BusinessMirror February 18, 2016

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LIFE

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ONE, TOUGH COURSE Female fans denied entry in beach volley

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| THURSDAY, FEBRUARY 18, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph

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AUSANNE, Switzerland—Volleyball’s world governing body said “misunderstandings” in Iran were to blame for female spectators being denied entry to a Beach Volleyball World Tour event.

Allowing women to attend the fiveday competition at Kish Island had been a condition of world body International Volleyball Federation (FIVB) for the Iranian volleyball federation to host the men’s event.

Female fans are traditionally barred from attending male-only sports matches in Iran.

FIVB Spokesman Richard Baker told the Associated Press “there were some misunderstandings with regard to security” during play on Tuesday.

He said women could then watch games from a café overlooking the main court.

“There have been misunderstandings throughout the day, and we have had to seek clarification,” Baker said, adding that the Iranian federation “has the best intentions but there are cultural issues.”

Minky Worden, director of global initiatives for Human Rights Watch (HRW), said the decision by Iranian authorities was “far more serious than a ‘slight understanding.’”

“Brave Iranian women who took the FIVB at its word were turned away at the turnstiles this week,” Worden said. “That is a black eye for the sport of volleyball, and a setback for women’s rights in Iran.

“This sorry episode highlights the shortcomings of the FIVB’s strategy with the Iranian government, and contradicts their claims that all Iranian fans are welcome.”

HRW said the 2012 ban on women attending men’s volleyball matches emerged after the Iranian Ministry of Sports and Youth Affairs extended the 1979 ban on women attending games in soccer stadiums.

The ban came to worldwide attention in 2014 over the detention of an IranianBritish woman, Ghoncheh Ghavami, who tried to attend a men’s volleyball match between Iran and Italy. Ghavami was detained for several hours and then released but was arrested again a few days later and eventually sentenced to a year in prison for “propagating against the ruling system.” She was freed on bail pending an appeal. AP

Nadal, Ferrer in next round

SPAIN’S Rafael Nadal of Spain returns the ball to compatriot Pablo Carreno at the Rio Open tennis tournament. AP

AFTER ALL THESE YEARS, RIVIERA HOLDS ITS OWN AGAINST BEST

ONE, TOUGH COURSE B D F The Associated Press

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OS ANGELES—The Professional Golfers’ Association (PGA) Tour at Riviera is must-see TV for Lanny Wadkins because it’s personal.

The most prominent nickname for Riviera remains “Hogan’s Alley” from when Ben Hogan won three times in two years, capping it off with the 1948 US Open. Wadkins, however, has his own slice of history on the fabled course off Sunset Boulevard.

“I do watch it every year because I have that record,” he said.

It’s a record that speaks to why Riviera, which George Thomas and William Bell designed 90 years ago, commands so much respect.

In an era where players are better and longer—and there are more of them than ever—no one has touched the 20-under 264 that Wadkins shot in 1985. That record has stood the longest of any PGA Tour course on the schedule.

No one has come particularly close in the last 25 years.

Mike Weir shot 267 in 2004. Steve Elkington also had a 267 in the 1995 PGA Championship in August, when the greens were so receptive that two players tied the major championship record of 63.

What is it about Riviera that a record could last that long?

“I can’t put my finger on it,” Weir said. “It seems like it has your attention on every shot to be on the correct side of the fairway, the correct spot beneath the hole.”

James Hahn won in a playoff at Riviera last year at six-under 278. Told the scoring record, he wanted to know who shot it.

“Is he in the Hall of Fame?” he asked. “I think just off of that, he should be.”

Not to worry. Wadkins was inducted in 2009. He won 20 other times on the PGA Tour, including a PGA Championship at Pebble Beach.

Memories of that week remain

clear for Wadkins.

He didn’t have to save par until the par-3 fourth hole in the third round.

He never went for the green on the short par-4 10th. And he ran off four straight birdies around the turn. He won by seven shots and broke the tournament record by six.

Wadkins broke the course record by six shots; Gil Morgan in 1983 and Johnny Miller in 1981 each shot 270.

“It was probably my favorite golf course. I just saw shots around there,” he said. “I felt like I could walk out there and shoot 66. I was that confident playing the place.”

He opened with a 63, followed by rounds of 70 and 67 to seize control, and then set a target for the final round to keep his focus. He wanted to keep a 5 off his card on the last day, and he kept grinding to the end to make it happen.

This isn’t the same Riviera that Wadkins played in 1985, but few courses are. It’s now longer, notably to Nos. 9, 12, 15 and 18. Even so, the extra length has been minimal compared with some other courses.

“It’s just the challenge of the golf course,” Wadkins said. “It has small greens. And I got longer there than most weeks off the tee. I could chase the ball down the kikuyu fairways. If you hit it high, it would hit the grass and stop. I hit a bullet tee shot that turned over and got running. I grew up on small greens, and I worked the ball both ways, which you have to do there.”

The biggest change has been the conditioning. Riviera has become firmer and faster, the strongest defense against scoring.

“It is incredible,” Spieth said of the 31 years that a scoring record hasn’t been matched. “In that amount of time, the course has certainly played softer. It’s certainly played firmer.

