BusinessMirror February 3, 2016

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A broader look at today’s business

Wednesday, February 3, 2016 Vol. 11 No. 118

El Niño to damage ₧21.8 billion worth of crops in first-half 2016 B M G P

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ROUGHT caused by El Niño could slash first-semester palay output by 900,000 metric tons (MT) and corn production by 500,000 MT, according to the Department of Agriculture (DA).

INSIDE

ERICA JONG

900,000 MT

Volume of palay that may be damaged by El Niño from January to June

Based on computation done by the BM using the National Food Authority’s (NFA) buying price, the value of the 1.4 million MT of rice and corn that may be damaged by El Niño could reach P21.8 billion.

Christopher Morales, officer in

charge of the DA’s Field Operation Service, told the BM the department’s projection does not yet take into account the two typhoons that hit the country in the last quarter of 2015.

“The estimated damage may be C  A

CAT ‘SERIAL KILLER’ STALKS DASMARIÑAS VILLAGE IN MAKATI

BMReports PAGES

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

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LUXURIOUS RESORT LIVING RIGHT AT HOME BusinessMirror E1 | Wednesday, February 3, 2016 Editor: Tet Andolong

THIS architect’s perspective is just a representation of the architectural theme of Sycamore Heights, which must be strictly followed by lot owners.

Luxurious resort living right at home ARTIST’S perspective of the central park

ARTIST’S perspective of the Sycamore Heights gate

CABLE cars at Tagaytay Highlands

B R S

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MAGINE living in a residential enclave where you wake up, mesmerized, to a splendid naturescape of lush greenery and colorful blooms with undulating hills and the serene blue waters of a famous lake sparkling in the horizon.

SWISS Funicular Train System at Tagaytay Highlands

Then, imagine your spirits being soothed by a cool, calming breeze as you bask in the morning sun, content in gazing at a spectacular view and indulging in a fresh, breezy weather while living in your dream home at Tagaytay High-

Asian-design aesthetics, and set in a private and exclusive residential community. Just a relaxing drive from Makati Central Business District, Sycamore Heights is luxurious living within reach. It is a place you can come home to any

lands’s Sycamore Heights (www. tagaytayhighlands.com).

If you can visualize it, you can have it. At Sycamore Heights, the vacation home you’ve always wanted turns into reality—a spacious abode that boasts of contemporary

day of the week.

Have a perfect getaway this weekend with your family, loved ones, friends or colleagues in unforgettable bonding times. Or you can drop everything at work and sneak in a day or two to immerse

NATURE-INSPIRED WITH MODERN SENSIBILITIES

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NOWN mostly for its vibrant cityscape nestled in an idyllic and nature-rich locale, Davao City is also fast becoming one of the most vital metropolises in the country today. In fact, many home seekers today have become attracted to its progressive metropolitan allure, which, at the same time, provides an ideal setting for raising a closely knit family.

This is the unique lifestyle proposition that Sta. Lucia Land Inc. is now introducing with its latest development in the city called Ciudad Verde, a 20-hectare residential subdivision in prime land area on Ma-a Diversion Road in Davao City. Ciudad Verde, whose enviable address makes the development a paragon for nurturing a family while providing unparalleled access to city living, is exclusively being marketed by Orchard Property Marketing Corp. (OPMC).

Ciudad Verde is conveniently located right in the middle of key establishments in the metropolis, and is just a few minutes’ drive from Davao International Airport, NCCC Mall, City Hall of Davao and Davao Medical Center.

Although located within a bustling city, the subdivision is a residential hideaway that combines a splendid tapestry of nature with modern sensibilities. The fully landscaped entrance gives an immediate sense of grandness and exclusivity. Behind its

gated walls, meanwhile, lies a view of the sprawling neighborhood that sets the tone of relaxed home living.

A distinctive quality of the development can be seen in its wellthought out architectural design that not only balances beauty and function, but is also anchored on traditional values that uphold expansive surroundings for community activities, interaction with neighbors and time with family.

Family picnics, afternoon strolls, as well as outdoor sports activities, like Frisbee, can be held at the development’s generous open spaces that are interspersed with gardens and mini cabanas. Win new friends among neighbors over swimming and basketball sessions which can be held at the clubhouse. Those who enjoy the outdoors can bond at the jogging and bike lanes located all throughout the subdivision.

The Ciudad Verde community also forms part of a larger township that pulses with the beat of modern entertainment, prolific business and leisure.

There’s the Davao Riverfront Corporate City, a 60-hectare mixed-use township developed by Sta. Lucia Land and marketed by OPMC, which features a tourism center, a business park, as well as its own residential subdivision.

Residents of Ciudad Verde can also easily enjoy the township’s entertainment, hospitality and commercial

in nature and find peace and quiet in your “alone time,” recharging your spirit.

Located at Tagaytay Midlands, Sycamore Heights offers a majestic view of the Taal Lake.

Sycamore Heights takes pride in its Central Park, where the community’s exclusive swimming pool is located, along with a children’s playground, a great lawn for friendly sports matches, a tree court for afternoon frolics, a pavilion for social gatherings, and a jogging path for those who maintain an active lifestyle. Other exclusive community pocket gardens for those who relish the outdoors include a bird-watch park, a lounge garden and a rock garden.

Homeowners are also provided membership rights to The Country Club at Tagaytay Highlands.

Th is entitles residents to worldclass amenities at the Tagaytay Highlands Golf and Country Clubs,

including breathtaking rides in the only Swiss cable car in the country, access to fine-dining restaurants, a Sports Center as a venue for both fun and relaxing activities.

“Whatever your needs and inclinations are at any given time, the mountain-resort-like development is, likewise, a safe and secure haven. It is created to be a community that promotes kinship with nature and the environment,” said Lennie A. Mendoza, senior vice president.

To cap all these, homeowners’ safety and well-being are top of mind at Sycamore Heights.

The gated community inside Tagaytay Highlands has 24-hour security and its own 24-hour emergency medical and fi refighting teams. Indeed, Sycamore Heights demonstrates a luxurious and elegant lifestyle tailored to one’s desire for utmost comfort and relaxation.

PROPERTY

establishments, and also take advantage of its burgeoning business hub that is set to further drive the booming local economy of Davao.

Within the vicinity are additional tourist attractions, like the Davao Butterfly House, Crocodile Park and the Tribu K’ Mindanawan Cultural Village. Also integrated within the township is a prestigious academic institution, Saint Paul’s College, which is a perfect fit for homeowners who want to impart traditional family values to their children.

The more active ones can visit the nearby Rancho Palos Verdes Sports and Country Club, and bask at its pioneering one-stop sports and recreation facilities and amenities. The sports and country club also complements the pioneering Rancho Palos Verdes Residential Golf enclave in the areas of Mandug and Indangan, which is just located nearby.

Ciudad Verde is one of the new property developments in Davao City’s progressive center of commerce, industry and trade. The master-planned community is one of Sta. Lucia Land’s over 200 premium residential estates in the country which have established it as a trusted partner in building developments that combine the latest in property innovations, while staying faithful to the traditional values that make truly progressive communities.

B J L. M

A HARD DECISION

A WOMAN passes by mannequins displayed at a store of a local brand of retail clothes at a mall in Makati City. Hundreds of local clothing brands are currently competing in the industry. ALYSA SALEN

Local fashion sector stitches business vs foreign brands

Sports

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EDNESDAY, FEBRUARY 3, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

BusinessMirror

MISS Universe Pia Alonzo Wurtzbach (inset) obliges to a selfie with Denver Broncos cornerback Kayvon Webster and later dances with the Carolina Panthers during Opening Night for the Super Bowl on Monday. AP

A HARD DECISION Heading into this weekend’s Super Bowl, the Broncos are still not sure if this will be the last game for 39-yearold Peyton Manning.

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B J M The Associated Press

AN JOSE, California—Denver General Manager and former All-Star John Elway realizes as well as anyone just how difficult a decision it is for an elite quarterback to retire, and he has no plans of putting pressure on Peyton Manning to make up his mind.

Heading into this weekend’s Super Bowl, the Broncos are still not sure if this will be the last game for 39-yearold Manning.

“It’s always a hard decision,” Elway said. “We’ll give him plenty of time.... Bottom line is Peyton’s going to make the best decision for him.”

The Broncos are determined to hang onto backup Brock Osweiler and not lose him in free agency.

Osweiler started seven games this season for the American Football Conference (AFC) champions as Manning struggled with a foot injury, and he performed creditably, passing for 1,967 yards and 10 touchdowns with an 86.4 quarterback rating.

“We’re hoping to get something done with Brock this off-season,” Elway said. “We needed both quarterbacks. We wouldn’t be here without both of them.”

Manning didn’t offer any hints on Monday.

“I haven’t made my mind up and I don’t see myself knowing that until after the season’s over,” the five-time MVP said.

Even Elway struggled to make the final call to walk away for good—yet, he won’t begin to compare the circumstances of his own farewell to Manning’s situation at this stage.

Elway went out a Super Bowl winner and Super Bowl Most Valuable Player (MVP) after the 1998 season with a win against Atlanta, but still ran his retirement thoughts by his father as a sounding board. Elway said “it was very nice to have” the

positive memories of going out on top.

“I was 95 percent there, but then it still took me a long time to get that last 5 percent, because it’s a big decision and something that you’ve done your whole life and now you’re not going to be able to do it anymore,” Elway said.

SUPER BOWL MEDIA CIRCUS

WHAT happens when you put Peyton Manning, Miss Universe Pia Alonzo Wurtzbach, an orange-and-blue leprechaun and 200 TV cameras into the same room?

Answer: Super Bowl Opening Night.

The National Football League (NFL) took a good idea gone surreal—what used to be known as “Media Day”—gave it a new name, added a live cover band and moved the whole thing to prime time on Monday to kick off Super Bowl week between the Denver Broncos and Carolina Panthers.

This new and amped-up interview-fest came complete with a guy walking around inside an inflatable football and a newly choreographed players’ introduction that involved all 60 players from each team walking out onto a fourstory-high catwalk.

“I had no idea that was a bridge we were standing on,” said Manning, getting ready for his fourth Super Bowl.

And, yet, the more things change, the more they stay the same.

“Will you kiss my wife?” one questioner shouted to Panthers quarterback Cam Newton, who answered his hour’s worth of questions with a sports-drink-themed towel wrapped around his head.

“I don’t think I can do that,” Newton said.

Suffice to say, Manning and Newton—one a five-time MVP, the other a strong favorite to win his first later this week—couldn’t have seen a lot of this coming, no matter how hard they prepared.

Who would play you in a movie? “Maybe a young Robert

Redford,” Manning said.

Another reporter—or make that, person with a credential— asked Manning to look into the camera and wish a Happy Chinese New Year to all his friends in that part of the world.

At one point, a reporter from a Spanish-language station cranked up some bass-heavy music and pleaded with Newton to dance.

He passed. “Got to be feeling it,” he explained.

All of this thoughtfully brought to prime time by the NFL for the first time in the 50-year history of the Super Bowl.

For decades, Media Day was a Tuesday-at-noonish affair— scheduled so as not to interrupt the teams’ schedules and to give writers the rest of the week to craft the stories.

But this year, the NFL moved it to Monday night, where minor details like dress code, off-color banter and eight-yearolds asking football players questions after bedtime barely raise an eyebrow.

NFL Spokesman Michael Signora described the scheduling change as one that allows “more fans [to] experience what has grown to become a very unique, popular Super Bowl event.”

Conveniently, the NFL-owned NFL Network captured all the action live.

Surprising they didn’t do this earlier. It’s a nod to the reality that “Media Day” has long been a “journalism-free zone”—one in which fans have willingly, for the last five years, paid money for tickets that allow them to sit in the stands and watch the madness unfold.

Speaking of which...

Late in the Broncos session, Rocky the Leprechaun—a regular at Broncos games over the years—laid a dollar bill out on the blue carpeting of SAP Center and waited to see if someone would pick it up. Several minutes passed. Nobody did.

“Crazy to see that,” he said.

What makes this week so great?

“There’s a lot of happiness,” said the gnome-turnedsociologist. “This world needs all the happiness it can get.”

Only one team will be happy come Sunday night. The Panthers are favored. Manning is a sentimental favorite; at 39, many people expect he’ll retire after this one.

That was one of the few actual news angles being worked on during Denver’s hour of fun behind the mic.

“I haven’t made up my mind and I don’t see myself knowing until the season’s over,” Manning said.

Also, the Broncos were involved in a minor bus crash after practice. There were no injuries. “Just adds to the intrigue of what we’ve had all year,” Manning said.

Back to the important stuff.

Miss Universe, one of the 5,500 “reporters” with credentials for Super Bowl-week festivities, answered more questions than she asked. Most had to do with Steve Harvey. “Yes, I am the real Miss Universe,” she said, referencing Harvey’s embarrassing gaffe a few weeks back.

Harvey was a no-show at this one.

No one missed him.

From the costumes, to the beauty queens, to the guys dressed up like Sesame Street’s Swedish Chef, this prime-time special had pretty much everything—except for Donald Trump, who was waiting on caucus results in Iowa.

Manning was asked to recollect a meeting with Trump a few years back. Maybe someday, Newton will meet The Donald, too.

“I tell kids, that oval-shaped pigskin can take you a lot of places,” said the Panthers quarterback, who won the national college championship with Auburn a few years back. “It’s taken me to the White House.”

B R C

SNEDEKER WINS AT TORREY PINES S

AN DIEGO—With his glove tucked in his back pocket and a putter in his hand, Brandt Snedeker walked off the green pumping his arms to celebrate a six-shot comeback to win the Farmers Insurance Open. That was the only part of his victory that looked normal.

He was on the practice green, not the 18th green.

Snedeker never hit a shot on Monday.

Having delivered one of the great closing rounds on the Professional Golfers’ Association (PGA) Tour on Sunday, all he could do was wait to see if it was good enough when the wind-blown tournament concluded before no spectators because of safety concerns for all the debris on the South Course at Torrey Pines.

The jangled nerves came from watching the forecast, and then the telecast. Snedeker finally went to the putting green and figured the crowd’s reaction would let him know if KJ Choi had made birdie on the 18th to force a playoff. But then he realized there was no crowd.

“I can’t tell you how excited I am to be a champion here again, how unbelievable the last 48 hours have been,” said Snedeker, the first player in more than five years to make the cut on the number and win the tournament. “Everything worked out

It started with Snedeker.

In gusts that consistently topped 40 mph and peaked at over 50 mph, he played the final 17 holes on Sunday without a bogey and closed with a three-under 69, which was nearly nine shots better than the field. The average score (77.9) was the highest for the fourth round at a regular PGA Tour event since the tour began keeping such statistics in 1983.

Snedeker won at six-under 282, the highest winning scores at Torrey Pines since Fuzzy Zoeller in 1979.

Shortly after he finished on Sunday, play was stopped for the third and final time, and for good reason. The relentless wind toppled more than dozen trees across Torrey Pines, including a 60-foot eucalyptus that fell across the left edge of the 15th fairway some 40 yards short of the green.

The forecast was for 25 mph win out of the opposite direction. That was good for Snedeker.

When he woke up on Monday morning to start the waiting game, there was hardly any wind at all. That was bad for Snedeker.

But after another two-hour delay to clean up debris, the wind showed up at just the right time and made the conditions just as tough, maybe even tougher for the final groups—as it

With the final five holes playing into the wind, birdies were scarce.

Jimmy Walker, who was leading at seven-under par through 10 holes when play was halted on Sunday, made four bogeys over his eight holes and shot 77. Choi, who was at 6 under (and tied with Snedeker) made only one bogey, and it was enough to cost him. He couldn’t reach the 14th with a fairway metal— another wedge hole on Sunday—and narrowly missed a 6-foot par putt. Choi closed with a 77 and was runner-up.

Kevin Streelman had a 74, with two late bogeys ending his hopes, and finished third. AP

SPORTS

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Conclusion

Y 2018, each Asian would s p e nd $20 3 . 5 6 (a b out P9,736.39) on clothing.

According to a report by PricewaterhouseCoopers (PwC) Llp., titled “2015-16 Outlook for the Retail and

Consumer Products Sector in Asia,” the Asian retail market is seen to grow stronger in the coming years.

Around $920 billion is expected to be spent on clothing and footwear by the Asian countries for the year 2018. Population projection for the region is expected to hit around 4.5

billion by that time.

