains, a fair amount of its trade now relies on imported components or is processing trade. A devalued currency would make many inputs —including those that go into the millions of iPhones assembled on the mainland—more expensive, further dampening any expected boost to exports.

Nor would a lower yuan help energize Chinese processing trade, given the minimal amount of value that stays in the country. One study found that only about 3 percent of an iPhone’s value remains in China, a portion sure to be unchanged by a fluctuating currency. One International Monetary Fund study found that “global value chains” reduced currencies’ ability to increase trade by 22 percent on average, more for some countries.

Finally, given the sizeable depreciation of other emerging market currencies against the dollar, it would take a fairly significant decline in the yuan to stimulate trade and growth. China has become an expensive place to do business, losing its low-cost mantle to Southeast Asian countries such as Vietnam; a small devaluation won’t be enough to draw back customers who’ve left recently. Only an unpalatably large decline would restore Chinese costcompetitiveness.

All this begs the question of whether China should even want to return to a growth model of running large surpluses based upon a cheap currency. Certainly, for the Chinese regime, devaluing the yuan must look politically more palatable than shutting down companies or blocking loan rollovers: It would impose costs on other countries rather than on the domestic population. But that growth model has hit its limits. Returning to it would only be an excuse to avoid the difficult reforms needed to fuel competitiveness and dynamism.

Indeed, what’s really driving downward pressure on the yuan are capital outflows as Chinese investors

Like love, my body knows when I am leaving the Quirino Highway, which some call the Andaya Highway (politicians can own roads, we cannot). As the bus curves to the right and then left, I know I am in Sipocot, perhaps the last town in Bicol where Tagalog sort of dominates the Bicol language. The bus makes small stops until the bus heaves and goes onto a bridge. Beneath is a wide river. We are entering Naga.

The couple who has been speaking Tagalog starts conversing in Bicol. Everyone, in fact, is Bikolano, except a guy who just arrived from “Washington” who speaks the piquant Buhinon language, the one spoken in Buhi. How did I know he just came from abroad? His wellwishers in Cubao made sure we overheard his status.

On the way back, the bus passes by the same route. I discover new stops and new places: McKinley Hills, then Bagong Ilog. I cannot see the “new river,” which is just as well. I am certain the river either is dark and dirty, or may not be there anymore.

The Skybus seems true to its name; it flies high above places and people. I do not see farms anymore. They seem to be far off in the distance. The carabaos have been pushed deeper into the woods.

Where there were ricefields now I see tiny homes hugging each other as if for comfort for a journey that is only interested in destinations and terminals.

E-mail: titovaliente@yahoo.com.

look to get their money out of the country into safer havens such as the US; by some estimates, $1 trillion has left China since the middle of 2014.

One can hardly blame them. Despite the regime’s promises, economic growth remains weak and surplus capacity prevents new projects from getting started. Access to capital for everyone but state-owned enterprises is difficult at best. Domestic companies are reluctant to invest in new products given China’s weak record on intellectual property rights.

Chinese investors don’t trust the regulatory structure to protect them and fear advertising their wealth, lest they attract the attention of the regime’s anti-graft investigators.

Meanwhile, foreign investors feel targeted by inconsistent investigations and opaque laws; they’re not about to fill the void left by fleeing Chinese capital.

Not only would devaluing the yuan do little to boost growth, it runs the very real risk of sparking additional capital outflows as investors seek to preempt future declines.

More important, it would do nothing to help build a healthier, more innovative economy.

2nd Front Page BusinessMirror

A12 Friday, January 22, 2016

www.businessmirror.com.ph

SC castigates BIR for violating own rules; orders telco to pay ₧313-M tax obligation

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B J R. S J

HE Supreme Court (SC) chided the Bureau of Internal Revenue (BIR) for violating its rules on waiver of the prescriptive period to assess and collect taxes that almost cost the government more than P300 million in a tax-collection case involving mobile-telephone system operator Next Mobile Inc.