You’ve seen all the conditions, with that amount of time, it’s amazing it can hold. I don’t think it will be broken this week. If it is, that’s some incredible playing or they have done something with the pin positions that are different than normal.

“But it’s just so hard to keep the ball below the hole and it’s hard to make putts from above it out here.”

Hahn said Riviera stands the test of time because it can’t be overpowered, even though power hitters like Bubba Watson and Phil Mickelson are recent winners.

“But the green factor, you’ll have a 5-footer and worry about how long your second putt is going to be,” Hahn said. “I don’t think there is any other golf course on tour where you have to think about your second putt.”

Jim Murray of the Los Angeles Times was at Riviera the day Wadkins set the record.

“Listen, if you were too young to see the Chicago Bears beat the Washington Redskins, 73-0, don’t despair. Get a film of Lanny Wadkins beating Riviera on Sunday and the rest of the week,” Murray wrote that day.

“If you had to miss Dempsey knocking out Fred Fulton in 14 seconds, this will recreate that mood.... It wasn’t a match, it was a recital.”

And it’s a record that still stands.

IN this picture made available by Tasnim News Agency, an unidentified Iranian volleyball player defends a ball against his Turkish competitors in a match during Beach Volleyball World Tour in the Iranian Kish island in the Persian Gulf. Female spectators were denied entry on this tournament. AP

SPORTS

Blatter back at Fifa for appeal against eight-year ban B G D

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The Associated Press

URICH—Sepp Blatter was back at International Football Federation (Fifa) headquarters for what could be the last time on Tuesday, challenging his eight-year ban for approving a $2-million payment to Michel Platini in 2011.

Blatter arrived 90 minutes early for the scheduled 9 a.m. (0800 GMT) start of his hearing with the Fifa appeal committee, as punctual as he used to be when arriving for work before being barred from the building last October while under investigation.

Blatter avoided television cameras at the main gate when he left by a rear entrance after a hearing lasting seven hours.

Platini’s session with the four-man appeal panel had lasted an hour longer on Monday when he fought his own eight-year ban imposed by the Fifa ethics committee in December.

They were found guilty of offering or accepting gifts, conflicts of interest and disloyalty to Fifa.

Both men deny wrongdoing, claiming they had a

verbal deal for additional salary former France great Platini would get to work as a Blatter’s adviser from 1999-2002.

Fifa would not comment on when appeal verdicts are expected. Platini has suggested Thursday or Friday, just one week before the February 26 election when Fifa member-federations are scheduled to choose the next president in a five-man contest.

The stunning case threatens to end the careers of the outgoing Fifa president and his one-time protégé, who many expected to succeed him.

Their falls capped a year of turmoil for Fifa, rocked by dual American and Swiss federal investigations of corruption in world soccer, which pressured Blatter to announce his resignation plans last June.

Platini appeared to have decisive support already for his presidential bid by September, when Swiss police arrived at Fifa to question both men.

Fifa ethics judges suspended them days later, pending a full investigation.

Despite his ban, Blatter has said he expects to attend that election meeting in Zurich as a formal ending to his time at Fifa, which he joined in 1975.

“After 40 years, it can’t happen this way,” Blatter, Fifa’s president for more than 17 years, said in December when pledging to appeal. “I’m fighting to restore my rights.”

Blatter and Platini previously said they expect their appeals to Fifa to fail. They have said they would then take their cases to the Court of Arbitration for Sport. Fifa’s appeals body, chaired by Larry Mussenden, a former attorney general of Bermuda, rarely annuls or cuts sanctions by the ethics or disciplinary committees.

Blatter and Platini detailed their legal defense in a series of interviews with media.

Platini said he asked for a salary of 1 million Swiss francs, then around $1 million, when approached in 1998 to work for the newly elected Blatter.

Blatter said there was a contract for 300,000 Swiss francs, the same as its then secretary general in line with Fifa’s salary structure, plus a “gentleman’s agreement” to get the rest later.

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SEPP BLATTER is also appealing his eight-year ban. AP

‘TRULY, TRULY SORRY’ Sports TOBIAS HARRIS is switching uniform this season, from Orlando Magic to Detroit Pistons. AP

| THURSDAY, FEBRUARY 18, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

BLAKE GRIFFIN apologizes and focuses on his return to Los Angles Clippers. MCT

GRIFFIN APOLOGIZES FOR PUNCHING A TEAM STAFFER

Pistons get Harris; Hornets land Lee

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ETROIT—With a playoff spot within reach this year, the Detroit Pistons made a trade they hope will benefit them both now and in the future.

The Pistons acquired forward Tobias Harris from Orlando on Tuesday in a deal that sent guard Brandon Jennings and forward Ersan Ilyasova to the Magic. The 23-year-old Harris gives Detroit another athletic young player, and he’ll be under team control for a while. Harris signed a $64-million, four-year deal to stay with the Magic last summer, when he was a restricted free agent.

“This is a move that can be looked at as a longterm move, as one that will fit with our core group of players, and we’ll be able to keep them together,” Detroit General Manager Jeff Bower said.

Detroit, which is a half-game out of the final playoff spot in the Eastern Conference, gave up its starting power forward in Ilyasova. Jennings was the Pistons’ backup point guard, and they could afford to part with him after making a long-term commitment to starter Reggie Jackson.