The forecast spending on clothing is expected to be higher than the $625 billion in 2014.

The PwC report revealed that the clothing and footwear industry shares an annual growth rate of 9.5 C  A

PHL to WTO: Compel Thailand to follow tobacco ruling

The original WTO proceedings and the prosecution involve the same importer into Thailand, the same exporter, the same exporting country, the same product, the same declared customs values for the same brands, and the same circumstances of sale.”—Manila

PESO EXCHANGE RATES n US 47.6850

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HE Philippines has formally asked the World Trade Organization (WTO) to compel Thailand to act consistently with the multilateral trade body’s ruling favoring the customs valuation of Philippine-made cigarette imports.

The move was prompted by a legal action taken by the Thai government against Philip Morris Thailand (PMT),

which imports cigarettes from its Philippine affiliate.

This was viewed by the Philippines as inconsistent with the WTO decision that ruled against Thailand’s customs valuation on imported cigarettes. In an official statement submitted to the WTO, the Philippines cited Thailand for repeatedly giving

SERIAL cat killer is on the loose, and has been terrorizing residents of the posh Dasmariñas Village in Makati City, an international animalwelfare group said.

Janna Sevilla, campaign manager of the People for the Ethical Treatment of Animals-Asia (Peta-Asia), told the B USINESS M IRROR that village residents are alarmed over the disappearance of their feline pets over the past few weeks.

The group announced on Tuesday that it is giving a P50,000 reward to anyone who could provide information leading to the identification of the killer.

“This is alarming because psychokiller starts with killing animals—cats, dogs—and later on, they start hurting people,” Sevilla said.

Peta has also set up a hot line—0999-8887382—to gather information about the case and possible apprehension of the culprit.

Sevilla also prodded the local police to investigate the serial killings, stressing that cruelty to animals is a serious crime.

“The police can also investigate, but I am not aware if the police have taken interest or the Dasmariñas Village has asked the help of the police about it,” Sevilla said.

Peta has been in touch with the management of the Dasmariñas Village, and found out that at least a dozen cats have been reported missing. “Some have been found dead from unnatural causes,” a circular released by the management of the posh Makati village revealed. The circular also said that one of the cats died “slowly and painfully” from chemical burns after it was dosed with paint thinner.

“The community cats in Dasmariñas Village have been spayed and neutered through CARA Welfare’s Trap-Neuter-Return program and are fed by residents of the village,” Peta said in a separate news statement.

The management and security personnel of Dasmariñas Village are looking into the case of the missing cats, which some residents said began on January 13. “It’s imperative that any community faced with a violent act, such as the vicious killing of the community cats of Dasmariñas Village, takes measures to find the culprit or culprits and bring them to justice,” Peta Asia Vice President for International Operations Jason Baker said.

“Animal abusers are a danger to everyone: They take their issues out on whoever is available to them, human or nonhuman, and must be caught before they act again. We’re appealing to anyone with information about those responsible for these cruel crimes to come forward now so that the perpetrator or perpetrators can be prosecuted to the fullest extent of the law,” he said. According to Peta, aggravated cruelty to animals carries a penalty of up to P250,000 and three years’ imprisonment under the Animal Welfare Act of 1998, as amended by Republic Act 10631.

C  A

n JAPAN 0.3941 n UK 68.8285 n HK 6.1306 n CHINA 7.2488 n SINGAPORE 33.5361 n AUSTRALIA 33.7521 n EU 51.9433 n SAUDI ARABIA 12.7245

Source: BSP (2 February 2016 )

A2 Wednesday, February 3, 2016

BMReports BusinessMirror

Local fashion sector stitches business vs foreign brands C  A

percent in Asia, with drivers—population and midlevel salary-bracket growth—seen to push consumer expenditure in the coming years.

The integration of economies of the Asean is also expected to further drive the growth in the fashion industry.

“Open markets and two-way trade and investment are important to stimulate the local economy,” British Embassy Director of UK Trade and Investment Mike Moon said. “More investment and foreign interest means more local jobs.”

For Moon, more employment means greater access to a source of income for consumers, the majority of who are getting very young.

Tailored

WITH the younger demographic dominating in terms of spending on clothing and footwear, hiring artists a specific generation can relate to and popular with can boost local brands’ profitability.

Local brands have recently hired known global icons to carry their brand name that fares well among millennials. Penshoppe hired DKNY and Yves Saint Laurent brands model Cara Delevingne and Bench acquired the services of Taylor Lautner, a Hollywood actor known for playing Jacob Black in the Twilight Saga movie franchise. Kamiseta introduced Alicia Silverstone as brand ambassador in 2001.

But Moon notes that in terms of preference on clothing and apparel, there really is no indicator on which brands are more sought after, whether local or foreign, to the various demographics. “Not necessarily [British brands are more preferred over local brands], but people like to have the option.”

For the Philippine Franchise Association (PFA),

the use of foreign endorsers only reflect that local brands are “leveling up.”

“The good thing about this is that Philippine franchise brands [for example] are leveling up to remain relevant. By the continued raising of their global competitiveness, Philippine franchises are not only able to compete with foreign franchises, here but are also getting more confident in expanding overseas,” PFA said.

Hemlines

ACCORDING to an article on the MoneySense web site, the local franchising industry has grown by 20 percent in 2014, with member franchisees from the Association of Filipino Franchisers Inc. (Affi) reaching P63.4-billion net sales in 2013.

The franchising sector has about 19,312 local stores, according to the Affi; and homegrown brands have dominated this sector with Filipino franchisors occupying more than half of the share.

The growth rate of the franchising sector is seen to continuously increase, with many being able to penetrate the global market.

“The Philippine franchising sector continues to be a vibrant and growing sector,” according to the PFA. “The country’s growing economy has even boosted the vibrancy of the sector. Of course, the market has also become more competitive, especially with the continued influx of foreign brands.”

Franchising is seen to be one move of businesses and local retailers to remain competitive in the industry. According to the PFA, partnership between foreign brands and local distributors makes it easier for foreign brands to enter the local retail market. It is a win-win situation for both parties: foreign brands are able to sell their items in the Philippines, while local distributors get a share of the profit, the PFA said.

Local distributors, like Bench (Suyen) Corp.,

SM Group and Robinsons Retail, are only a few companies that have franchised foreign brands— Quiksilver, Roxy, Forever21, (Sfera) and Miss Selfridge—in the country.

The PFA explained local operators of these foreign franchises are called master franchisees that are responsible for the expansion of the brand in the Philippine market.

“Depending on the agreement with the foreign franchisor, some master franchisees do the expansion all by themselves, while others are allowed to subfranchise, which means that they can get local franchisees to open additional stores.”

The PFA added: “Franchising helps a business expand faster.”

“Traditionally, when an entrepreneur will open more stores, he would have to do it with his own money. But with franchising, he can open additional stores through the investment of franchisees.”

Needle eye

DESPITE the high possibility of losing revenue and market share to foreign brands, the local fashion industry’s future is still perceived as strong and developing.

“Opening the domestic market to foreign players is definitely challenging for homegrown brands but it is also an opportunity for homegrown brands to raise their global competitiveness,” the PFA said. “Because of the growing competition, homegrown brands are improving their products and services, as well as their business processes, which are helpful in making them succeed not only in our country but also in overseas markets.”

For Moon, “foreign brands provide local retailers with more options to diversify their portfolio and to have more to offer the market.

“Customer demand calls for more choice and competitive pricing.”

www.businessmirror.com.ph

El Niño to damage P21.8 billion worth of crops in first-half 2016 C  A

lower as rainfall brought by the last two typhoons that hit the country increased water in our dams,” Morales said at the sidelines of the Special Committee on Climate Change’s meeting at the House of Representatives on Monday.

El Niño started affecting the country in March last year, according to the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa).

As early as May 2014, however, Pagasa had already warned that the Philippines could be affected by El Niño. Data from the DA showed that as of August 13, El Niño had already damaged P3.32 billion worth of crops.

The corn sector bore the brunt of the extreme weather event and recorded losses amounting to P2.21 billion, while rice farmers lost P1.09 billion.

Earlier, Agriculture Assistant Secretary for Field Operations Edilberto de Luna said farmers’ apprehension over the ill effects of El Niño has caused them to forego planting, which could cause farm output to drop this year.

Farmers have been apprehensive over the availability of irrigation water for their crops. The National Water Resources Board (NWRB) cut off irrigation water for Central Luzon farms in May after Angat Dam’s water level breached the 180-meter critical level.

Last October NWRB agreed to allocate irrigation water for 14,000 rice farms upon the request of the National Irrigation Administration (NIA).

On Tuesday the agency attached to the Department of Environment

and Natural Resources revealed that it has agreed to increase the NIA’s allocation for irrigation water to 36 cubic meters per second (cms) this month from 35 cms in January.

“Farmers in Bulacan and some parts of Pampanga are also assured that sufficient amount of water will be apportioned in their whole cropping calendar. However, allocation for irrigation may decrease as the harvesting season approaches,” NWRB said in a statement.

The agency also increased the allocation of the Metropolitan Waterworks and Sewerage System to 44 cms in February from 42 cms. Despite the increase in allocation, the NWRB urged the public to continue their water-conservation measures.

“Everyone must not be complacent in the utilization of the precious water resource because there is a possibility that the El Niño may extend beyond June 2016,” NWRB said.

The DA had earlier requested funds from the national government to mitigate the ill effects of El Niño. Morales, however, said the P2.1 billion it sought from the Department of Budget and Management has not yet been released.

“The DA has projected we are going to need P3 billion to roll out El Niño-mitigation measures. We already have a regular allocation of P900 million for 2016, but this is not enough. We have requested the P2.1 billion to augment the deficit,” he said.

Morales said the DA hopes the budget could be released before February so the agency could roll out interventions to boost farm output.

BMReports BusinessMirror

news@businessmirror.com.ph

Wednesday, February 3, 2016 A3

Congress ratifies Customs modernization measure; bill awaits President’s signature

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B J M N. D C

HE House of Representatives and the Senate on Tuesday ratified the proposed Customs Modernization and Tariff Act (CMTA).

The bill seeks to modernize customs and tariff administration through full automation of operations to reduce the opportunities for corruption and technical smuggling.

The bill also seeks to enact an enabling domestic legislation to make the Tariff and Customs Code of the Philippines compliant with the Revised Kyoto Convention.

The measure will now be transmitted to Malacanang for President Benigno Aquino’s signature.

Senate President Pro Tempore Ralph G. Recto said the measure includes additional tax-exemption privileges for balikbayans, including returning overseas Filipino workers (OFWs).

The bill increases the tax-exempt value of a balikbayan box from P10,000 to P150,000.

Recto also said longer jail time and higher fines await employees of BOC

and other government agencies who are found pilfering balikbayan boxes or extorting money from OFWs in exchange for the release of handcarried or shipped cargo.

“The bill does not only increase the tax-exempt value of balikbayan box to P150,000 but also provides stronger sanctions against dishonest government people who will use the balikbayan boxes for personal profit,” he added.

According to Recto, Section 1431 of the CMTA provides the penalty of six years to 12 years imprisonment and fine of P500,000 to P1 million to government employees found guilty of extorting money from balikbayans with pasalubong cargo.

Additional penalties include forfeiture of all benefits due from service in government, as well as perpetual disqualification to hold public office, or exercising the right

to vote and to participate in any public election.

“Before, the maximum fine is P50,000. Under the CMTA, the minimum is P500,000 and the ceiling is P1,000,000,” Recto said.

He said Section 1431 of the CMTA include a “is a long list of punishable acts.” If applied to balikbayan boxes, these would cover, among others, the: tampering of balikbayan boxes; demanding other or greater sums of levies on pasalubong cargo; receipt of any fee, compensation, or reward except as prescribed by law, for the performance of any duty; neglecting to give receipts, as required by law, for any sum collected in the performance of duty.

“The proposed law’s message is clear: If we cannot protect our OFWs and Balikbayans, we have no business to be in government,” the senator said.

Agricultural smuggling The lower chamber has also ratified a measure declaring large-scale agricultural smuggling as economic sabotage.

In House Bill 6380 or the AntiAgricultural Smuggling Act, House Committee on Ways and Means and Liberal Party Rep. Romero S. Quimbo of Marikina City also proposed higher sanctions for large-scale smuggling

of agricultural products to ensure food security and stability of prices, as well as to protect the income and well-being of Filipino farmers.

Quimbo said it is a policy of the State to promote the productivity of the agriculture sector and to protect farmers from unscrupulous traders and importers who, by their illegal importation of agricultural products, especially rice, significantly affect the production, availability of supply and stability of prices and the food security of the state.

The bill was co-authored by Nacionalista Party Rep. Mark Villar of Las Pinas, Liberal Party Rep. Mylene Garcia-Albano of Davao and National Unity Party Rep. Magtanggol Gunigundo of Valenzuela.

The bill prescribes a penalty of life imprisonment and a fine of twice the fair value of the smuggled product in the kind and value described in this act and the aggregate amount of the taxes, duties and other charges legally due on the said smuggled agricultural product shall be imposed on any person who commits any of the acts enumerated under the act.

It added the penalty of imprisonment of not less than 17 years, but not more than 20 years, and a fine of twice the fair value of the smuggled agricultural product in the kind and value described in this act and

the aggregate amount of the taxes, duties and other charges legally due on the said smuggled agricultural products shall be imposed on the officers of dummy corporations, nongovernment organizations, associations, cooperatives, or single proprietorships who knowingly sell, lend, lease, assign, consent or allow the unauthorized use of their import permits for purposes of smuggling.

Under the bill, economic sabotage refers to any act or activity which undermines, weakens or renders into disrepute the economic system or viability of the country or tends to bring out such effects and shall include, among others, price manipulation to the prejudice of the public, especially in the sale of basic necessities and prime commodities.

Agricultural products, meanwhile, refers to any agricultural commodity or product, whether plant based, animal based, raw or processed, including any commodity or product derived from livestock that is available for human or livestock consumption. This definition includes fish, forestry, seeds, poultry and dairy products that have undergone various degrees of processing.

The bill said the crime of largescale agricultural smuggling as economic sabotage, involving sugar, corn, pork, poultry, garlic, onion, car-

rots, fish, and cruciferous vegetables, in its raw state, or which have undergone the simple processes of preparation or preservation for the market valued at a minimum amount of P10 million, as determined by the Bureau of Customs, is deemed committed through any of the following acts: n Importing or bringing into the Philippines without the required import permit from the regulatory agencies. n Using import permits of persons, natural, juridical or entities without juridical personality other than those specifically named in the permit. n Using fake, fictitious or fraudulent import permits or shipping documents, names of natural or juridical persons or entities without juridical personality, and addresses of consignee. n Selling, lending, leasing, assigning, consenting or allowing the use of import permits of corporations, non-government organizations, associations, cooperatives, or single proprietorships by other persons. n Misclassification, undervaluation or misdeclaration upon the filing of import entry and revenue declaration with the BOC in order to evade the payment of rightful taxes and duties to the government.

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Wednesday, February 3, 2016

BMReports BusinessMirror

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IN this January 27 photo, Aedes aegypti mosquitoes sit in a petri dish at the Fiocruz institute in Recife, Pernambuco state, Brazil. The mosquito is a vector for the proliferation of the Zika virus spreading throughout Latin America. New figures from Brazil’s Health Ministry show that the Zika virus outbreak has not caused as many confirmed cases of a rare brain defect as first feared. AP

Miaa moves to prevent entry of Zika as WHO declares its spread an international emergency

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HE Manila International Airport Authority (Miaa) promised to provide everything the Bureau of Quarantine officials would need to prevent the entry of the Zika virus in the country.

This developed as the World Health Organization (WHO) declared that the spread of the Zika virus now constitutes an international public-health emergency.

“We are in constant communication with the Department of Health [DOH]... asking [the Bureau of] Quarantine what the Miaa can give to prevent the entry of Zika virus through the international airports,” Miaa Senior Assistant General Manager Vicente Guerzon said.

He said quarantine officials have been constantly monitoring arrivals at the Ninoy Aquino International Airport’s (Naia) three passenger terminals that cater to international arrivals.

The Zika virus, however, is not new to the Philippines.

“The last recorded Zika virus victim in the Philippines was in 2012, and he survived the disease,” DOH Spokesman Lyndon Lee-Suy said.