In a 13-page decision penned

by Associate Justice Presbitero Velasco Jr., the SC’s Third Division granted the petition filed by the BIR seeking the reversal of the Court of Appeals decision that nullified its P313.33-million tax assessment issued against Next Mobile for having been issued beyond the three-year prescriptive period provided under the law.

The tax assessment represents deficiency income tax, final withholding tax, expanded withholding tax, increments for late remittance of taxes withheld and compromise

penalty for failure to file returns/ late filing/late remittance of taxes withheld for the taxable year ending December 31, 2001.

But, while the SC granted the BIR’s petition, it accused the latter of gross negligence amounting to “malice and bad faith” in honoring Next Mobile’s waiver of the statute of limitations despite the telco’s failure to comply with the provisions of Revenue Memorandum Order (RMO) 20-90 on the proper execution of the waiver of statute of limitations under the National Internal Revenue Code (NIRC) and Revenue Delegation

Authority Order 05-01.

In the case of Next Mobile, the SC noted it executed waivers five times, from March to October 2005, to extend the prescriptive period of assessment for its taxes due.

The BIR, according to the SC, honored the waivers despite being invalid, as they were executed without a notarized board authority; the dates of acceptance by the BIR were not indicated therein; and the fact of receipt by respondent of its copy of the second waiver was not indicated on the face of the original second waiver.

The Court noted that the BIR violated its own rules, considering that under RDAO 05-01, it is the duty of the authorized revenue official to ensure the waiver is duly accomplished and signed by the taxpayer or his authorized representative before affixing his signature to signify acceptance of the same.

It also instructs that, in case the authority is delegated by the taxpayer to a representative, the concerned revenue official shall see to it that such delegation is in writing and duly notarized.

Furthermore, it mandates that the waiver should not be accepted by the concerned BIR office and official unless duly notarized.

The negligence of the BIR may be addressed by imposing administrative liabilities against those officers responsible for the errors.”

—Supreme Court

The SC pointed out that, despite the defects, both parties continued dealing with each other on the strength of the waivers without bothering to rectify the infirmities.

“It must be remembered that by virtue of these waivers, respondent was given the opportunity to gather and submit documents to subtantiate its claims before the CIR [Commission of Internal Revenue] during investigation. It was able to postpone the payment of taxes, as well as contest and negotiate the assessment against it. Yet, after enjoying these benefits, respondent challenged the validity of the waivers when consequence thereof were not in its favor,” the SC noted. “ In other words, respondent’s act of impugning these waivers after benefiting therefrom and allowing petitioner to rely on the same is an act of bad faith,” the SC added.

On the other hand, the SC said the stringent requirements in RMO 20-90 and RDAO 05-01 are in place because they were formulated by the BIR. But, instead of strictly enforcing its provisions, the SC said the BIR violated the mandates of its very own issuances.

“Verily, if the BIR was truly determined to validly assess and collect taxes from respondent after the prescriptive period, it should have been prudent enough to make sure that all the requirements for the effectivity of the waivers were followed not only by its revenue officers but also by the respondent.

“The BIR stood to lose millions of pesos in case the waivers were declared void, as they eventually were, by the CTA [Court of Appeals], but it appears that it was too negligent to even comply with its most basic

requirements,” the SC noted.

Thus, the SC declared that the BIR and Next Mobile are “in pari delicto” or “in equal fault” and decided to uphold the validity of the waiver despite its infirmities.

To uphold the validity of the waivers would be consistent with the public policy embodied in the principle that taxes are the lifeblood of the government, the SC said.

“Finally, the Court cannot tolerate the highly suspicious situation.

In this case, the taxpayer, on the one hand, after voluntarily executing waivers, insisted on their invalidity by raising the very same defects it caused,” the SC pointed out.

“On the other hand, the BIR miserably failed to exact from respondent compliance with its rules. Moreover, the BIR was so lax such that it seemed that it consented to the mistakes in the waivers,” the SC added.

The SC stressed that such situation is dangerous and open to abuse by unscrupulous taxpayers who intend to escape their responsibility to pay taxes by hiding behind technicalities.

“The negligence of the BIR may be addressed by imposing administrative liabilities against those officers responsible for the errors,” the SC said.