Detroit hasn’t made the postseason since 2009. Bower said the Pistons were interested in Harris when he was a free agent, but his restricted status made acquiring him hard.

The 6-foot-9 Harris is averaging 13.7 points per game this season, down from 17.1 in 2014-2015.

His three-point accuracy is down to 31 percent after he shot a career-high 36 percent a season ago.

Harris thanked the city of Orlando, Coach Scott Skiles and his teammates in a post on Instagram.

“Though this is not the easiest time it’s part of life and part of the business of being a professional,” he posted.

The Magic are also hoping to make a push for the playoffs, but they have lost 16 of 20 and are now in 11th place in the East.

GRIZZLIES SEND LEE TO HORNETS

THE Charlotte Hornets acquired veteran swingman Courtney Lee from the Grizzlies in a three-team trade that will help bolster the team’s perimeter shooting and defense after losing Michael KiddGilchrist for the season to a shoulder injury.

The Grizzlies got forward P.J. Hairston from Charlotte and big man Chris Andersen and two second-round draft picks from the Heat, who will get guard Brian Roberts from Charlotte.

The three teams confirmed the trade on Tuesday night.

“He brings a lot of experience,” Hornets General Manager Rich Cho said in a conference call. “He is a vet that is a true pro. He’s a great shooter and plays great defense.”

Hornets Coach Steve Clifford coached Lee before in Orlando.

The Hornets went into the All-Star break in the eighth and final playoff spot in the Eastern Conference, just ahead of the Detroit Pistons, who bolstered their roster on Tuesday by adding Tobias Harris from the Magic. Just seven games after Kidd-Gilchrist made a surprisingly early return from a serious shoulder injury, he suffered another shoulder injury, dealing a difficult blow to Charlotte’s defense.

Lee is in his eighth National Basketball Association season and has established a reputation as a coveted “3 and D guy,” a player who can knock down open three-point shots while also serving as a capable defender on the wing.

“There are not a lot of those 3 and D guys around,” Cho said.

Cho said it’s unclear if Lee will start right away, but he expects him to play a lot of minutes.

The Grizzlies were in the market for help because of a serious injury themselves. Center Marc Gasol broke his right foot not long before the All-Star break, so Memphis is bringing Andersen in from the Heat to try to bolster its frontcourt depth.

Andersen was a valuable role player during the Heat’s run to a championship in 2012-2013 and back to the NBA Finals the following season. But he has played in only seven games this season.

The trade also gives the Grizzlies a chance to look at Hairston, a second-year forward who has shown potential but has also dealt with offthe-court issues. He has started 43 games for the Hornets this season, averaging 6.0 points and 2.7 rebounds in 19.7 minutes per game.

The deal also creates more flexibility going into this summer with Andersen in the final year of his contract.

With Goran Dragic and Beno Udrih already cemented as the top 2 point guards, Roberts doesn’t figure to factor immediately into the Heat’s plans on the court. But the deal helps the Heat move closer to escaping the luxury tax.

The Hornets announced that Kidd-Gilchrist would have surgery on Wednesday on his right shoulder. AP

‘TRULY, TRULY SORRY’

L MIAMI Heat center Chris Bosh will have further exams on his strained right calf when he returns to Miami, trying to determine the extent of the problem. AP

BOSH RESUMES TAKING BLOOD THINNERS B T R The Associated Press

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IAMI—Chris Bosh is back on blood thinners to treat a clot that formed in his leg, the second straight year the Miami Heat forward has dealt with such a situation over the All-Star break.

Bosh began the medication regimen in recent days after the clot was diagnosed and has hopes that he can continue playing at some point this season, a person with knowledge of the situation told the Associated Press (AP) on Tuesday.

Bosh has told the team that he will spend at least a few more days reviewing options and collecting information, said the person who spoke to the AP on condition of anonymity because neither the Heat nor the All-Star forward have yet to publicly reveal details of Bosh’s condition.

“I hate it for him,” said National Association for Stock Car Auto Racing driver Brian Vickers, who has also dealt with

clotting issues that have impacted his career. “I would tell him the same thing again, just don’t give up. Just keep fighting. Find a solution and keep going.”

Athletes in contact sports are typically discouraged from playing while taking blood-thinning medication, because of the additional risk of bleeding and other issues.

A year ago at this time, the clot had traveled from Bosh’s leg to his lung and he had a wave of other problems—including fluid in his lungs. It took about two months to properly diagnose last year’s blood clot problem, with Bosh originally thinking it was a rib or back issue that was causing him such searing pain.

This time, the diagnosis apparently came far quicker.

“I would not say he has to be excluded from sports because he’s had a second [clot] event,” said Robert Myerburg, a cardiologist and a professor of medicine at the University of Miami Miller School of Medicine.

But if Bosh is considering playing while taking a lower dose of blood thinners—which could be one of many options on his

table right now—Myerburg would advise otherwise.

“The problem is that if you lower the dose, you may perhaps lower the bleeding risk but you also lower the efficacy,” Myerburg said. “You’ve giving up some benefit to reduce the risk of bleeding in someone who has already had a pulmonary embolism. I don’t think that’s wise.”