Lee-Suy added that the department is ready to handle cases of Zika virus, which is “relatively milder compared to dengue.”

Meanwhile, the premier airport had requested health officials and airport personnel to be extra vigilant in detecting passenger afflicted with the virus.

The staff members of some airlines had started spraying insecticide inside the airplane’s cabin, including overhead compartments and under the seats in the hope of killing any airborne mosquitoes that have hitched a ride from other countries.

The DOH will investigate reported news that a Filipino in Honduras have been infected with the Zika virus.

The virus, which spreads to human through mosquito bites, is not easily transmittable and the symptoms of the virus can be managed, the DOH said. The DOH called on the public to keep

their surroundings clean and destroy all possible breeding grounds of mosquitoes in their communities to prevent this kind of virus.

The Center for Disease Control (CDC) said about one in five people infected with Zika virus become ill. The most common symptoms of Zika are fever, rash, joint pain, conjunctivitis (red eyes), muscle pain and headache.

The incubation period (the time from exposure to symptoms) for Zika virus disease is not known, but is likely to be a few days to a week. The illness is usually mild, with symptoms lasting for several days to a week.

Zika virus usually remains in the blood of an infected person for a few days, but it can be found longer in some people.

Severe onset of the disease requiring hospitalization is uncommon and deaths are rare, the CDC added. Those diagnosed with the symptoms of Zika are found to have similar experiences to those infected with dengue and chikungunya, diseases spread through the same mosquitoes that transmit Zika.

Those who have traveled to other countries with known Zika epidemic are advised to see a healthcare provider and tell them when and where they traveled.

No vaccine or medications are available to prevent or treat Zika infections, the CDC said.

News reports added that vaccines being developed against Zika virus wil be available in about four to five years. Those having symptoms are advised to drink fluids to prevent dehydration and take acetaminophen to relieve fever and pain. They are advised not to take aspirin and other nonsteroidal anti-inflammatory drugs (NSAIDs), like ibuprofen and naproxen.

“Aspirin and NSAIDs should

Number of people in the Americas that the WHO fears could be infected by the Zika virus IN this February 1 photo, China’s Margaret Chan, general director of the World Health Organization (WHO), informs the media during a news conference after the first Meeting of the International Health Regulations Emergency Committee concerning Zika virus, at the WHO headquarters in Geneva, Switzerland. AP

be avoided until dengue can be ruled out to reduce the risk of hemorrhage [bleeding]. If you are taking medicine for another medical condition, talk to your health-care provider before taking additional medication,” the CDC said.

The WHO declared on Monday that explosive growth of the mosquito-borne Zika virus, which has been spreading rapidly in the Americas and may be linked to birth defects, constitutes an international public-health emergency, signaling a new phase in the global effort to battle the virus. The United Nations health agency made the decision after convening an panel of experts in Geneva amid reports from Brazil linking the virus to microcephaly, a birth defect of the brain in which babies are born with abnormally small heads. The recent “cluster” of microcephaly cases and other neurological disorders reported in Brazil followed a similar cluster in French Polynesia in 2014, WHO Director General Margaret Chan said in a statement.

“A coordinated international response is needed to improve surveillance, the detection of infections, congenital malformations and neurological complications, to intensify the control of mosquito populations, and to expedite the development of diagnostic tests and vaccines to protect people at risk, especially during pregnancy,” Chan said.

Last week the WHO declared a threat of “alarming proportions,” warning that the Zika virus was “spreading explosively” across the Americas and could infect as many as 4 million people.

Mond ay ’s dec l a rat ion w i l l serve as a kind of global notice of the threat, but the WHO did not move to restrict travel or trade in regions where the virus is found. It will likely trigger additional resources being put toward researching the virus and preventing its spread; to date, officials say, the only cases of Zika diagnosed in the United States involve people who are believed to have contracted it while traveling abroad.

The WHO, however, says transmission will probably spread to all the countries and territories in the Americas hosting the mosquito that transmits the virus known as the Aedes mosquito including the US mainland.

Some reports have also linked the Zika virus to cases of GuillainBarre syndrome, or GBS, which can cause temporary paralysis.

Among other recommendations, the committee of experts convened by the world health body suggested that surveillance for microcephaly and GBS “should be standardized and enhanced, particularly in areas of known Zika virus transmission and areas at risk of such transmission.”

The panel also urged additional research into clusters of microcephaly and other disorders linked to Zika. “As these clusters have occurred in areas newly infected with Zika virus, and in keeping with good public-health practice and the absence of another explanation for these clusters, the committee highlights the importance of aggressive measures to reduce infection with Zika virus, particularly among pregnant women and women of childbearing age,” the panel said.

The illness from the Zika virus is not considered serious and symptoms including rashes, joint pain and reddened eyes are usually mild and last for several days or a week, experts say. But the reports of links to birth defects from Brazil have triggered alarm.

There is no vaccine for the virus.

The Zika illness is common in parts of equatorial Africa and Southeast Asia. Outbreaks have also been reported in the Pacific islands. But the disease did not begin to spread widely in the Americas until May, when an outbreak was reported in Brazil.

It has since spread to 23 countries and territories in the region.

In Brazil, where Zika has taken on the character of a national emergency, health authorities said they plan to deploy 220,000 members of the military on a single day in February to distribute pamphlets across the country to educate people about the risks posed by mosquitoes.

The government of El Salvador, meantime, has advised people to put off having children for two years because of the threat. Residents in Brazil and other affected have also been urged to clean up stagnant pools of water and containers in which the mosquitos tend to breed.

Containers that can hold even small amounts of water buckets, flowerpots, tires should be emptied, cleaned or covered to prevent mosquitoes from breeding in them, health authorities say.

Experts say knowledge of the link between the Zika virus and birth defects is evolving and not yet confirmed. But the reported links from Brazil were sufficient to declare an emergency, officials said.

Authorities are urging pregnant women to take several precautions, including delaying travel to areas

where the virus is present. Pregnant women living in areas where the virus exists have also been advised to consider a number of protective measures, such as wearing long sleeves and pants and wearing mosquito repellent.

Monday’s declaration that the Zika virus was a Public Health Emergency of International Concern was the first such determination by the WHO since 2014 outbreak of Ebola in West Africa. In the case of Ebola, the UN agency was harshly criticized for what detractors called its slow response.

Ebola had already killed more than 1,000 people by the time the agency sounded the alarm in August 2014. Ebola has now sickened more than 26,000 people and killed at least 11,316.

Brazil President Dilma Rousseff has issued a decree allowing public officials to enter abandoned or empty homes by force if necessary, in the absence of persons authorized to permit entry.

The measure is part of the country’s efforts to eradicate the breeding grounds of the Aedes aegypti mosquito, which has been identified as a vector of the Zika virus, as well as of dengue fever, chikungunya, and yellow fever.

The new powers, which came into force on Monday, are part of a “Provisional Measure” that allows public officials to request police assistance in carrying out forced entry if necessary, and also authorizes the carrying out of educational campaigns and the creation of public guidelines.

Brazil’s efforts to target the mosquito’s breeding grounds are mainly focused in the northeastern Brazilian states of Bahia, Pernambuco and Paraiba, whose governors attended a teleconference meeting with the president on Friday, also accompanied by the governors of Rio de Janeiro and São Paulo states.

At a news conference following the meeting, Rousseff admitted that Brazil was “ losing the fight against Aedes,” but vowed that it would not lose the war.

Speaking alongside Health Minister Marcelo Castro, Rousseff said there could be “no contingencies or limits” to the resources the government would make available in the fight against Zika, which she identified as a threat to public health.

With Claudeth Mocon-Ciriaco, MCT

news@businessmirror.com.ph

AseanWednesday BusinessMirror

Wednesday, February 3, 2016 A5

The spiraling 1MDB state-fund controversy

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ROM the moment Malaysian Prime Minister Najib Razak took over the fund in 2009, 1Malaysia Development Bhd. (1MDB) has remained controversial.

It was set up by the oil-rich state Terengganu and was turned by Najib into a federal government-owned development fund.

Plagued by heavy debt and questions about its management, the state of 1MDB grew into a scandal that moved closer and closer to the heart of government, culminating in multiple investigations—in Malaysia and overseas— into the company. It prompted calls for Najib’s ouster, and recalled the nation’s long struggle with corruption and economic disappointment.

Here is a timeline of 1MDB’s evolution and how it turned into one of Najib’s biggest crises as Malaysia’s leader. n December 2008 Terengganu state gets federal government approval to set up the Terengganu Investment Authority as a sovereign wealth fund. n April 2009 Najib Razak becomes prime minister. n May 2009 TIA sells its first ringgit bonds, amounting to 5 billion ringgit. They’re guaranteed by the federal government. n July 2009 The federal government takes over the TIA and renames it 1Malaysia Development Bhd. Najib would chair its advisory board. n September 2009 1MDB sets up a $2.5-billion joint venture with PetroSaudi International. n December 2009 Goldman Sachs wins approval from the Securities Commission of Malaysia to set up fund management and corporate advisory operations in the country. n March 7, 2012 1MDB acquires Tanjong Energy Holdings from Malaysian billionaire T. Ananda Krishnan for 8.5 billion ringgit. n March 2012 An annual report that was released later would show 1MDB had 7.8 billion ringgit of debt at the end of March 2012. n May 21, 2012 1MDB raises $1.75 billion by selling 10-year notes yielding 5.99 percent. n July 2012 Najib inaugurates 1MDB’s Tun Razak Exchange, a financial center, on 70 acres of prime Kuala Lumpur real estate. n August 2012 1MDB agrees to buy Genting’s domestic power-generation assets for 2.3 billion ringgit.

The company was reported to be planning to raise as much as $2 billion in an initial public offering of its power assets. n October 2012 1MDB raises $1.75 billion by selling 10-year bonds yielding 5.75 percent. n March 19, 2013 1MDB raises $3 billion by selling 10-year bonds yielding 4.4 percent. n March 25, 2013 1MDB appoints Mohd Hazem Abd Rahman as CEO, replacing Shahrol Halmi. n May 2013 Bloomberg News reports that Goldman Sachs Group Inc. made about $500 million arranging three bond sales in the past year for 1MDB, amounting to about 7.7 percent of the face value of the securities.

The ruling Barisan Nasional coalition wins the election. Najib begins a second term. n July 2013 1MDB agrees to pay 1.2 billion ringgit for a 75-percent stake in a 1,400-megawatt (MW) coal-fired power, pushing its spending bill on energy assets to 12 billion ringgit Fitch Ratings Ltd. cuts its outlook for Malaysia’s credit rating to negative, citing weakening state finances and rising contingent liabilities. n August 2013 1MDB is said by people familiar with the matter to have obtained a six-month extension on a 6.17-billion-ringgit bridge loan, giving it more time to sell shares in its power business to repay debt. n February 2014 1MDB and Mitsui Co. win the bid to build and operate a 2,000-MW coal-fired power plant, known as Project 3B. 1MDB is granted till end-March 2014 to file its annual return for the year ended March 2013.

It appoints Deloitte to complete its audit after saying it mutually agreed with KPMG to part ways. It was later revealed in a parliamentary committee probe that KPMG’s services were terminated in December 2013. n April 2014 1MDB reports financial results for the year ended March 31, 2013, during which debt surged to 36.3 billion ringgit. n July 2014 1MDB starts work on an initial public offering (IPO) of its energy unit Edra Global that is expected to raise more than $3 billion, with listing targeted for the fourth quarter.

n August 2014 Former Malaysian leader Mahathir Mohamad, a veteran of the United Malays National Organization (Umno) party, says he is withdrawing support for Najib. The following month, Mahathir says 1MDB is contributing to Malaysia’s higher debt levels and says the country could end up like Argentina if borrowings are not repaid.

I would like the Umno members of parliament, the heads of division to remove him (Najib). You are selling your soul, your country, your race—Mahathir Mohamad. n November 2014 1MDB reports financial results for the year ended March 31, 2014, during which debt surged to 41.9 billion ringgit. The same month, it was said by people familiar with the matter to have submitted an application for an IPO of Edra that may raise about $4 billion and reported to be seeking to raise 8.4 billion ringgit via Islamic bonds. n December 2014 1MDB is said by people familiar with the deal to defer the sale of Islamic bonds as it seeks to delay construction of Project 3B. n January 2015 1MDB appoints Arul Kanda as president and executive director, replacing Mohd Hazem, who steps down as CEO. The Edge newspaper reports 1MDB failed to repay a 2-billion-ringgit loan that was initially due in November 2014, causing Malaysian credit default swaps to rise.

Kanda, in an interview with Bloomberg a day after he was appointed, insists 1MDB is a “responsible” borrower.

People familiar with the matter say the IPO of Edra will be delayed as 1MDB tries to resolve debt repayments. n February 2015 1MDB settles the 2-billion-ringgit bank loan with money from billionaire Ananda Krishnan after reportedly missing two repayment deadlines and getting at least one extension.

1MDB says it will break up its assets and monetize them after a strategic review of its business, signaling it plans to wind down. It said it wouldn’t undertake any new investments or projects after it sets up standalone entities for its two major property projects and raises cash from selling Edra. n March 2015 1MDB is reported by The Star newspaper to need to resubmit its application for Edra if the listing is still to proceed.

Najib instructs the country’s auditor general to independently verify the financial accounts of 1MDB—the first of four investigations into the company.

1MDB gets 970 million ringgit in standby credit from the Ministry of Finance.

The Finance Ministry says 1MDB is in talks to transfer Project 3B as it doesn’t have the capacity to take on 8 billion ringgit of debt.

Fitch says Malaysia’s credit rating is “more than 50 percent likely” to be downgraded in part as 1MDB struggles to meets its debt obligations.

The Monetary Authority of Singapore says it’s helping in a Malaysian probe into 1MDB after a report that a Swiss bank in Singapore is keeping 1MDB’s money redeemed from investments in Cayman Islands funds.

Malaysia hires CIMB Group Holdings Bhd. to find a potential buyer for Edra as it seeks alternatives to an IPO. A week later, the finance ministry scraps the plan and says it remains focused on a share sale. n April 2015 Najib says he will remain as leader for as long as he has the mandate of his party and citizens, brushing off calls from Mahathir Mohamad for him to step down over alleged mismanagement of the economy and 1MDB. Mahathir says Najib has lost the trust of Malaysians, and their party will lose in the next general election if he stays as leader. n May 2015 The nation’s Hajj pilgrims fund Lembaga Tabung Haji says it bought land within the Tun Razak Exchange project for 188.5 million ringgit, prompting criticism from Muslim Malaysians nationwide as they protest their facilitated savings being used as what they perceive to be a bailout. Tabung Haji says it will sell the land.

Najib instructs the auditor general to expedite investigation of 1MDB. Abu Dhabi-based International Petroleum Investment and its Aabar Investments unit agree to provide $1 billion to 1MDB so that it can pay off $975 million of a Deutsche Bank-led syndicated loan. n June 2015 Malaysia’s central bank says it has started a formal inquiry into 1MDB to examine any contravention of its rules and legislation.

1MDB says it has repaid a $975-million

IN this July 8, 2015, photo, a 1 Malaysia Development Bhd. logo is set against the Petronas Twin Towers at the flagship development site, Tun Razak Exchange in Kuala Lumpur, Malaysia. An indebted Malaysian state investment fund says it will cooperate with Swiss prosecutors whose investigation indicated that $4 billion may have been misappropriated from Malaysian stateowned companies. AP syndicated loan led by Deutsche Bank.

1MDB invites proposals for equity investments in its Bandar Malaysia property project, a 495-acre mixed-property development in Kuala Lumpur.

Malaysia’s cabinet announce Tenaga will take over 1MDB’s stake in Project 3B. Thai police detain a former executive of PetroSaudi International Ltd. for allegedly extorting money and leaking information on 1MDB. The Bangkok Post reports that the detainee denied the allegations, while 1MDB pledged cooperation in the investigation.

Fitch leaves Malaysia’s credit rating unchanged and revises the outlook to stable from negative. n July 2015 Almost $700 million in cash linked to 1MDB is believed to have been deposited in Najib’s bank accounts, the Wall Street Journal reports, citing a government probe. Najib says he never took funds for personal gain and threatens to sue the paper.

1MDB denies it funneled funds to Najib.