Bosh is Miami’s leading scorer at 19.1 points per game this season. He said over the weekend in Toronto that he was optimistic about playing again this season.

Vickers and Bosh have been in contact over the last year, since both are endorsers for the blood-thinning medication Xarelto and have worked on advertising campaigns for the product with actor Kevin Nealon and golfer Arnold Palmer.

“You really have to follow the advice of their doctors,” Vickers said. “That’s really what the campaign is about. We’re involved with the campaign because we’ve had problems in the past. It can happen again. It can happen to anyone.”

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OS ANGELES—Blake Griffin emerged unexpectedly on Tuesday from a room filled with exercise equipment and weights inside the Los Angeles Clippers’ practice facility.

He walked toward the designated spot to address reporters, appearing uneasy as he shifted his massive frame behind a bank of microphones, his voice quivering almost imperceptibly, until he gained confidence with each of the words he probably never imagined would leave his mouth.

“It’s something I think about every day and wish I could take it back,” Griffin said, “and I’ve told Matias that.”

Griffin was referring to Matias Testi, the team’s assistant equipment manager whom he punched last month at a Toronto restaurant, leaving Griffin with a broken right hand and his longtime friend with a swollen face.

Saying he was “truly, truly sorry,” Griffin addressed the incident with reporters for the first time in a surprise appearance. The Clippers suspended their star power forward for four games and docked his pay for five games for the altercation that was triggered by teasing that went too far for Griffin’s liking. Griffin said he believed his friendship with Testi was salvageable.

“I have talked to Matias tons of times since the incident,” Griffin said. “He actually said it best: ‘This stuff happens and we’re like brothers and we just have to move on.’”

Griffin is expected to be sidelined until sometime next month by his injury and ensuing suspension. He wore a black wrapping over his broken hand on Tuesday.

Clippers Coach Doc Rivers reiterated his previous stance that the team wasn’t trading Griffin and said he was “assuming” Griffin and Testi would rejoin the team on Thursday when it plays its first game after the All-Star break against the San Antonio Spurs at Staples Center. Rivers said he didn’t think the flurry of trade rumors involving Griffin had affected his team.

“I think Blake and his people know what’s going on,” Rivers said. “I think it’s affected ESPN and all the talk shows, hopefully giving them ratings if that’s what they’re looking for.”

That’s not to say there couldn’t be an imminent move involving the Clippers. The team has been in trade discussions with Orlando involving veteran Channing

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

San Miguel’s infrastructure arm worth $20 billion by 2020–Ang B L S. M

Frye, a stretch power forward who has made 38.7 percent of his career three-pointers but has become expendable with Aaron Gordon taking over a starting role with the Magic.

The Clippers have included Lance Stephenson as the centerpiece of their trade discussions with the Magic but are also engaged with other teams in possible deals including the swingman, according to a league executive not authorized to publicly discuss potential moves.

Rivers acknowledged the Clippers were contemplating adding a guard on a 10-day contract after Austin Rivers sustained a broken left hand on February 3, leading to a heavy workload for starting point guard Chris Paul. But Rivers said he didn’t expect any move on that front before the Clippers’ next two games, a stretch that ends on Saturday against the Golden State Warriors.

Austin Rivers is expected to be sidelined for at least two more weeks.

Griffin started his session with reporters with a 55-second address in which he said he had already spoken with his teammates and coaches but wanted to apologize to fans.

“It’s something that I feel awful about, something that I haven’t had to deal with ever before in life and it’s been tough,” Griffin said. “But now that the NBA has done their due diligence and the Clippers and I have my punishment, I’m looking forward to just moving on and moving past this and getting back on the court with our teammates.”

Griffin said he did not believe he needed angermanagement courses. He said the hardest part was having let his teammates and family down, as well as the Clippers’ franchise and fans.

Rivers said he did not believe the incident involving Griffin involved alcohol or revealed any underlying character flaws in a player widely regarded as good-natured.

“Blake’s a good guy,” Rivers said. “Blake doesn’t run around doing things like this. It’s not like he has a history of it.... He can’t get it back, all he can do is live in the present and live for the future and we’ll see how that turns out. I feel good about that.”

Griffin said he had been widely encouraged in conversations with teammates, coaches and other Clippers staffers.

“The theme has been that everybody makes mistakes,” Griffin said. “We have all done things we regret. Everybody has just said, ‘Get back healthy and come back and join us.’”

SPORTS

₧173.63B

San Miguel President Ramon S. Ang said his company will exhaust all means to ensure that its infrastructure business will grow faster than Current its power and oil segments, market capitasuggesting that infrastruclization of the ture will buoy the company whole San Miguel group to its peak. He forecast that in four years’ time, the company’s infrastructure arm will balloon its market valuation to about $20 billion.

“Our infrastructure group will deliver that by the end of the year 2020. Our infrastructure group, valuation-wise, will be bigger than our power and oil businesses combined. Infrastructure’s valuation is usually 15 to 20 times of the cash flow, so the infrastructure business alone will have a market capitalization of $20 billion,” he said.

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INCLUSIVE BUSINESS The Asian Development Bank held its Inclusive Business Forum on Wednesday at the bank’s headquarters in Pasig City. The panelists are (from left) Manila Water Chief Operating Officer Ferdinand de la Cruz, Creating Shared Value Executive Vice President and Executive Director Heekyung (Jo) Min, Sustainable Agriculture President Dr. Dilip Kulkarni and Credit Suisse Vice Chairman for Asia Pacific Lito Camacho. Eriko Ishikawa (right), International Finance Corp. global head for Inclusive Business, moderated the discussions. Related story on B6. ALYSA SALEN

2016 remittances seen at $25B

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BusinessMirror

Thursday, February 18, 2016 Vol. 11 No. 133

HE infrastructure arm of diversified conglomerate San Miguel Corp. will have little to no rest at all in the next four years, as it moves to drive its market capitalization past the trillion-peso mark.

ESCAPE TO EL NIDO

IO DE JANEIRO—After an hourlong delay for rain, Rafael Nadal advanced to the second round at the Rio Open with a 6-1, 6-4 win over fellow Spaniard Pablo Carreno.

Nadal won gold in the Beijing Olympics in 2008, but missed the London Olympics with an injury. Despite being asked about it repeatedly, he’s staying away from talking about the Rio’s Olympics that open in six months.

“The Olympics is a very important event, a very special one, and I’m going to try my best when the Olympics arrive,” Nadal said. “But for now I’m playing the Association of Tennis Professionals (ATP) tournament in Rio. That’s the most important thing for me.”

Also advancing on Tuesday were No. 2 David Ferrer, who beat Nicolas Jarry of Chile, 6-3, 7-6 (3), and No. 5 Dominic Thiem, who had a 6-3, 6-4 win over Pablo Andujar of Spain.

Not much will faze Thiem in this week’s Rio Open.

He beat Nadal—the king of clay—last week in the semifinals in Buenos Aires, and then won the event for his fourth clay-court title.

“Both things gave me a lot of confidence, but after the match with Nadal I wanted to give everything to win the tournament,” the 22-yearold Austrian said. “The win against Rafa would have been worth only half if I had lost the final.”

No. 3 Jo-Wilfried Tsonga had his match rained out against Thiago Monteiro. They will play on Wednesday.

In first-round upsets, Federico Delbonis of Argentina beat sixth-seeded Jack Sock of the United States, 7-5, 6-1, and Alexandr Dolgopolov upset No. 8 seed Thomaz Bellucci, 6-7 (3), 7-5, 6-2.

On the women’s side, top-seeded Teliana Pereira of Brazil lost, 6-3, 7-5, to Petra Martic of Croatia, and second-seeded Johanna Larsson of Sweden defeated Lourdes Dominguez Lino of Spain, 7-5, 6-4.

Pereira’s early loss is a blow for the women’s side of the combined Women’s Tennis Association-ATP event on outdoor clay. She is only ranked No. 43 but gave local organizers a hometown favorite. AP

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INSIDE

Sports

A broader look at today’s business

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HE Bangko Sentra l ng Pilipinas (BSP) said remittances will not contract or significantly slow down despite the problems faced by Middle Eastern countries due mainly to the lingering oil-price slump.

Diwa C. Guinigundo, BSP deputy governor for the Monetary Stability Sector, said cash being sent home by Filipino migrant workers is set to hit “at least a flat growth” for 2016, despite concerns over layoffs in the Middle East.

Still, he said, the BSP will closely

GUINIGUNDO: “Any impact on what we are seeing today, in terms of oil, will still provide us with stable level of remittances.”

monitor the impact of the oil slump on remittances.

“Yes, we have read reports, but we have not had the opportunity to verify those reports. What we know today is that we receive job orders, around 770,000 job orders

in 2015. Only about 44 percent were processed by the Philippine Overseas Employment Administration [POEA],” Guinigundo said.

“If out of the orders, only 44 percent were processed, and that gave us almost $25 billion by the end of 2015, then any reduction from the 770,000 orders will really impact on remittances. But, at the least, it should give us a flat growth of $25 billion for 2016,” he added.

The growth in remittances from Filipino migrant workers recovered in November 2015. Still, data showed that the actual inflow of remittances remained C  A

Beijing downplays reports on China’s missile deployment

We believe this is an attempt by certain Western media to create news stories.”

—Chinese Foreign Minister Wang

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OREIGN Minister Wang Yi on Wednesday sought to downplay reports that China had positioned anti-aircraft missiles on a disputed South China Sea island, accusing the media of hyping the issue and saying more attention should be paid to what he called “public goods and services” provided by China’s development of its maritime claims.

PESO EXCHANGE RATES n US 47.5080

Taiwan’s Ministry of National Defense said in a statement it had “grasped that Communist China had deployed” an unspecified number of missiles on Woody Island in the Paracel group. The Philippines said the development increased regional tensions.

The move would follow China’s building of new islands in the disputed sea by piling sand atop

reefs and then adding airstrips and military installations. They are seen as part of Beijing’s efforts to claim virtually the entire South China Sea and its resources, which has prompted some of its wary neighbors to draw closer to the US. The most dramatic work has taken place in the Spratly Island

BATTLE FOR 700MHZ BAND SHIFTS TO PCC FROM NTC

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HE failure of the government to equitably assign a frequency band that is now deemed to bridge the digital divide globally has led to an anticompetitive environment in the telecommunications industry, officials of the two incumbent telcos in the Philippines said.