I am not a thief. I am not a traitor and will not betray Malaysians and Malaysia—Najib Razak Malaysia investigators visit the Kuala Lumpur headquarters of 1MDB and remove documents. The auditor general says an initial audit of 1MDB does not reveal any suspicious activity.

A preliminary report by the auditor general finds no evidence of wrongdoing by 1MDB or proof that $700 million went to a “certain individual,” says Ahmad Husni Hanadzlah, Malaysia’s second finance minister. A parliamentary committee is told that while the auditor general has found no suspicious activity, 1MDB didn’t hand over all the requested documents related to its finances.

Tenaga submits a nonbinding proposal to buy Edra’s asserts.

The government suspends the publishing permit of the Edge newspaper, judging that its coverage of 1MDB threatens public order and national security.

Najib removes Deputy Prime Minister Muhyiddin Yassin, who has called for answers on 1MDB including its investment decisions. The government says it’s replacing Attorney General Abdul Gani Patail for health reasons. Abdul Gani was part of a task force investigating 1MDB and the funds in Najib’s accounts. The parliamentary Public Accounts Committee probe into 1MDB is halted temporarily after four of its members were appointed to cabinet.

n August 2015 The Malaysian Anti-Corruption Commission says its investigations find that 2.6 billion ringgit that allegedly ended up in Najib’s personal accounts are donations and not from 1MDB. The donors are from the Middle East.

The central bank says it has completed its investigations into 1MDB and has submitted the results to the attorney general.

Swiss authorities say they have opened criminal proceedings against two unnamed 1MDB executives and what it referred to as unknown persons on charges of suspected corruption, misconduct in public office and money laundering.

Hundreds of thousands of Malaysians protest at an antigovernment rally calling for Najib to step down. n September 2015 The Swiss attorney general freezes “several tens of millions” of dollars in bank assets related to 1MDB. A Malaysian court overturns the government’s suspensions of two publications by the Edge 1MDB is being probed by the US Federal Bureau of Investigation over money laundering, while the US Justice Department is looking into property purchases associated with Najib’s stepson, according to reports by the Wall Street Journal and New York Times. 1MDB tells Reuters it hasn’t been contacted by the FBI, or investigators in Switzerland and Singapore. n October 2015 1MDB gets a six-month extension to submit its accounts for the year ended March 2015. Najib’s administration needs to complete investigations into 1MDB soon to help resolve a crisis in confidence in the country, the rulers of Malaysia’s 13 states said.

Bank Negara Malaysia says it recommended to the attorney general that it initiate criminal prosecution against 1MDB for breaches under the Exchange Control Act 1953. The attorney general’s Office says 1MDB didn’t commit an offense in the central bank’s probe. The central bank submits a request for the decision to be reviewed and the attorney general decides to maintain its conclusion as no new evidence has been presented.

The central bank says it will revoke three permissions granted to 1MDB for investments abroad totaling $1.83 billion and also issued a direction under the Financial Services Act 2013 to 1MDB to repatriate the amount of $1.83 billion to Malaysia

and submit a plan to the bank for this purpose. n November 2015 Mahathir is quizzed by police over his criticism of Najib.

1MDB sells Edra assets to China General Nuclear Power Corp. for 9.83 billion ringgit, and the buyer will assume all gross debt and cash of Edra and its subsidiaries. The transaction is expected to be completed in February. n December 2015 Najib gives his statement to antigraft officials on the 2.6 billion ringgit in his accounts. They submit a report of their findings to the attorney general’s Chambers with recommendations for action. n January 2016 Malaysia’s Attorney General Apandi Ali on January 26 calls a news conference to announce he is satisfied, after reviewing facts and evidence, that no criminal offense has been committed by Najib. The prime minister received a “personal contribution” of $681 million from the Saudi royal family in early 2013 and he returned $620 million in August that year that was not utilized, Apandi said. He did not specify what the remainder of the funds was used for.

“I am here to clear the prime minister,” Apandi said. Under Malaysia’s federal constitution, the decision to initiate criminal prosecution lies solely with the attorney general.

“This issue has been an unnecessary distraction for the country. Now that the matter has been comprehensively put to rest, it is time for us to unite and move on,”Najib Razak said.

Three days later, Switzerland’s prosecutors say they are seeking legal assistance from Malaysia. The prosecutors say the Swiss probe into 1MDB revealed “serious indications” that about $4 billion may have been misappropriated from state companies in Malaysia. The Malaysian attorney general says his office will cooperate and review the Swiss findings.

1MDB says it has not been contacted by any foreign legal authorities on any matters relating to the company. n February 2016 Switzerland says Najib is “not one of the public officials under accusation” in its probe into alleged diversion of funds.

Answering queries about 1MDB, Singapore says it has seized “a large number” of bank accounts in connection with possible money-laundering in the country. 1MDB reiterates it hasn’t been contacted by any foreign legal authorities. Bloomberg News

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A6 Wednesday, February 3, 2016 | Editor: Lyn Resurreccion

Brexit risk absent as futures show BOE in step with Fed in 2017

I REPUBLICAN presidential candidate Sen. Ted Cruz, Republican-Texas, arrives for a caucus night rally on Monday in Des Moines, Iowa. Cruz sealed a victory in the Republican Iowa caucuses, winning on the strength of his relentless campaigning and support from his party’s die-hard conservatives. AP/CHRIS CARLSON

Cruz defeats Trump in Iowa; Clinton, Sanders in tight race

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ES MOINES, Iowa—Ted Cruz, a fiery, conservative Texas senator loathed by his own party’s leaders, swept to victory in Iowa’s Republican caucuses on Monday, overcoming billionaire Donald Trump and Florida Sen. Marco Rubio.

Among Democrats, Hillary Clinton and Vermont Sen. Bernie Sanders were deadlocked in a tight race.

Cruz’s victory was a harsh blow to Trump, the supremely confident real-estate mogul who has roiled the Republican field for months with controversial statements about women and minorities.

The victory in the first Republican nominating contest ensures that Cruz will be a force in the presidential race for weeks to come—if not longer. The first-term Texas senator now heads to next week’s New Hampshire primary as an undisputed favorite of the furthest right voters, a position of strength for drawing in evangelical voters and others who prioritize an abrupt break with President Barack Obama’s policies.

Perh aps, most i mpor t a nt , Cruz’s win denied Trump a huge opportunity to gain momentum heading into New Hampshire.

Trump parlayed his fame as a realestate mogul and reality television star into large rallies, extensive media coverage and national poll numbers that before Monday night had established him as the

Republican front-runner. “Iowa has sent notice that the Republican nominee and next president of the United States will not be chosen by the media, will not be chosen by the Washington establishment,” Cruz told supporters.

Trump came in second, only slightly ahead of Rubio, who achieved a credible showing by nearly besting Trump. Rubio’s stronger-than-expected finish could help cement his status as the favorite of mainstream Republican voters who worry that Cruz and Trump are too caustic to win the November general elections.

The Iowa caucuses kicked off voting in the 2016 presidential race, a tumultuous contest with u ne x pected c a nd id ates c ha llenging both the Republican and Democratic establishments.

Candidates faced an electorate deeply frustrated with Washington. While the economy has improved under Obama, the recovery has eluded many Americans.

New terror threats at home and abroad have increased national security concerns.

In the Democratic race, vote

FORMER President Bill Clinton (left) and Democratic presidential candidate Hillary Clinton acknowledge supporters during a caucus night rally at Drake University in Des Moines, Iowa, on Monday. AP/PATRICK SEMANSKY

counts past the 90-percent point in tabulations showed Clinton and Sanders in a virtual tie.

Democratic caucus-goers were c ho o s i n g b e t we e n C l i nton’s pledge to use her wealth of experience in government to bring about steady progress on Democratic ideals, and Sanders’s call for radical change in a system rigged against ordinary Americans.

Clinton, the former secretary of state, US senator and first lady, entered the Democratic race as the heavily favored front-runner.

She was hoping to banish the possibility of dual losses in Iowa and in New Hampshire, the nation’s first primary, where she trails Sanders, who is from the neighboring state of Vermont.

Two straight defeats could set off alarms within the party and throw into question her ability to defeat the Republican nominee.

Clinton appeared before voters to declare she was “breathing a big sigh of relief.” But she stopped short of claiming victory and declared herself ready to press forward in “a real contest of ideas.”

Sanders had hoped to replicate Obama’s pathway to the presidency by using a victory in Iowa to catapult his passion and ideals of “democratic socialism” deep into the primaries.

“It is too late for establishment politics and establishment economics,” said Sanders, who declared the Democratic contest in Iowa “a virtual tie.” Despite Sanders’s strong showing, he still faces an uphill battle against Clinton, who has deep ties throughout the party’s establishment and a

strong following among a more diverse electorate that plays a larger role in primary contests in February and March.

Iowa has long led off the stateby-state contests to choose delegates for the parties’ national conventions. Historically, a victory has hardly assured the nomination— Iowa accounts for only about 1 percent of the delegates who select the nominee. But a win there, or even an unexpectedly strong showing, can give a candidate momentum and media attention, while a poor showing can end a candidacy.

Rubio cast his stronger-thanexpected finish as a victory. “ We h ave t a k e n t he f i r st step, but an important step, to w inning the nomination,” the Florida senator said at a campaign rally in Des Moines.

Trump sounded humble in defeat, saying he was “ honored ” by the support of Iowans. And he vowed to keep up his fight for the Republican nomination.

“We will go on to easily beat Hillary or Bernie or whoever the hell they throw up,” Trump told cheering supporters. Some of the establishment Republican candidates have been focusing more on New Hampshire than Iowa, including former Florida Gov. Jeb Bush, Ohio Gov. John Kasich and New Jersey Gov Chris Christie.

The caucuses marked the end of at least two candidates’ White House hopes. Former Maryland Gov. Martin O’Malley ended his longshot bid for the Democratic nomination and former Arkansas Gov. Mike Huckabee dropped out of the Republican race. AP

F Britain is months away from quitting the European Union (EU), the message has yet to reach one corner of the rates market. Based on futures contracts, investors are betting the Bank of England (BOE) will tighten policy at the same pace as the Federal Reserve (the Fed) next year. That’s wrong, says Morgan Stanley, which puts the probability of a so-called Brexit at more than a third.

A vote to leave the EU could force the BOE to keep interest rates at a record low for an “extended period of time” or even lower them to shore up the economy as Britain ends its 43-year membership in a 500-million-person bloc that buys almost half its exports.

“When we look across the market, it doesn’t seem obvious to us the market is assigning much probability to that the UK might vote to exit the EU,” said Anton Heese, the London-based head of European rates strategy at Morgan Stanley.

The yield difference between the December 2016 and December 2017 short-sterling contracts and the spread for equivalent eurodollar contracts have converged this month, showing expectations that both the UK and the US central banks will tighten monetary policy at a similar pace in 2017, according to Morgan Stanley.

The gap narrowed to 1 basis point last week, from 15 basis points at the start of December, when markets were pricing in more monetary tightening from the Fed than the BOE. Prime Minister David Cameron has indicated he’ll hold the referendum on whether to stay in the EU in June if he can pry sufficient concessions from other members of the 28-nation club to seal a deal at a summit later this month. Much depends on whether a compromise can be struck over limiting welfare benefits to new

migrants, the most contentious part of his renegotiation.

Conflicting polls

OPINION polls have given conflicting indications of voting intentions. The latest telephone surveys by ComRes and Ipsos MORI showed leads of 18 and 19 percentage points for staying in. Three online surveys have indicated a much closer race, with a YouGov Plc. poll published on Monday showing 42 percent of respondents in favor of leaving, compared with 38 percent for staying in the bloc.

Europe’s largest exchange, Bats Global Markets Inc., warned last week that if the UK withdrew, it would hurt the business climate in London and prompt the company to move some or all of its operations out of the UK.

Subdued BOE

THE outlook for the UK interest rates remains subdued, with BOE Governor Mark Carney telling lawmakers in London on January 26 that inflationary pressure remain too weak to justify ending almost seven years of emergency stimulus.

Adjusted short- sterling contracts aren’t fully pricing in a quarterpoint BOE rate hike until the end of next year.

Analysts at Barclays Plc., including London-based fixed income strategist Moyeen Islam, said “markets may misjudge” the impact of the referendum and are understating the likelihood of an exit. In a client note dated January 28, they wrote their view “does not appear to be shared by markets, judging by pricing in FX, rates and credit.”

A chaotic exit from the EU could mean the BOE “would wait longer to tighten policy and with Bank Rate still at 0.50 percent, there is even the possibility of a rate cut,” the Barclays analysts wrote. Bloomberg News

Britain OKs controversial gene-editing experiments

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ONDON—In a landmark decision that some ethicists warned is a step down the path toward “designer babies,” Britain gave scientists approval on Monday to conduct gene-editing experiments on human embryos.

The researchers won’t be creating babies— the modified embryos will be destroyed after seven days. Instead, they said, the goal is to better understand human development, so as to improve fertility treatments and prevent miscarriages. The decision by Britain’s Human Fertilisation and Embryology Authority marks the first time a county’s national regulator has approved the technique.

Permission isn’t explicitly required in many other countries, including the US and China. The US does not allow the use of federal funds for embryo modification, but there is no outright ban on gene editing. Gene editing involves deleting, repairing or replacing bits of DNA inside living cells in a biological cutand-paste technique that scientists say could one day lead to treatments for conditions like HIV or inherited disorders, such as muscular dystrophy and sickle cell disease.

A team led by Kathy Niakan, an embryo and stem-cell specialist at London’s new Francis Crick Institute, received the OK to use gene editing to analyze the first week of an embryo’s growth. The research will “enhance our understanding of IVF [in vitro fertilization] success rates by looking at the very earliest stage of human development,” said Paul Nurse, director of the institute. None of the embryos will be transferred into women. They will be allowed to develop from a single cell to around 250 cells, after which they will be destroyed.

Peter Braude, a retired professor of obstetrics and gynecology at King’s College London, said the mechanisms being investigated by Niakan and her colleagues “are crucial in ensuring healthy, normal development and implantation” and could help doctors refine fertility treatments.

Braude is not connected to Niakan’s research.

There are a few methods of gene editing, but the technique Niakan’s team plans to use is known as CRISPR-Cas9, a relatively fast, cheap and simple approach that many researchers are keen to try.

Some critics warn that tweaking the genetic code this way could be a slippery slope that eventually leads to designer babies, where parents not only aim to avoid inherited diseases but also seek taller, stronger, smarter or better-looking children. Many religious groups, including the Catholic Church, argue that manipulating embryos amounts to “playing God.” Some scientists have voiced concern that tinkering with genes might have unintended consequences not apparent until after the babies are born—or generations later. And some fear such practices will only widen the gap between rich and poor by enabling the wealthy to create superbabies.

“This is the first step on a path that scientists have carefully mapped out toward the legalization” of genetically modified (GM) babies, David King of the advocacy group Human Genetics Alert said last month when British regulators took up the issue. Marcy Darnovsky, executive director of the Center for Genetics and Society, a nonprofit advocacy group in the US, warned that tampering with human genetics carries “dire safety and societal risks.”

“Now is the time to ensure that gene editing is not used to create GM babies and that we stay off the high-tech road to new forms of inequality and to a consumer-driven form of eugenics,” she said in a statement. Around the world, laws and guidelines vary widely about what kind of research is allowed on embryos, since such experiments could change the genes of future generations. Countries such as Japan, China, India and Ireland have unenforceable guidelines that restrict editing of the human genome. Germany and other countries in Europe limit research on human embryos by law. AP

World

sMirror

news@businessmirror.com.ph | Wednesday, February 3, 2016

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Japan trading houses facing $13-B hit on commodity misfire

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HANDFUL of companies that have dominated almost ever y kind of raw-material business in Japan for decades may take as much as $13 billion in charges during the current fiscal year.

T he g loba l com mod it y slump is squeezing the sogo shosha, or general trading houses like Mitsubishi Corp. that supply everything from gasoline and steel to seafood a nd nood les in resource poor Japan. They invested in metals and energ y only to see prices fall. A lready, Sumitomo Corp. has taken a $650 -million writedown at a nickel project in Madagascar. Its rivals will probably report impairments as soon as this week, says Goldman Sachs Group Inc. Sogo shosha companies—including Mitsui & Co. and Marubeni Corp.—have interests throughout the economy. They are miners, salesmen, consultants, brokers, shippers and bankers, and their corporate cultures are revered.

A t rad ing-house job is considered a prestigious career path, with the prospect of lifetime employment as a “shosha man,” someone often characterized as a jet-setting business negotiator. Mitsubishi, Mitsui, Sumitomo and Marubeni “are facing quite large revisions,” said Hiroyuki Sakaida, a Goldman analyst in Tokyo.

The bank estimates combined writedowns for four of the five largest sogo shosha could total between ¥811 billion ($6.7 billion) and ¥1.6 trillion in the fiscal year ending March 31. “Investors cannot invest in trading companies under the current environment,” Sakaida said.

This could mark the second-straight fiscal year of significant impairment charges for the trading houses. And it may only get worse. Crude-oil prices have tumbled almost 70 percent in the past two years to less than $30 a barrel, and that’s probably going to continue to weigh on earnings, Sakaida said.

Commodity collapse

ALMOST every major raw material is worth less now than two years ago, from iron ore to oil to crops and base metals.

The Bloomberg Commodity Index, a measure of returns from 22 items, has tumbled 40 percent over that period, touching the lowest level since January 1991.

“Another leg down in commodity prices means that new impairment charges are u n avoid able, pa r t ic u l a rly with the assets that have been bought since 2010,” said Polina Diyachkina, an analyst at Macquarie Group Ltd. One potent i a l w r ite down target is the Browse LNG export terminal partly ow ned by Mitsubishi and M it su i , D iy ac h k i n a sa id .

Ot her c a nd id ates inc luding Marubeni ’s stake in the Roy Hill iron-ore mine and Sumitomo’s holding in the Sierra Gorda copper project, the Macquarie analyst said.

New outlooks

T H E t r a d i n g hou s e s a re scheduled to report results for the fiscal third quarter

¥811B-¥1.6T

is possible writedowns for four largest sogo shosha in Japan in the fiscal year ending March 31

this week. Sumitomo, which l a st mont h w it hd re w a n earlier profit forecast for the fiscal year and warned of add itiona l impair ment charges, said it will issue new guidance on February 5.

Officials from Mitsubishi, Mitsui, Marubeni and Sumitomo declined to comment for this stor y. Itochu Cor p., which expects to be the most-profitable of the Japa nese t rad i ng hou ses t h i s y e a r, s a id it h a s n’t c ha nged its net-income forecast for the year.

Mitsubish i w i l l rev iew the value of its commodity assets by the end of the fiscal year, as low prices and a slowing China force the company to reduce its medium- and long-term price out looks, Chief Financia l Officer Shuma Uchino said at the company’s earnings briefing on Tuesday. Mitsubishi maintained its fullyear net-income forecast.

“First, oil and gas projects will book impairment charges, then base metals,” said Kazuhisa Mori, an analyst at JPMorgan Chase & Co. in Tokyo.

To sur vive the commodity market rout, the trading houses—some of which have roots dating back to the 17th century—are shifting their focus away from businesses exposed to the slu mping energ y m a rket.

Some are getting into retail, media and health.

Mitsui, which Goldman says may incur as much as ¥304 billion in writedowns, i s look i ng to e x pa nd it s North A merican chemical ventures that are big buyers of fuel. Mitsubishi, which faces as much as ¥660 billion of writedowns, according to Goldman, said it plans to add more nonresource business after cutting its profit forecast for the year.

Itochu, Japan’s third-largest trading house, is among the most likely to avoid large w r itedow ns, accord ing to Goldman’s Sakaida. The company has limited exposure to resources and exited its only shale investment in June.

For the first time, Itochu is expected to have the highest profit among the trading houses, based on analysts forecasts for t he cur rent fiscal year.

The sogo shosha also have the capital to help weather the commodity slump. The five biggest are sitting on a combined ¥40 trillion ($338 billion), according to company data compiled by Bloomberg.

Three of the five biggest trading houses have maintained or raised dividends in an effort to entice investors as profit slumped and the value of resource assets fell. But the companies may be forced to cut back on the payouts if the writedowns are big enough, according to Jiro Iokibe, an analyst at Daiwa Securities Co. Bloomberg News

IRANIANS use automated teller machines of Bank Melli Iran in downtown Tehran, Iran. Iran said on January 19 it successfully transferred some of the billions of dollars’ worth of frozen overseas assets following the implementation of the nuclear deal with world powers. AP/VAHID SALEMI

$100B in Iran’s assets ‘fully released’ under nuclear deal

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EHRAN, Iran—Iran said on Monday it now has access to more than $100 billion worth of frozen overseas assets following the implementation of a landmark nuclear deal with world powers.

Government Spokesman Mohammad Bagher Nobakht said much of the money had been piling up in banks in China, India, Japan, South Korea and Turkey since international sanctions were tightened in 2012

over Tehran’s nuclear program.

Iran’s semiofficial Isna news agency, meanwhile, quoted central bank official Nasser Hakimi as saying nine Iranian banks are now reconnected to Society for Worldwide Interbank Financial

Telecommunication (SWIFT), a Belgian-based cooperative that handles wire transfers between financial institutions. No foreign banks operate in Iran, and automated teller machines in Iran are not yet linked to the global system. SWIFT had no immediate comment.

T he histor ic ag reement brought about t he l if t ing of i nter n at ion a l sa nc t ion s l a st month after the United Nations certified that Iran has met all its commitments to curbing its nuc lear act iv it ies under l ast summer’s accord. “ These assets [$100 billion] have fully been released and we

can use them,” Nobakht said in comments posted on the web site of state-run Press TV. He said much of the money belongs to Iran’s central bank and National Development Fund. He said Iran will not bring all the money back because it can be spent on purchasing goods. Iran expects an economic breakthrough after the lifting of sanctions, which will allow it to access overseas assets and sell crude oil more freely.

Mohsen Jalalpour, the head of Iran’s Chamber of Commerce, said on state TV on Monday that Iranian businessmen are already able to open letters of credit for transactions in other countries. AP

Hotels expand options to keep guests healthy on the road

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ORT LAUDERDALE, Florida— Running concierges, a hotel mini bar stocked with produce from the local farmers market and a training wall that comes standard in every room.

The hotel industry is moving beyond basement gyms and basic spa menus to accommodate guests’ growing requests to stay healthy while on the road.

The trend has been a mainstay at spas and wellness resorts for years, but now hotels frequented by business travelers and families are showing that life on the go doesn’t have to mean sacrificing spin class or a quinoa superfood bowl.

Boutique and luxury hotels, along with big name brands, including Westin and Wyndham, have vastly expanded fitness programs and dining options in recent years.

The luxury gym Equinox is even opening its own hotel in New York.

The number of hotels with fitness facilities jumped from 63 percent in 2004 to 84 percent in 2014, according to a study by the American Hotel and Lodging Association. And hotels offering in-room exercise equipment has nearly doubled in the past 10 years, from 7 percent to 13 percent, according to the study.

“It’s what the marketplace is demanding,” said Dena Roche, wellness travel expert and editor of The Travel Diet web site. “People are trying to lead a healthier lifestyle in their daily life so when they go on the road they want to keep

doing those things.” At the Even Hotels, every room has a training zone with a yoga mat, exercise ball, foam roller and a mounted fitness wall with resistance bands plus 19 videos and training guides to help you get your sweat on.

Wyndham guests can request a room stocked with an exercise machine (like a stationary bike, elliptical machine or treadmill) and free workout wear, and the W hotel chain partnered with popular yogi Tara Stiles for free in-room yoga videos and a set of tip cards placed around the room to suggest poses to help you relax, wake up or get in the mood.

“It’s pushing from a trend to a tipping point where there’s mass adoption around wellness into every aspect of people’s lives,” Jason Moskal, a vice president at Intercontinental Hotels Group, which owns the Even brand. Even Hotels have three locations, including one in New York City, and are planning to open eight more including one in Miami.

“Everyone has a different aspect of what they’re looking for...the hotel was designed with this idea of wanting wellness on my own terms,” he said.

Rooftop yoga classes are all the rage at hotels across the country including The James Hotel in New York and the Mondrian South Beach. Guests at The Standard in Miami Beach can also enjoy waterfront yoga or stand-up paddle board classes and grab a green

drink from the hotel’s juice bar.

Their spa, which offers a variety of fitness classes for guests (some are for members only) is also a hub for sessions taught by some of the world’s top yogis.

Spinning junkies only have to walk downstairs at the 1 Hotel South Beach for a Soul Cycle class.

Forgot to pack your workout c lot hes? No problem. Tr ump Hotels and Fairmont have partnered with Under Armour and Reebok respect ively to st yle your workout. Westin’s lending program with New Balance had a 16-percent increase in requests in 2015. At the hotel ’s Grand Central location in New York, more than 2,000 guests paid $5 to use a new pair of sneakers and clothes delivered to their room.

Kimpton’s running kit includes a map of the Hudson River running path and preloaded iPod shuff le. Fairmont and several other hotels have running programs including “run concierges” at roughly 200 Westin locations and other options for runners.

The beefed-up offerings come as guests, particularly younger ones, say it’s one of the deciding factors on where they will stay.

Forty-five percent of millennials and 38 percent of Gen Xers said spa and fitness centers were influential in where they booked a room, according to a 2015 survey from travel and hospitality marketing firm MMGY Global.

Several hotel chains are also

targeting the tech-minded fitness buffs. Trump SoHo has a new program that gives guests a free Fitbit Charge to help track whether they meet their daily step goal. Westin is also partnering with Fitbit to deliver personalized video-based exercises that guests can download on their phones or on the Internet along with real-time feedback.

And there’s no need to wonder whether there are gluten-free options at hotel restaurants.

Most have even revamped the notoriously calorie-laden room ser vice menus. The Epiphany Hotel in Palo Alto, California, offers guests a fridge stocked w it h p r o d u c e f r o m a l o c a l farmers market, green juices and homemade power bars for $95. Kimpton hotels overhauled room-service menus, substituting quinoa and oats for white flour.

Westin developed a SuperFoodsRx menu and Trump Hotels also has express menus for health-minded guests where dishes like stir-fried veggies and tofu can be delivered to your room in 15 minutes or less.

“This is definitely a lifestyle choice that is here to stay,” said Ivanka Trump, an executive vice president of The Trump Organization. “Rather than allowing travel to be an impediment to maintaining one’s nutrition and fitness goals, we want to help our guests succeed and achieve in maintaining their commitment to a healthy and balanced lifestyle while on the road.” AP

A8 Wednesday, February 3, 2016

briefs

COSBY DUE IN COURT AS LAWYERS PUSH TO GET CHARGES DROPPED

PHILADELPHIA—Bill Cosby’s lawyers will ask a judge to throw out the only criminal case lodged against the TV star from the dozens of accusations that he molested women.

The defense will argue that Cosby had a deal with a suburban Philadelphia prosecutor in 2005 that he wouldn’t be prosecuted and should testify freely in accuser Andrea Constand’s civil lawsuit.

That testimony, released only last year, prompted Castor’s successors to reopen the case and ultimately charge the 78-year-old Cosby with felony sexual assault. Cosby has not yet entered a plea.

Cosby admitted in the deposition that he had a series of affairs with young models and actresses; had obtained quaaludes to give women before sex; and gave accuser Andrea Constand three pills before a January 2004 encounter at his home. He called it consensual, but she said she was drugged and violated.

In an unusual twist, former Montgomery County District Attorney Bruce L. Castor Jr. is slated to be the defense’s key witness on Tuesday. Castor insists that he forged an oral “non-prosecution” agreement in 2005 with Walter M. Phillips Jr., a Cosby lawyer who died last year. AP

The World BusinessMirror

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

Scholarships, tutoring to save ‘lost generation’ of Syrians

AFGHANISTAN AIR STRIKES DESTROY I.S. RADIO STATION KABUL, Afghanistan—US airstrikes on a remote region of Afghanistan have destroyed a radio station operated by the Islamic State (IS) group, American and Afghan officials said on Tuesday.

Voice of the Caliphate radio operated

by IS near the border with Pakistan was destroyed in US two air strikes, according to a US military official, who spoke on condition of anonymity because he was not authorized to speak to media on the subject.

In an official statement, US Army Col. Mike Lawhorn, spokesman for the USNorth Atlantic Treaty Organization mission in Afghanistan, said: “US forces conducted two counterterrorism air strikes in Achin district” in Nangarhar province late Monday. He had no further details. The radio station was broadcasting illegally across Nangarhar, spreading the group’s extremist message, issuing threats to journalists in the provincial capital Jalalabad and attempting to recruit young men to its cause. AP

U.S. FIRM IN CHINA MEATSCANDAL DISPUTES COURT’S VERDICT

HONG KONG—A US meat supplier is disputing a Chinese court’s verdict that its local subsidiary sold expired chicken and beef to McDonald’s, KFC and other fastfood restaurants in China.

OSI Group of Aurora, Illinois, also said that it’s considering appealing what it called an “unjust verdict” by a Shanghai court on Monday to fine two of its Chinese units and sentence 10 employees to prison in the case.

The scandal was exposed in 2014 by Shanghai’s Dragon TV station, which reported that OSI’s subsidiary repackaged and sold old meat.

The case disrupted operations at chains including Burger King and Starbucks. It also added to the long list of Chinese product-safety scandals over the past decade, including phony or adulterated goods, such as milk powder and drugs that have sickened or killed infants, hospital patients and others. AP

CYPRUS BLOCKS 18 SYRIABOUND FOREIGNERS, 15 SUCCEED NICOSIA, Cyprus—A Cypriot official says island authorities have in the last two years prevented 18 foreign nationals from heading to Syria and possibly joining the Islamic State Group through the ethnically divided island’s breakaway Turkish Cypriot north.

The official, who spoke on condition of anonymity because he’s not authorized to publicly discuss security matters, said another 15 individuals were able to slip through.

He said on Tuesday that all 33 cases have arisen since early 2014 and that the “vast majority” of those people were “European citizens of Islamic origin.”

Of the 18 who were stopped, the official said eight were British, seven French, two Swedes and a woman from the Netherlands. AP

A SYRIAN refugee boy holds up a placard in Arabic during class at a remedial education center run by Relief International in the Zaatari Refugee Camp near Mafraq, Jordan. Writing on sign in Arabic reads: Giraffe.

The UN agency for children, estimates that more than half the refugee children in the region, or more than 700,000, are not in school. Some drop out to work and help struggling families, or because they missed too much school and can’t catch up. Others are told there’s no room in crowded local schools. AP/RAAD ADAYLEH

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ARQA, Jordan—Until recently, Syrian refugee Eyad Zoulghena only had bad options.

The 22-year-old, forced to quit law school when he fled his homeland in 2012, could choose to keep working in a supermarket in Jordan to feed his parents and four siblings, effectively putting his future on hold. He could risk a dangerous sea journey to seek his luck in Europe. Or he could return to war-ravaged Syria.

Now a fi rst opportunity has opened up for Zoulghena—European Union-funded college scholarships for displaced Syrians in Jordan. The pilot program includes 270 such grants now, with a promise of hundreds more in the coming months.

Zoulghena has applied, along with more than 5,000 other Syrians desperate to resume higher education they could otherwise not afford.

If he doesn’t get a scholarship, “you’ll see me next summer in Germany,” said Zoulghena, speaking recently at Jordan’s Zarqa University where Syrians crammed lecture halls to hear more about the EU grants.

As the Syria conflict drags on, such scholarship programs signal an attempt by international donors to shift from mostly emergency humanitarian aid to long-term programs, including education and job creation in Middle Eastern host countries.

Coming up with ways to get hundreds of thousands of uprooted young Syrians back into schools and colleges, and to find employment for their parents will be central issues at Thursday’s annual Syria aid conference, to be held in London.

“The scale of the crisis for children is growing all the time, which

is why there are now such fears that Syria is losing a whole generation of its youth,” Peter Salama, the regional director of United Nations Children’s Fund, said in a statement on Tuesday.

The bulk of Syrian refugees, close to 4.6 million, still live close to home, mainly in Jordan, Lebanon, Turkey and Iraq.

However, hundreds of thousands of Syrians have headed for Europe over the past year, some driven by increasingly tough conditions in regional host countries. Many say concern for their children’s future is pushing them to make the dangerous trip across the Mediterranean.