San Miguel Corp.’s hold over the entire 700-megahertz (MHz) band, they said, is not consistent with the supposed liberalized environment in the sector.

Philippine Long Distance Telephone Co. (PLDT) Spokesman Ramon R. Isberto said his company is dismayed at how the National Telecommunications Commission (NTC) handled his group’s petition, in 2008, to redistribute portions of the band to existing telcos, given that the said asset has been underutilized since San Miguel’s units took

hold of the band.

“Our position in the matter is consistent with the liberalized environment of the global telco industry.

Assigning the entire 700MHz band to one group is not consistent with the liberalized and competitive environment that the telco industry must have,” he said over the phone.

He added: “Since 2008, we have asked that the 700MHz radio frequency band be reassigned from broadcast TV to mobile telephony, and the said frequency be equitably distributed in a transparent manner among existing operators and new entrants.”

Globe Telecom Inc. also has pending petitions filed before the telco regulator. Its pleas go back as far as 2005.

To date, the government has yet to take action on these petitions.

C  A

C  A

n JAPAN 0.4166 n UK 67.9269 n HK 6.0995 n CHINA 7.2884 n SINGAPORE 33.7919 n AUSTRALIA 33.6984 n EU 52.9239 n SAUDI ARABIA 12.6722

Source: BSP (17 February 2016 )

A2 Thursday, February 18, 2016

BMReports BusinessMirror

news@businessmirror.com.ph

San Miguel’s infrastructure arm 2016 remittances worth $20 billion by 2020–Ang seen at $25B C  A

In peso terms, the amount will reach about P952.02 billion. Currently the market capitalization of the whole group, which includes the food and beverage and power businesses, is at P173.63 billion.

Under San Miguel’s infrastructure arm are businesses engaged in the construction, development and operation of tollways, railway and airport.

It operates the Skyway System

that, as of today, averages 300,000 vehicle traffic daily. The South Luzon Expressway (Slex), meanwhile, sees 300,000 cars per day. The TarlacPangasinan-La Union Expressway, on the other hand, has hit the 19,000 average vehicle-entry mark.

“We hope to finish the Connector Road, which will run from Balintawak to Buendia, so you won’t be suffering from heavy traffic anymore along Edsa. It will have eight exits and entry points all over the city,” Ang said.

The Ninoy Aquino International Airport Expressway, on the other hand, is scheduled for completion by the end of the second quarter.

“We are also preparing for the extension of Slex to Lucena and further to Pagbilao, Quezon,” he added. “We are also building C-6, which is part of our concession. It will run from Laguna to Bocaue, Bulacan.”

On the aviation infrastructure front, San Miguel’s TransAire Development Holdings Corp. is scheduled to finish the modernization of

the Caticlan Airport, one of the key gateways to the island of Boracay.

For rail, the conglomerate just received the go-ahead from the transportation department for the construction of the 23-kilometer Metro Rail Transit Line 7, a train system that will connect Bulacan to Quezon City. It is scheduled for completion by 2019. “The company is not sleeping, we are expanding. We are concentrating a lot of our time to make sure that we can give our stockholders a very stable and bright future,” Ang said.

C  A

weak even when overseas Filipino workers were supposed to be sending more money during that time to fund family expenses for the holiday season.

Latest data from the central bank showed that cash remittances went on to grow by 3.2 percent in November 2015 from the same month in 2014. This rate is a more normalized growth, as compared to the 0.2-percent increase seen in

October 2015. However, the actual dollar value of remittances even declined last November—indicating that the stronger growth was only due to the low base effect set in 2014.

“So any impact on what we are seeing today in terms of oil will still provide us with stable level of remittances,” Guinigundo said.

He also said the BSP will step up efforts on surveillance on the effects of oil prices to the remittances. The BSP is set to release the year-end 2015 remittance data on Friday.

Beijing downplays reports on China’s missile deployment… group, where the militaries of four nations have a presence, although similar work has also gone on at Woody and other Chinese holdings in the Paracels.

“The military will pay close attention to subsequent developments,” the Taiwanese ministry statement said. Relevant parties should “work together to maintain peace and stability in the SCS region to refrain from any unilateral measure that would increase tensions,” the statement added.

US network Fox News also said China had moved surface-to-air missiles to the Paracels, identifying them as two batteries of the HQ-9 system, along with radar targeting arrays. The missiles have a range of

about 200 kilometers (125 miles), making them a threat to all forms of civilian and military aircraft.

Following talks with his Australian counterpart Julie Bishop, Wang said he had become aware of the missile reports just minutes before. “We believe this is an attempt by certain Western media to create news stories,” Wang said.

Echoing claims that the development was largely civilian oriented and benefited the region, Wang pointed to the construction of light houses, weather stations, and rescue and shelter facilities for fishermen.

“All of those are actions that China, as the biggest littoral state in the SCS, has undertaken to provide more public goods and services to

the international community and play its positive role there,” Wang said.

Wang said China’s construction of military infrastructure was “consistent with the right to selfpreservation and self-protection that China is entitled to under international law, so there should be no question about that.”