The often chaotic influx has helped shift European thinking about aid in recent months; Germany’s Economic Cooperation Minister Gerd Mueller said during a Jordan visit last week that it’s “20 times more effective” to improve refugee lives in the region than it is to help them once they get to Europe.

“We want to encourage young people to make a choice here for their future,” said Job Arts, the EU’s head of education programs in Jordan.

“The whole risk of getting lost at sea and in Europe itself, this is a very difficult situation.”

In addition to college scholarships the EU also supports, in cooperation with the British Council, three-month language courses for 2,800 students, Arts said. Other offers include several hundred grants for vocational training and distance learning.

Still, the situation is bleak.

Unicef, the UN agency for chil-

5,000 Syrians desperate to resume higher education applied for EU-funded scholarship in Jordan

dren, estimates that close to 3 million Syrian children are not in school, including 2.1 million inside Syria and more than 700,000 refugee children.

In host countries, some refugee children drop out to work and help struggling families, or because they missed too much school and can’t catch up. Others are told there’s no room in crowded local schools.

One of the stated goals at the London conference is to get all Syrian refugee children back to school by the end of the 2016/17 school year.

In Jordan more than half of about 630,000 Syrian refugees are younger than 18, including 228,000 of school age, according to Unicef.

Of those, some 82,000—or more than one-third—are not in school, the agency said. Trying to fill the gap, Unicef runs dozens of centers across Jordan, where out-of-school children get some schooling, including the basics in English, math and Arabic.

Even for refugees who are enrolled in school, the way forward— getting into college—is filled with obstacles. Most can’t afford to pay Jordanian tuition costs.

In Jordan’s UN-run Zaatari camp for Syrian refugees, set up in 2012, school initially wasn’t a priority for new arrivals. Many thought they would just be staying for a few months or were too traumatized to focus on studies.

This led to low achievement. In

2013, only four out of several dozen high-school seniors passed college matriculation exams, or tawjihi, camp officials said.

Trying to help, Unicef partnered with the aid group Relief International to run remedial classes for students of all ages in Zaatari and the smaller Azraq camp.

On a recent morning, more than a dozen Zaatari fifth graders attended remedial math class. Boys stepped up to the blackboard, where a teacher guided them through adding and subtracting five-digit figures.

Alaa al-Qaisi, a Relief International field coordinator, said he has seen gradual improvements.

Participation in remedial classes for high-school seniors rose from 60 students in 2014 to 150 in 2015, meaning half the 12th graders are now enrolled, said al-Qaisi.

Students are more motivated because the reality of a long exile has sunk in, which means they “start looking for a future, for a good education,” he said.

The first success stories have also helped.

Eight students who passed the college matriculation exams in the previous round—all participants in the remedial program—received college scholarships, now widely seen as the best way out of a dead-end existence in the camp.

Qassem Hariri, 18, one of the eight, studies Arabic at Yarmouk University on a UN scholarship.

Hariri and some of his former school mates said they prefer to stay in Jordan, where they know the language and the culture. Some said they would have left for Europe had it not been for the scholarships.

Amin Nasser, 19, who took the tawjihi exam recently and hopes to study IT, said there is no way he will stay in Zaatari.

“If I don’t get a scholarship and I can’t go to Europe, I will go back to Syria,” he said. AP

PENTAGON TO SEEK 35% MORE FUNDS FOR I.S. FIGHT

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ASHINGTON—The Pentagon will seek a 35-percent increase in funding for the fight against Islamic State (IS) in its next budget, bringing the request for US military efforts against the terrorist group to $7.5 billion, according to a defense official.

The $583 billion in defense spending that President Barack Obama will propose for fiscal 2017 also will include $3.4 billion for European-based security initiatives in response to Russian President Vladimir Putin’s aggressive moves in Ukraine, up from about $789 million this year, according to the official, who spoke on condition of anonymity before the budget is sent to Congress on February 9.

Defense Secretary Ash Carter will outline his priorities for the defense budget, the only one he will get an opportunity to shape before Obama leaves office, in a speech on Tuesday to the Economic Club of Washington.

Working within the constraints of the two-year budget deal reached by Obama and Congress, the proposal will call for $524 billion for the base defense budget and $58.8 billion in warfighting funds that will include the effort against Islamic State and the European initiative.

Carter also plans to say on Tuesday that the Navy’s budget will place increased emphasis on underseas systems, the official said.

Last month Carter ordered the Navy to buy fewer surface ships so it can spend more on advanced technology, such as improved munitions, F-35 jets and upgraded systems for electronic warfare.

While administration officials have said the US-led coalition conducting airstrikes against IS has reduced the territory held by the jihadists, they also have acknowledged difficult struggles ahead in helping local forces recapture the group’s strongholds, Raqaa in Syria and Mosul in Iraq.

The administration also is deciding how aggressively to attack IS contingents that are multiplying in Libya and Afghanistan.

The US campaign of air strikes, trainers and advisers cost the Pentagon $5.8 billion through December 31, or an average of $11.4 million a day. Small contingents of special-operations forces have now been sent into Iraq and Syria with the ability to conduct raids. The proposed funding increase for the IS fight was reported earlier Monday by Reuters.

About $1.5 billion in the warfighting budget request for fiscal 2017, which begins on October 1, would restock munitions dropped during the campaign against Islamic State; 35,000 munitions have been expended since operations began in August 2014.

While the European initiative is aimed at bolstering North Atlantic Treaty Organization capacity in Eastern Europe, Carter spoke in November about how Russian aggression is shaping the US defense budget more broadly.

“We’re investing in the technologies that are most relevant to Russia’s provocations, such as new unmanned systems, a new longrange bomber, and innovation in technologies like the electromagnetic railgun, lasers and new systems for electronic warfare, space and cyberspace,” he said.

The investments also include “a few surprising ones that I really can’t describe here. We’re updating and advancing our operational plans for deterrence and defense given Russia’s changed behavior,” Carter said.

The added European funding would provide for expanded prepositioning of war stocks in the Baltics and the rotation of Army units for exercises, to include an armored brigade, a second official previously told Bloomberg News.

Bloomberg News

news@businessmirror.com.ph

The World BusinessMirror

Editor: Lyn Resurreccion • Wednesday, February 3, 2016

A9

TAIWAN’S HUGE GLASS SHOE IS TRIBUTE TO WOMEN

C

HIAYI, Taiwan—A Taiwanese county has built an enormous glass shoe as a tribute to local women who suffered from a debilitating foot disease.

Completed last month, the transparent 17-meter-tall structure in Chiayi county in the southwest of the island has already attracted large numbers of visitors even before it officially opens in two weeks.

Intended for use as a wedding hall and tourist attraction, the shoe honors women who suffered in the past from arsenic poisoning from well water that caused gangrene, a condition sometimes known as “black feet disease.”

Because feet often had to be amputated, many women faced discrimination and were unable to marry or start families, let alone wear high-heeled shoes.

“Basically, this is built not only to remind us of the time when people suffered from the disease, but also to represent our hope that women can now realize their dreams of walking toward their blissful future in their high-heels,” said the county government head Helen Chang.

Visitor Lin Yi-ling, 56, said the glass shoe was a fitting tribute to the women who’d suffered from the disease. “So when I learned the history behind the high-heel wedding hall, I thought I should come to visit,” Lin said. AP

VISITORS pose in front of a giant glass structure shaped like a high-heel shoe being built as a wedding hall in southern Chiayi, Taiwan. The shoe honors women who suffered from arsenic poisoning from well water that caused gangrene, a condition sometimes known as “black feet disease.” AP/WALLY SANTANA

‘Official beginning’ of Syria peace talks declared

G

ENEVA—Syrian peace talks gained a small measure of momentum on Monday with the UN special envoy formally declaring the start of indirect negotiations, even as the opposition spokesman accused Russia of producing a “new Hitler” in Moscow and supporting another Hitler in Damascus.

Staffan de Mistura, the UN envoy, is now working to keep a wobbly process alive and compel world powers who helped set the stage for the talks to do more to bring about a cease-fire in a five-year Syrian civil war.

De Mistura said the mere arrival of a delegation from the main Syrian opposition group, the High Negotiations Committee (HNC), at the UN offices in Geneva was enough to allow him to declare the talks formally open. He previously met with a government delegation on Friday.

“We are actually listening with attention to the concerns of the HNC, and we are going to discuss tomorrow and listen to the concerns of the government,” de Mistura told reporters after Monday’s meeting.

But HNC spokesman Salem alMislet’s comments highlighted just how far apart the two sides are and how much bad blood de Mistura will have to overcome.

Al-Mislet’s criticism on Russian President Vladimir Putin is of the harshest since Russia began an air campaign in Syria four months ago backing President Bashar al-Assad’s troops. Government forces have taken dozens of towns and villages in recent weeks under cover of Russian air strikes.

“The regime is the one killing the Syrian people,” al-Mislet said when asked by a reporter working for a Russian media outlet about the participation of a representative of the militant Army of Islam group that is in the opposition’s delegation. “The

regime in Russia will produce a new Hitler, and we are suffering from another Hitler in Syria.”

De Mistura laid out the opposition’s concerns and said he planned to take up further talks in a new meeting with government representatives on Tuesday morning, before hosting the HNC again in the afternoon. He said his first goal is simply to keep the talks going, and his overall aim is to help show concrete progress for embattled Syrians.

He also tried to set a new tone, insisting these talks must be “different” from earlier ones that failed in 2014.

De Mistura also threw out a “challenge” to the International Syria Support Group (ISSG)—led by the United States and Russia—that held a key meeting in Vienna in November that helped pave the way for the Geneva talks: He said they had pledged to help support efforts to stop the fighting.

“What I am simply saying is reminding the ISSG members of what they actually indicated: That when the actual talks would start, they themselves would start helping in ensuring that there would be a discussion of an overall cease-fire in the Syrian conflict,” he said.

Also in Geneva, Assistant Secretary for Near Eastern Affairs Anne Patterson and US Special Envoy for Syria Michael Ratney met with Russian Deputy Foreign Minister Gatilov to discuss ways to support the negotiations.

A statement from the State De-

UN Special Envoy for Syria Staffan de Mistura at the meeting with Syrian opposition members of the High Negotiations Committee at the European headquarters of the United Nations in Geneva, Switzerland, on Monday. SALVATORE DI

partment said that Patterson, “underscored the need to work toward a political transition as outlined in UN Security Council Resolution 2254 and urged Russia to use its influence with the Assad regime to push for full humanitarian access to all Syrians in need.”

The statement said the two sides agreed to remain in close contact on Syria as the lead negotiations proceed.

Earlier, the HNC said they had planned to give de Mistura a “roadmap” for implementation of their humanitarian demands on Syria that they say must happen before they formally join indirect peace talks with a government delegation in Geneva.

New aid deliveries

THE UN humanitarian office said the Syrian government approved a request on Monday for new aid deliveries to three besieged towns— Madaya, Foua and Kfarya—where hundreds of civilians are facing severe malnutrition and some have starved to death. Aid deliveries to the three villages had been blocked for months until about three weeks ago when trucks from the UN and other humanitarian organizations were allowed to enter.

The day belonged to the opposition, as de Mistura’s team put off a planned morning meeting on Monday to meet with the opposition— which he had not hosted yet.

HNC member Farah Atassi said the opposition’s top priority was to stop the “unprecedented bom-

60

Barrel bombs falling on Moadamiyeh town every day

bardment by the Syrian regime” of rebel-held suburbs of the capital, Damascus.

The meeting coincided with a sharp spike in violence in Syria, particularly in the rebel-held besieged town of Moadamiyeh southwest of the capital where opposition activists reported dozens of helicopter-dropped barrel bombs in the past few days.

The Geneva talks are aimed at ending a five-year conflict that has killed 250,000 people and displaced millions, leaving vast swaths of the country in ruins and fostering territorial gains of the radical Islamic State (IS) group—which is considered a terrorist group and was not invited.

The talks were slow in starting, largely because of disputes over which opposition groups can take part and opposition demands that the government allow aid into besieged rebel-held areas and halt its bombardments of civilians before the talks start.

The talks are part of a process

NOLFI/KEYSTONE VIA AP

outlined in a UN Security Council resolution last month that envisions an 18-month timetable for a political transition in Syria, including the drafting of a new Constitution and elections. That resolution was an outgrowth of the Vienna meeting in November.

In northwest Syria, advances by government forces and allied militia fighters over the weekend sent more than 3,000 people, many of them ethnic Turkmen, fleeing over the border to Turkey. The Turkish government sees itself as the protector of Syria’s ethnic Turkmen, who are heavily concentrated in the eastern border region.

In Moadamiyeh, near Damascus, activists reported a sustained, relentless campaign of barrel bombs by the Syrian army.

The Syrian Observatory for Human Rights reported an average of around 60 barrel bombs falling on Moadamiyeh every day for the past three days. The town is located about 10 kilometers southwest of Damascus.

Ahmad Moadamani, an opposition media activist in the town, said helicopters dropped 10 barrel bombs in the span of few minutes on the southeast front of the town on Sunday evening.

He said 97 people, among them civilians, militants and civil defense personnel, who arrived after the attack, suffered injuries.

“Most of them suffocated,” he said. He said the pattern of injuries pointed to some sort of gas attack

although he acknowledged they have no way of knowing for sure what it was.

Moadamiyeh was the first major Syrian town to enter into a truce with the Syrian government in late 2014 after enduring a suffocating monthslong siege during which the military pounded the community with artillery and air strikes and refused to allow in food, medicine and fuel.

Moadamani said residents in the town had no faith in the Geneva negotiations.

“We don’t have any trust in the negotiations,” he said. “When people are dying from the hunger or at the barrel of the gun, how are we going to pursue the Geneva negotiations?”

He described the humanitarian situation in the town as “terrible in every sense of the word,” adding that conditions deteriorated after access to the town was choked off by the government last December 26.

“We’ve lost most of our nutritional supplies,” he said.

Moadamani said there were more than 1,500 cases of malnutrition in the town, including 50 severe cases of malnutrition among children.

“Until today, no food or humanitarian or medical aid is allowed into the city, and no humanitarian cases are allowed to leave,” he added.

The opposition delegation said it will meet de Mistura on Monday after receiving reassurances from several countries as well as the UN envoy regarding sieges on rebel-held areas and bombardment of civilians.

De Mistura has decided that these will be “proximity talks,” rather than face-to-face sessions, meaning that he plans to keep the delegations in separate rooms and shuttle between them. He has tamped down expectations by saying he expects the talks to last for six months.

The UN human rights chief, Zeid Raad al-Hussein, meanwhile, told reporters in Geneva he hopes that peace talks “will lead to the end of all these horrific abuses—humanrights abuses and violations of international humanitarian law—that we are all too familiar with.”

Al-Hussein added that the UN has a principled position that “no amnesties should be considered” for those suspected of having committed crimes against humanity or war crimes. AP

A10 Wednesday, February 3, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

On corruption and Transparency International

T

RANSPARENCY International (TI) has just released the results of its 2015 corruption-perception survey showing, among other things, that the Philippines is among the most corrupt of 168 countries in the world. Government spin masters are understandably perturbed. Having spared no time and money in the past to convince us that the country has been cleansed by daang matuwid, what are they going to tell us now?

With a score of “100,” meaning “very clean,” and a score of “0,” meaning “very corrupt,” a rank of “1,” meaning “most clean,” and a rank of “168,” meaning “most corrupt among the 168 surveyed countries,” here are the numbers for the five original members of the Association of Southeast Asian Nations: Singapore: score 85, rank 8; Malaysia: score 50, rank 54; Thailand: score 38, rank 76; Indonesia: score 36, rank 88; and the Philippines: score 35, rank 95.

This essay is neither interested in the findings of the Corruption Perception Index (CPI) nor in the distress of government storytellers; only in reminding one and all that the Transparency International CPI is a perception index. As TI tells us, the index tries to measure bribery, cronyism, kleptocracy, economics of corruption, electoral fraud, legal plunder, nepotism, slush fund, plutocracy and political scandal, but it is not easy to find an objective measure for these areas of concern; hence the CPI only measures perceptions of corruption. TI employs experts to assess the areas of concern. Three assessments of an area must be made for that area to be scored.

In this age of instant gratification, news reporters, television anchor people, newspaper columnists, editorial writers are under pressure to describe not just the events as they factually occurred, but the reporters’ or writers’ own reactions to them, all before the day or week is over. That these reactions are at best conjectural is only to be expected.

As somebody has said, science does not grow by leaps and bounds.

It is in this context that we appreciate TI’s candor in describing its methods lucidly and unambiguously, making clear that its findings are subjective.

Sadly, we cannot say the same thing about our local survey entities, who do not distinguish between responses to perception issues (as to the respondents’ choice of government leader, for instance) and replies to objective issues (as to the respondents’ classification of themselves as poor or not, for instance).

Responses to perception issues may be accepted, since only the respondent “knows” his perception but responses to objective issues may be verified against facts, hence must be disregarded in favor of those facts. Some of our media outlets pay good money to publicize all kinds of responses, without the essential distinction. That’s a pity.

We do not mind government spin masters doing their thing, but we hope that survey entities in this part of the world label their survey results properly, as perception or subjective rather than objective. We also wish that the media do not participate in misleading the public.

A story of hope Susie G. Bugante

All About Social Security

F

OUR years since the AlkanSSSya Program was started in Payatas, a large number of garbage pickers, street sweepers and landfill workers there have seen how their lives have changed by the small amounts that they save daily for their monthly Social Security System (SSS) contributions. They have been able to take out salary loans for immediate financial needs, educational loans for their children’s schooling, maternity benefits for childbirth and funeral grants for untimely deaths.

One story of hope is that of Letecia Constantinopla, a widow struggling to put a daughter through college, but often faced money shortages. A street sweeper and garbage picker at the Payatas landfill in Quezon City, Letecia earns a meager P350 per day, or around P2,100 per week. She supplements her income by running a sari-sari store in their small home and raising a few pigs in the backyard. The P2,000 monthly death-benefit pension that she receives from the SSS also helps them with daily expenses.

“It’s a good thing that my husband had SSS contributions when he was alive,” Letecia recounts. “He was

employed for a time at a soft-drink company, then when he retired, he became a driver for a taxicab company, so he continuously had contributions to the SSS.” Her late husband’s diligence in his SSS membership served Letecia well when he passed away, as she became a recipient of a deathpension benefit. Realizing the importance of the SSS, she signed up, too, as a self-employed member in 2004. Despite her low and irregular income, she managed to contribute at least the minimum amount on the months that she could afford to.

W hen the Payatas A lliance

Through AlkanSSSya, the SSS microsavings scheme for informal-sector workers, Letecia and her Payatas coworkers are able to save small amounts in their own “piggy banks” in the AlkanSSSya unit that was driven on a truck to the Payatas landfill every day. With P12 to P20 savings per day, they are able to accumulate enough to meet their monthly SSS contributions.

Mu l t i - P u r p o s e C o o p e r a t i v e (PAMC), of which she is a member, joined the AlkanSSSya Program in 2012, she was able to resume her contributions with the SSS. Through AlkanSSSya, the SSS microsavings scheme for informalsector workers, Letecia and her Payatas coworkers are able to save small amounts in their own “piggy banks” in the AlkanSSSya unit that was driven on a truck to the Payatas landfill every day. With P12 to P20 savings per day, they are able to accumulate enough to meet their monthly SSS contributions, which PAMC officers count, record and remit to the SSS directly.

When SSS offered the Educational Assistance Loan Program

(Educ-Assist) in 2012, Letecia decided to apply on behalf of her daughter, Jenel, 22, who was a first-year college student then at the Quezon City Polytechnic University (QCPU). Jenel used to take up Entrepreneurship at QCPU but shifted to Industrial Engineering.

She takes night classes, from 5 to 9, so she can work part-time in the mornings.

Letecia’s application was subsequently approved. She was granted an initial P7,100 loan for Jenel’s first semester. The amount helped the bright and diligent college student to continue her studies. Three more loan releases came in November 2013 (in the amount of P7,100), May 2014 (P10,700) and November 2014 (P9,500), with the checks paid directly to the school.

Through the SSS, Letecia and her family have a good reason to be hopeful.

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

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

From steadfast Iowa to contrarian New Hampshire Albert R. Hunt

BLOOMBERG VIEW

S

TRONG showings in the Iowa caucuses by Ted Cruz and Marco Rubio sent them roaring into next week’s Republican presidential primary in New Hampshire with a head of steam at the expense of a deflated Donald Trump.

On the Democratic side, the virtual tie between Hillary Clinton and Bernie Sanders puts intense pressure on Clinton to rebound in New Hampshire and foreshadows a protracted struggle in a race she expected to dominate.

New Hampshire is renowned for its independence and contrarian voting habits, and anything can happen there. Trump and Sanders enjoy big polling leads that they now need to turn into New Hampshire victories.

That will be a test of whether Sanders can retain the enthusiasm of his youthful supporters, and whether Trump fans still consider him a winner after losing the first contest of the 2016 campaign.

Rubio didn’t win Iowa but he was a big a winner there. His third-place finish was closer than polls predicted, and he almost caught Trump. His

challenge now is to persuade mainstream Republican voters to coalesce behind his candidacy to foil the selfstyled outsiders Cruz and Trump. To do that he’ll need a strong showing in New Hampshire against Jeb Bush, John Kasich and Chris Christie— three other mainstream Republicans who are competing vigorously in the Granite State.

New Hampshire comebacks are not unusual. Clinton staged one after Barack Obama beat her in Iowa eight years ago. Ronald Reagan in 1980 and George H.W. Bush in 1988 scored critical New Hampshire wins after losing Iowa.

Of course, Clinton’s New Hampshire victory in 2008 wasn’t enough to propel her to victory over Obama for the nomination. This time she’s counting on strong organizations and well-financed campaigns in later

New Hampshire is renowned for its independence and contrarian voting habits and anything can happen there. Trump and Sanders enjoy big polling leads that they now need to turn into New Hampshire victories. That will be a test of whether Sanders can retain the enthusiasm of his youthful supporters, and whether Trump fans still consider him a winner after losing the first contest of the 2016 campaign.

contests to overcome the unexpected early success of Sanders, a senator from Vermont.

New Hampshire’s outcome is hard to predict because about 40 percent of its voters are independents who are allowed to decide on primary day whether to vote in either party’s contest. A candidate who scores big with these voters can spring a surprise. And surprise has already been the story of this campaign, in which little has played out as expected.

On the Republican side, there are several huge question marks, in addition to the overriding one of Trump’s durability: n Can Rubio, the Florida senator, get a bounce from his strong Iowa finish and thereby crowd out

the other mainstream contenders?

He will be the focus of a lot of fire from rivals over the next few days to prevent this. If he places first or second in New Hampshire, he would become a top contender for the nomination. n Can Kasich, Bush or Christie do well next Tuesday? Each faces virtual elimination otherwise. And each probably has to finish ahead of the other two and Rubio for a plausible pathway to the nomination. n Can Cruz ride his Iowa victory to a respectable showing in New Hampshire, a state he’d been inclined to ignore but now intends to contest? He’d planned to focus instead on South Carolina, where the third GOP contest takes place on February 20 and where conservative voters are more of a force. His campaign manager has predicted that the Texan will prevail there, though polls show Trump ahead.

Another factor may be whether Ben Carson, the retired pediatric neurosurgeon who finished a distant fourth in Iowa, stays in the race; he and Cruz compete for evangelical Christian voters.

New Hampshire is likely to winnow out at least three or four candidates. Iowa effectively took out half a dozen, including Rick Santorum and Mike Huckabee, winners of the last two Republican caucuses there.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Japan’s experiment with rates of less than zero B N S | Bloomberg View

B

Y now, financial markets have absorbed the news that the Bank of Japan (BOJ) has decided to implement negative interest rates. In doing so, the BOJ follows Europe, which sent rates slightly below zero in 2014. Presumably, the new target of -0.1 percent will be achieved through more purchases of assets, such as exchange traded funds and real-estate investment trusts, as well as the usual government bonds.

There are two interesting and important questions here. The first is, “Why is Japan doing this?” The second is, “How low can rates go?”

Let’s talk about the second question first. There’s real uncertainty about how far below zero a central bank can push nominal interest rates using standard techniques like asset purchases. If holding your money in a bank account or government bond causes its value to steadily shrink, you can just withdraw your money and put it in cash, hide it under your pillow or bury it in the backyard. I can almost guarantee you that somewhere in Japan, someone is doing this right now.

One solution is simply to put a tax on paper cash. This is the solution being promoted by University of Michigan economist Miles Kimball, who has been going around the world evangelizing for electronic money for years now.

The University of Chicago’s John Cochrane is skeptical, pointing out other ways that savers could avoid losing money to negative rates. But most of these techniques rely on prepaying bills, which could be penalized more under an electronic money system.

Now it’s true that -0.1 percent isn’t very much below zero, so there won’t be a huge flight to cash just yet. But if the BOJ decides to send rates deeper into negative territory, expect to see something like Kimball’s electronic money system.

Let’s think about why the BOJ made this move right now. One reason might be that since the spring of 2015, Japan’s core inflation rate has tumbled back to about zero. If the BOJ takes its official 2-percent inflation target seriously, it might be implementing negative rates in order to hit the target. But if this were the main motivation, it’s coming a bit late, since inflation collapsed almost a year ago.

A more likely explanation is that the BOJ is trying to cancel out some negative demand shocks. One big such shock is the China slowdown, which is already hurting Japan’s trade in a big way.

A second hit to demand will come if the government decides to raise taxes again. A higher tax on consumption imposed in 2014 raised revenues and put Japan on a sounder long-term fiscal footing, though it probably hurt the economy temporarily. One or two more similar tax hikes might put Japan on the path to long-term fiscal sustainability.

So adopting negative rates might be how the BOJ hopes to cancel out the hit to demand from these future taxes increases.

A third reason for negative interest rates also involves fiscal issues. The lower rates go, the more cheaply the government can refinance its debt. Once all debt is refinanced at negative rates, the government’s interest payments vanish, allowing it to apply more taxes toward its spending commitments to the elderly.

If the government can exercise fiscal restraint and resist the urge to splurge, then negative rates will act as a stealthy form of debt monetization.

All of these challenges might eventually call for very negative rates. So it makes sense for the BOJ to test the waters now, by sending rates a little bit below zero. This will give the central bank an idea of how easy it is to push rates below zero with standard techniques, which will help inform it about when it might need to implement a Kimball-style electronic money system. In part, negative rates are an experiment.

So what are the risks of negative rates?

The obvious one is that at some point Japanese savers—most of which are corporations at this point, since household savings have collapsed—might start moving their money out of the country.

Capital flight would necessitate a rapid reversal of interest rates, and might even spur hyperinflation—a run on the Japanese currency itself.

But this danger is remote. And other dangers—financial instability, for example—are not even certain to exist. So far, low interest rates don’t seem to have done much harm to advanced economies, so it’s doubtful that slightly negative rates will be any different. If rates go very negative, though, things could abruptly change. The world’s central banks are, after all, in uncharted territory here.

A nuclear weapon the US doesn’t need

F

OR a president who famously advocated for a world without nuclear weapons, Barack Obama has done a lot to keep the US nuclear arsenal intact. That’s not a criticism—it was his promise that was naïve, not his policy—but in one respect, his strategy is unnecessarily destabilizing.

The administration’s proposal to spend up to $30 billion to create a new nuclear cruise missile meant to be carried by the aging B-52 bomber makes no sense financially or strategically. Cruise missiles, which are smaller than land-based intercontinental ballistic missiles and fly farther than tactical bombs dropped by planes, are the wild card of the nuclear arsenal: Unlike ICBMs, they are very hard to spot by radar or satellite, and, even if detected, they’re indistinguishable from conventionally armed cruise missiles.

This is a problem because a successful deterrence strategy requires that both sides in a potential nuclear conflict have a pretty good idea of what the other would do. Three years ago, the UK decided not to develop a submarine-based nucleartipped cruise missile because it carries too great a risk of “miscalculation and unintended escalation.”

Even the cold warrior Ronald Reagan subscribed to this theory of deterrence, agreeing with the Soviets in 1987 to eliminate land-based nuclear cruise missiles.

His successor, George H.W. Bush, ordered them taken off US submarines. The only current version is carried by the B-52, which is too slow and easily spotted to enter contested airspace and drop bombs.

In the early days of the Cold War, this weapon may have made sense. But after the B-1 supersonic bomber and B-2 stealth craft came along in the 1980s, the US had planes with the capability to enter hostile airspace with nuclear bombs. (The B-1 no longer carries nuclear

weapons, but the 20 remaining B-2s can.)

Today, with Russia a much-diminished nuclear threat and China little interested in challenging US nuclear superiority, the need to overwhelm either nation’s air defenses is less of a priority.

Meanwhile, lesser potential adversaries such as Iran and North Korea have limited capability to protect their airspace.

And technological advances have made the nuclear submarine fleet vastly more capable of penetrating enemy antimissile defenses.

So why the push for the new cruise weapon? In part, it’s the natural inclination of the military to trade up. There are also concerns over what will happen when the B-2 goes out of service and the B-52s, which have been flying since the 1950s, give up the ghost.

But the Air Force plans to spend $10 billion to extend the B-2’s life for another four decades, and up to another $80 billion for the next-generation Long Range Strike Bombers, which could enter service as soon as 2025 and are designed to penetrate contested airspace. In addition, the current air-launched cruise missile can probably remain usable for 15 years, filling any gap before the new bomber takes off.

Given all this, spending billions on a new nuclear cruise missile isn’t the best or wisest use of resources.

William J. Perry, the former defense secretary who oversaw the development of air-launched cruise missiles, now supports a global ban on nucleartipped cruises.

America’s nuclear arsenal remains a linchpin not only of national defense but also of international security. Obama’s support of hundreds of billions of dollars to modernize the aging nuclear “triad” is justified. But plans to upgrade the nuclear cruise missile would not make the US, or the world, any safer. Bloomberg View

Wednesday, February 3, 2016 A11

Phobias Teddy Locsin Jr.

FREE FIRE

A

PHOBIA is defined as a persistent fear of an object or situation the affected person will go to great lengths to avoid.

If the feared object or situation cannot be avoided entirely, the anxious person will endure it with marked distress, much like the way we have to endure our politicians.

From the Oxford Dictionary’s list of fears or phobias come the following: n Air travel, aerophobia; price of the ticket the same. n Body odor, bromidrosiphobia; also the polite way to tell your boyfriend. Burial alive, taphephobia; stuck on Edsa, taphephobia. Bullets, ballistophobia; elections in Abra, the same. n Childbirth, tacophobia; Mexican food, taco-phobia; afraid to be impregnanted by the ugly guy you married, the same. n Political views of chambers of commerce, worthlesssophobia.

Mentally weak cabinet, cabinetophobia. Constipation, coprostasophobia. Fear of what’s inside the heads of public officials, shitophobia. Coitus, coit-phobia; short rich ugly date, coitophobia. n The annual Sona, diarrheaphobia.

n Dirt, mysophobia; local official, mysophobia; cops, the same.

Darkness, scotophobia; likely outcome of 2016 elections, scotophobia. n Electricity, electrophobia, Meralco bill, electrophobia. Telco service, drapocolophobia. Feces, coprophobia; official excuses, the same. n Fear of failure, kakorfafiaphobia, rare in government because cured by media cover-up.

Fear of flesh, selaphobia; rich old men, the same. n Horses, hippophobia; fat people, ditto. n Slow Internet, wifiophobia.

Imperfection, atelophobia, also rare because when an ugly guy gets elected the fawning media call him sexy. n Giving birth to monsters, BBLophobia. n Narrowness, anginophobia.

Insurance aggregators Atty. Dennis B. Funa

INSURANCE FORUM

A

N insurance aggregator is another channel through which a customer can acquire insurance. It is among the nontraditional distribution channels of insurance. It has been defined as “a web-site portal or search utility to enable a client to gain several quotes via an electronic e-quote form.

“The insurance aggregator concludes agreements with a number of insurers to provide a comparative quote based on predetermined list of specified needs, as disclosed by potential clients.

The insurance aggregator provides the potential client with comparative insurance quotes and the opportunity to discuss a specific quote. The insurance aggregator will transmit the details of the potential client to the insurer, and the insurer will contact the potential client to conclude the policy of insurance.” It is also called a “price comparison web site.” The aggregator is paid a referral fee by the participating insurers. Among the popular Web aggregators are compare.com, confused.com, check24.de (German), comparethemarket.com (UK), moneysupermarket. com (UK), bizcover.com.au (Australia), iselect.com.au, which is exclusively for health insurance in Australia, and comparenow.com, which is exclusively for automobile insurance. In Southeast

MAIL

Please e-mail your letters to the editor to oped@businessmirror. com.ph. Letters chosen for publication in this section are edited for brevity and clarity.