Bishop reiterated that, like the US, Australia does not take sides on the issue of sovereignty, but urges all sides to maintain peace and stability. Australia welcomes statements

by Chinese President Xi Jinping that “China does not intend to militarize these islands,” she said.

Speaking to reporters in Tokyo, Adm. Harry Harris Jr., the com-

mander of the US Pacific Command, said he was unable to confirm the missile reports, but added the issue “concerns me greatly.”

“This could be an indication, if there are missiles there, it could be an indication of militarization of the SCS in ways that the president of China, that President Xi said he would not do,” Harris said.

Called Yongxingdao by China, Woody island is also claimed by Taiwan and Vietnam. Along with an artificial harbor, it boasts an airport, roads, army posts and other buildings and recent satellite imagery appears to show it is adding a helicopter base likely dedicated to antisubmarine warfare missions.

Taiwan and China claim almost the whole 3.5-million-squarekilometer (1.35-million-squaremile) SCS, including the Paracel chain. Vietnam and the Philippines claim much of the ocean, as well. Brunei Darussalam and Malaysia have smaller claims.

Home to some of the world’s busiest sea lanes, the ocean is also rich in fisheries and may hold oil and natural-gas reserves under the seabed.

China’s move is likely to rattle Vietnam the most because of its proximity to the Paracels and because of a history of maritime tensions with China that spiked in 2014 with a standoff after China moved a massive oil rig into disputed waters.

C  

China regards Australia and the US as unwelcome outside interlopers in regional waters. Wang and Bishop engaged in a testy exchange in December 2013 after Australia criticized China’s unilateral declaration of an air defense zone in the East China Sea. Ahead of Bishop’s visit, President Barack Obama and the leaders of the 10-member Association of Southeast Asian Nations called on Tuesday for the peaceful resolution of the region’s maritime disputes.

Obama told a news conference that disputes must be resolved by legal means, including a case brought by the Philippines challenging China’s sweeping claims over most of the SCS. AP

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Thursday, February 18, 2016 A3

Hotel owners commit to green practices

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B M. S F. A Special to the BM

N association of major hotel owners in the country committed to adopt environmentally sound practices in constructing their establishments, as well as to implement measures that will conserve energy.

The 80-strong Philippine Hotel Ow ners A ssociations Inc. (PHOAI)—formerly the Philippine Hotel Federation Inc.—made its pledge to go green during the recent “Forum on Greening the Hotel Industry.”

The group signed a joint statement of commitment with the Department of Tourism (DOT) to uphold the Philippine Green Building (GB) Code issued by the Department of Public Works and Highways (DPWH) in June

2015. Undersecretary for Tourism Regulation, Coordination and Resource Generation Maria Victoria V. Jasmin signed on behalf of the DOT, while Arthur Lopez signed on behalf of PHOAI. Representatives from the World Bank and the DPWH stood as witnesses during the signing ceremony.

According to a news statement from the DOT, “the GB Code provides a framework of standards that will enhance sound environmental and resource manage-

GB Code

A framework of standards that will enhance sound environmental and resource management of buildings without significant increase in cost

ment, including efficient use of materials, site selection, planning, design, construction, use, occupancy, operation and maintenance of buildings without significant increase in cost. By 2030, the Code estimates to increase energy savings by 3.9 million megawatt hours annually, and reduce greenhouse-gas emissions by 1.87 million metric tons.”

In the same statement, PHOAI President Arthur Lopez promised that hotel owners would put the Philippine GB Code on “top of [their] list.” He also committed that the hotel owners “will improve energy efficiency” of their

establishments and will use only “the best technologies and practices.” The core group of PHOAI, he added, will disseminate all information from the forum to their colleagues.

For his part, Secretary Ramon Jimenez, in a message read by Undersecretary Jasmin during the forum said: “Greening the hotel industry provides that one big window of opportunity to sustain the growth of this rising tiger in Asia. Through our collaboration with the hotel industry, we can offer cleaner air and a greener environment to travelers, and we help hotel owners bring down their electricity cost. That translates to a more competitive environment for the tourism industry.”

In a separate interview, DPWH Secretary Rogelio L. Singson welcomed the DOT and the hotel owners as “partners in greening the tourism industry and making it sustainable.”

According to him, this collaboration will position the hotel industry as a “major contributor in achieving the country’s In-

tended Nationally Determined Contribution of 70 percent reduction in carbon emissions by year 2030.”

Jesse Ang, principal investment officer of the International Finance Corp., the investment unit of the World Bank, called the joint partnership an important initiative, in line with the United Nations Sustainable Development Goals. “Increasing resource use efficiency, greater adoption of clean and environmentally sound technology and industrial practices and reducing waste generation through reduction, recycle and reuse [are the requirements for a] resilient infrastructure [as specified by the UN],” he said.

The standards provided by the new GB Code include the amount of window glazing needed to reduce indoor heat in a building, proper roof insulation determined by the roof color, promotion of natural-air ventilation, use of nontoxic construction materials, among others.

While there are a number of hotels and resorts in the country to

claim to implement GB practices, none have officially been certified as “green buildings.” There are also only a handful of architects in the Philippines who are equipped with the skills necessary to design green buildings.