THIS refers to a published news article

by Jovee Marie N. dela Cruz in the December 28, 2015 issue of the BusinessMirror titled “Bill gives IC power to punish HMOs that discriminate against the elderly,” or House Bill 6348 entitled Anti-Healthcare Age Discrimination Act

by Rep. Roman Romulo.

Most health maintenance organizations (HMOs) would likely have only one or two major products in the marketplace—the traditional “individual” or

Asia compareXpress.com was launched in Singapore in 2010. In the Philippines there are ecomparemo.com and ichoose. ph. An aggregator, however, should not be confused with online agencies.

Over the years, we have seen the growth of insurance sales via the Internet. It has been observed, though, that with the need to go after volume sales, insurers offer only “basic policies,” thus, making aggregators inappropriate medium for complex insurance portfolio. Thus, in a 2013 Aggregator Survey conducted by Solutions Provider Singapore, car insurance and travel insurance were found to be most suitable in an aggregator platform with the investment-linked policy and whole life participating policies the least suitable.

The first insurance aggregator in the world, Confused.com, was launched in 2002 in the United Kingdom. It is part of the Admiral Group based in Wales, UK. Its advertising slogan states that it is “the first and longest-running UK

Straight and narrow, da-nomatowidophobia. n Politics, politicophobia; the Philippines, politico-phobia. n Reptiles, batracophobia; promising politicians, the same. n Sex, erotophobia, sex with u g ly d ate, t he s a me. Sme l l ,

ol f ac to phobi a ; M a m a s apa no probe, the same. n Fear of weakness, astenophobia; fear of stupidity and cupidity, weelectedthewrongoneagainnophobia. This is widespread today and amounts to panic. There you go.

insurance comparison site.” It started with car insurance in 2002, followed by home insurance in 2005. Today it offers life insurance, travel, as well as pet insurance. It guarantees that the quote it displays on the screen is the price that the client will pay.

Initially, worldwide, only about 1 percent of motor insurance sales were procured online. This subsequently increased to 10 percent. Today 40 percent of motor insurance sales are placed online. It is projected that this will increase to 75 percent in the coming years.

In a study made by PricewaterhouseCoopers on the German motorinsurance market, it was found that in 2010, 600,000 contracts were concluded through comparison web sites.

This increased to 1.5 million contracts in 2013. Aggregators have revolutionized the distribution of insurance worldwide. This trend has followed the migration of commercial transactions to the Internet just as Expedia and Priceline have transferred the bulk of airline-ticket sales from travel agencies.

It has been observed that with the rise of the aggregators, price competition has become stiffer, leading to decreased profitability. Thus, in the UK, the most advanced aggregator market, it was observed that aggregators have caused the motor-insurance market to become “commoditized.” It was stated that “insurers are no longer competing on brand, marketing, service or other intangibles to the same extent; rather, they are competing almost solely on price

and their position on the aggregators’ screens.” Indeed, Web aggregators are seen as a tool to decrease distribution costs. With the aggregators, there is no need for the traditional insurance agent. Price becomes the primordial criterion. And the time spent by the consumer searching for the appropriate insurer is reduced.

Already, aggregators are predicted to be supplanted by other technologies that will make aggregators redundant. According to Allianz, “Google is effectively an aggregator for most goods or services. If you type “car insurance” into Google, the brands for 13 car-insurance underwriters or distributors will appear on the first page. Many of these insurers provide and/ or advertise the ability to get a “quote in just two minutes” or something similar and/or discounts for purchasing online of up to 20 percent. Thus, in around 10 minutes, a consumer could obtain quotes from up to five motor insurers.”

In Asia online aggregators have established their presence in Hong Kong, Singapore and India. Nowcompare.com was launched in Hong Kong in 2011. It is the world’s first international health-insurance aggregator web site. MyMoney.com.hk was launched in Hong Kong also in 2011 to market life insurance. Embracing the concept, it was announced that the Monetary Authority of Singapore and Banka Negara Malaysia will launch a Web aggregator for life products.

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

HMOs’ rights as corporate citizens “family” plan; and the traditional “corporate” plan (or a variation thereof under an “Administrative Services Only,” or ASO program). Some HMOs do not have individual plans and only cater to corporate accounts. However, others offer a variety of products for different target markets.

Many factors are taken into consideration by HMOs in pricing their products or services, e.g., the prevailing medical costs in the industry; the attained age of an individual applicant or the median age for a corporate account; risk assumptions on existing health profile/s of the individual or group; occupational or environmental hazards of the applicants; industry classification they belong to; past history of program utilization (for renewing accounts); medical or lay underwriting results, if any, marketing and selling expenses, if any; competition in the marketplace; the company’s administrative loading; the many benefits of the program including latest modalities of treatment,

tailor-fitted benefit inclusions per client requests, medical network including specialists, point-of-service privileges, etc.

All these are taken into consideration in order to price correctly the risks involved and the cost of doing business with a particular client.

Admittedly, only a very few HMOs have taken the risk on geriatric care plans for senior citizens as a target HMO market primarily on account of the fact that geriatric care encompasses a more holistic approach to cope with aging and its effects, not to mention the onset of the inevitable failing of mental and physical health—health risk conditions some HMOs may not be organized to assume nor prepared to undertake. Just like any business organization, HMOs package their products and services according to their capacity to assume risks based on their risk-based capitalization, not to mention expertise and technical knowhow in service delivery. To be forced to provide health-care packages to a market

it is not prepared to undertake would be against their rights as corporate citizen of the Philippines, not to mention the possibility of a failed business venture that will not only affect the “seniors” among their planholders, but all their planholders in general, not to mention leaving a lot of unpaid bills with affiliated hospitals and accredited doctors in case of their closure.

We fully agree with you that HMOs should not discriminate against senior citizens especially in the light of increased benefits for our senior citizens—in particular, in the area of health care. But let it be the decision of the HMOs concerned to offer plans for senior citizens and if ever they do, at a price equitable to both parties.

Carlos D. Da Silva Executive Director Association of Health Maintenance Organizations of the Philippines Inc.

2nd Front Page BusinessMirror

A12 Wednesday, February 3, 2016

www.businessmirror.com.ph

Jica to help Mindanao top Metro Manila’s growth

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HE Japan International Cooperation Agency (Jica) and the Bangsamoro Development Agency (BDA) are teaming up to speed up Mindanao’s GDP growth to an average of 7.4 percent annually in the medium term.

This level of economic expansion could eclipse the growth of Metro Manila, which currently accounts for a third of the country’s annual growth. It is also expected to create an additional 550,000 jobs for the region by 2022.

This will be done through the implementation of the proposed Bangsamoro Development Plan (BDP) 2, or the Medium- to LongTerm Development Plan.

“Through the BDP 2, we look forward to continue working closely with the Philippine government, stakeholders and other development partners in realizing balanced and equitable development for all the people of Mindanao,” Jica Chief Representative Noriaki Niwa said.

The BDP 2, one of the components of Jica’s Comprehensive Capacity Development Project for the Bangsamoro, will guide the development of the proposed Bangsamoro area and other regions in Mindanao.

The plan also includes 26 anchor

projects that will be implemented until 2022. These projects were derived from the 16 programs in the BDP 2.

The 16 programs of the BDP 2 are encapsulated in the development areas of broad-based inclusive growth, pump-priming, alternative socio-economy and enhanced resources-management initiatives to ensure inclusive development in Bangsamoro.

The list of projects identified as anchor projects include support for agricultural cooperatives; road rehabilitation and upgrading; ports and airport improvement; Greater Cotabato City urban infrastructure; communal irrigation; economic corridor development; economic zones; and abaca, coco coir and sugar industrial cluster development.

The list also includes agri-based projects (goat farming, mixed field crops); seed production center; halal industry promotion; open market; cold-chain facilities; communitybased forest and coastal manage-

7.4%

Growth rate targeted

by Jica and BDA for Mindanao by 2022

ment; mini hydropower development; and Mindanao river basin integrated watershed and floodmanagement projects, among others.

Jica added that consultations with the Autonomous Region in Muslim Mindanao (ARMM) Regional Government, Mindanao Development Authority and existing government setup of the ARMM would help ensure effective and sustainable implementation of development projects.

Last year former Economic Planning Secretary and National Economic and Development Authority Director General Arsenio M. Balisacan and Asian Development Bank (ADB) Philippines Country Director Richard Bolt said growth and investment in Mindanao are bound to increase because of the Bangsamoro basic law.

Balisacan said Mindanao could maximize its potential as a major economic growth driver for the Philippines. He even said Mindanao can easily grow faster than Metro Manila if this potential is reached.

ADB Philippines Country Specialist Joven Balbosa also explained that, currently, Mindanao con-

tributes about 17 percent of the country’s GDP. However, this is bound to increase if areas in Southern Mindanao will increase their contribution.

Balbosa explained that Northern Mindanao areas, such as Davao and General Santos, already contribute significantly to economic growth due to the tuna, banana and pineapple industries.

However, with the peace agreement, this will ensure that Southern Mindanao will also open up and unleash increased food and mineral

resources. It will also open the gates for the Philippines to take full advantage of the Brunei DarussalamIndonesia-Malaysia-Philippines Eastern Asean Growth Area.

Japan is a strategic development partner of the Philippines. Japan, through Jica, has been supporting the peace and development process in the region since 2002 via assistance to the ARMM Social Fund for Peace and Development. Since then, Japan’s total official development assistance to Mindanao has reached ¥15.1 billion,

or P7.55 billion.

Jica is Japan’s comprehensive development institution, which handles technical cooperation, official development assistance loans and investment, and grant aid, as well as cooperation volunteers and disaster-relief programs.

It is one of the world’s largest bilateral aid agencies, with its volume of cooperation amounting to about $15.6 billion for Japan fiscal year 2014 and a worldwide network of almost 100 overseas offices.

OFWs’ remittances seen tapering off in medium term; BPO to take up slack

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ILIPINO households must prepare for weaker remittance flows as the number of deployed overseas Filipino workers (OFWs) has started to plateau.

In a briefing on Tuesday, Ateneo de Manila University’s EagleWatch Senior Fellow Alvin Ang said remittances are only expected to grow 2.7 percent this year.

Ang said the growth of remittances started tapering off last year and will continue to do so at least in the medium term.

“Remittances is going to weaken a bit because you have lower deployment and the [number of ] professionals are going down. On a per-capita basis, your average remittance will fall because the bulk of the remitters are lower skilled, therefore, the monthly remittance will be lower,” Ang said.

“The bulk of the workers are really service and lower skilled workers. Because of that, we are seeing that remittances will taper off, maybe this year, 2.5-percent growth would be the norm and that will be like for the next few years, very slow growth,” he explained.

Most of the country’s remittances now come from service workers and production workers. The share of remittances from higher-paid professional and technical workers have been on the decline in the past 15 years.

Ang said the sector that can take up the slack is the business-process outsourcing (BPO) sector.

He said in three to five years, dollars earned by the BPO sector will

equal the amount sent by OFWs. The former president of the Philippine Economic Society said the growth can be driven by contact centers, as well as other BPOs and software development. But if growth will increase, particularly in animation and other “creative” BPOs, then the projected growth may be even faster in the coming years.

“We think right now, it will remain double-digit growth in revenue for 2016, and maybe in the next few years, we will revise our forecast if we see that significant numbers are coming from other sectors,”Ang said.

“Probably in the next three years, they will equal OFW remittances because right now, it’s about twothirds of remittances. So if the trend continues, it will equal the total number of dollars received,” he added.

Meanwhile, in terms of full-year growth in 2016, Ang said EagleWatch expects growth to average between 6.3 percent and 6.5 percent.

Ang added that Eagle Watch expects year-on-year GDP growth per quarter to be above 6 percent. The highest expected growth for 2016 will be in the second quarter , at 6.72 percent.

In the first quarter, growth is expected to reach 6.38 percent and in the third quarter, 6.17 percent. In the last quarter of 2016, growth is projected to reach 6.34 percent.

The country’s exchange rate is projected to average 48.50, or around 47 to 50 against the US dollar.

Inflation, Ang said, would likely fall below 2 percent in 2016. He estimates inflation could average 1.6

percent this year.

Challenges

WHILE the presidential election is bound to provide a major boost to GDP this year, there is a lot of uncertainty riding on this political exercise.

Ang said, for one, the current administration will be a tough act to follow considering that many of its achievements, most notable of which is the country’s investment-grade status, have never been done before.

He said the next administration will be hard-pressed to maintain the country’s investment-grade status because any downgrade would become a threat to the Philippine economy. On top of this, the next administration also faces considerable headwinds, particularly from the volatility of global markets and climate change.

Ang added that given that 60 percent of the country’s economic growth is derived from Metro Manila and Calabarzon, the next administration must address the worsening Metro Manila traffic. He said traffic in the megacity of 14 million Filipinos is a threat to the goal of increasing labor productivity in the country. This is just one of the many economic losses attributed to traffic.

In the medium term, Ang said, the next administration also needs to address inclusive growth and how to make the poor benefit from economic growth. It also needs to continue investing in social protection and increase the Philippines’s share in the global supply chain.

PHL to WTO: Compel Thailand to follow tobacco ruling…

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assurances that they will take steps to comply with the WTO ruling and, yet they proceeded to file charges against the importer of Philippine cigarettes.

“The circumstances surrounding the prosecution demonstrate a very close relationship to the circumstances surrounding the measures at issue in the original WTO proceedings. Specifically, the original WTO proceedings and the prosecution involve the same importer into Thailand, the same exporter, the same exporting country, the same product, the same declared customs values for the same brands, and the same circumstances of sa le,” the of f icia l Phi lippine statement read.

In a message posted on its web site, the WTO said “the Philippines reiterated its concerns about outstanding compliance issues in this dispute and called on Thailand to fully comply with the DSB’s [Dispute Settlement Body] recommendations and rulings.”

T he trade dispute erupted after Thai authorities accused Philip Morris Thailand of under-declaring the value of its imports from the Philippines, while the Philippines countered that the higher import duties was a violation of the General Agreement on Tariffs and Trade.

In 2006, the Philippines brought Thailand before the Dispute Settlement Body (DSB) of the WTO and in June 2011, the global trade body ruled in favor of the Philippines.

In its latest statement, the Philippines said the circumstances surrounding the new case are very similar to those cited in the original WTO proceedings.

“To determine what it considers to be the proper customs value, Thailand has used, as the basis for the prosecution, a WTO-inconsistent method that Thailand initially relied upon in the original panel proceedings but then expressly abandoned as the grounds for its valuation decisions,” it said. “The WTO panel ruled that Thailand enjoyed no legitimate grounds to reject the customs values it now subjects to criminal prosecution.”

Lawyer Anthony Abad, one of the Philippine lawyers in the WTO case, said Thailand’s disregard of the WTO’s recommendation on valuation is inconsistent with the ruling. Likewise, prosecution of this case would be in violation of the WTO decision.

“At the WTO, the Philippines challenged Thailand’s claims of under valuation for cigarette imports and the WTO has ruled with finality in favor of the Philippines,” Abad said.

In a statement, PMT Branch Manager Troy Modlin said the company has done nothing wrong and prosecuting the case will undermine Thailand’s desire to revitalize its reputation in the international community as a market-based open economy that is investor friendly.”

“Not only are these charges wholly without merit and in violation of Thailand’s obligations to comply with the WTO Customs Valuation Agreement, they also call into question Thailand’s commitment to fairness, transparency and the rule of law,” Modlin said.

The Philippines, during a January 25 meeting of the WTO’s DSB, called on Thailand to fully comply with the DSB’s recommendations and rulings on Thailand’s customs and tax measures on Philippine – sourced cigarettes.

“The Philippines reiterated its concerns about outstanding compliance issues in this dispute and called on Thailand to fully comply with the DSB’s recommendations and rulings,” a summary of the meeting posted on the WTO web site said.

But Thailand said it had taken all actions necessary to implement the DSB’s recommendations and rulings on the dispute.

Catherine N. Pillas, PNA