In 2007, a nonstock, nonprofit organization was organized called the Philippine Green Building Council, which promotes and shares knowledge on green practices. It developed the Berde (Building for Ecologically Responsive Design Excellence) program, described as the local counterpart of the Leadership for Energy and Environmental Design (LEED) green-rating system.

LEED, is an internationally recognized rating system by the United States Green Building Council, for green buildings.

There are close to 20 LEEDcertified buildings in the country under different categories. Among hotels and resorts in the country, the only LEED-recognized are the soon-to-be-opened Shangri-La at The Fort and Limketkai Luxe Hotel in Cagayan de Oro.

DOE will act on Meralco Airbus, Boeing announce $3-billion hike if it gets a complaint airplane deals at Singapore show B L L

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NLIKE the Energy Regulatory Commission (ERC), the Department of Energy (DOE) will not question the February power-rate hike imposed by the Manila Electric Company (Meralco) on its customers.

“When it comes to power rates, it is the mandate of the ERC to determine whether the rate adjustment was necessary,” said Energy Secretary Zenaida Y. Monsada.

“That’s the ERC’s mandate. So, we will not interfere. Not at this point,” Monsada added.

When a complaint is filed before the DOE, however, that is the only time the agency will step in. “If the DOE receives a complaint, we have to act on it and we will coordinate with the ERC. We will help in the investigation if we are requested to help,” said Monsada.

On February 11, the ERC directed Meralco “to submit the details and bases of its computation on generation rate, transmission rate, system loss-lifeline rate and other pass through charges, together with the supporting documents thereof.”

Meralco announced last week that the overall rates for its residential customers this month will go up by P0.42 per kilowatt-hour (kWh) to P8.82 per kWh compared to last month’s overall rates.

For a typical household consuming 200 kWh, the P0.42-per-kWh rate hike translates to an additional amount of around P85 to the overall electricity bill.

“We saw that this is a substantial increase. We are asking them to justify the rate hike,” said ERC Chairman Jose Vicente B. Salazar last week.

Meralco has replied to ERC’s letter, saying the increase in the overall rates was due to higher generation charge, which increased

by P0.25 per kWh to P4.17 per kWh from last month’s rate.

Generation charge is the largest component of an electric bill.

According to Meralco, the Power Supply Agreement of Meralco (PSA) Independent Power Producers (IPPs) provides for a true up of the capacity fees every December of each year to account for the unutilized outage allowance of the power plants for the full calendar year.

“Meralco claims that capacity charge is expected to increase once it normalizes in January 2016 supply month, which is the basis

of the February billing month to the customers,” Salazar said in a text message.

The ERC chief said in an interview, s“the submissions of Meralco will be verified by the commission to determine the reasonableness of the pass through charges.”

Asked if the commission will require Meralco to submit additional data, Salazar said Meralco’s compliance and manifestation “already has supporting documents annexed to it. After evaluation, we will know if the supporting documents are sufficient.”

Meralco also said the rise in generation charge was due to increases in the cost of supply from plants under the PSAs, which registered an increase of P0.76 per kWh. Cost of purchases from PSAs, which were low last month due to adjustments from an annual reconciliation of outage allowances, has normalized this month.

Also contributing to the increase in PSA charges are their lower plant-capacity factors, partly due to the scheduled maintenance shutdown of one unit each of the Calaca and Masinloc Power plants.

Fu r t her, t h is i nc rea se i n the PSA charges more than offset the reduction in charges from the Wholesale Electricity Spot Market (WESM) and IPPs. Charges from the WESM registered a reduction of P2.21 per kWh, largely due to lower system demand.

T he average rate of t he IPPs also slightly went down by P0.01 per kWh. The average price of natural gas for the First Gas plants went down, following the quarterly repricing of Malampaya natural gas. However, the lower fuel costs were offset by reduced dispatch levels of the IPPs. The share of IPPs, PSAs, and WESM to Meralco’s total-power requirements stood at 47.2, 46.7, and 6.1 percent, respectively. Transmission charge, meanwhile, went up

by P0.08 per kWh, due to higher ancillary charges.

Following the increase in generation and transmission charges, taxes also increased by P0.05 per kWh. Other charges, likewise, increased by P0.04 per kWh. Meralco’s distribution, supply and metering charges remain unchanged after a reduction last July.

Payment for the generation charge goes to the power suppliers, while payment for the transmission charge goes to the National Grid Corporation of the Philippines.

A TABLE set for dining sits aboard a Bombardier Inc. Global 6000 business jet at the Singapore Airshow held at the Changi Exhibition Centre in Singapore on Wednesday. Bombardier has seen a huge increase in demand for business planes in Asia, according to Khader Matter, vice president of sales for Middle East, Africa, Asia Pacific and China at Bombardier. BLOOMBERG

A

IR BUS and Boeing announced modest aircraft orders at the Singapore Airshow on Wednesday that indicated a lull in demand for the big manufacturers after the 2014 show hauled in more than $30 billion of deals.

Airbus announced an order for six A350-900s, valued at $1.8 billion at list prices from Philippine Airlines (Related story on B1). Boeing announced a deal for 12 of its 737 jets with a privately owned Chinese carrier Okay Airways, valued at $1.3 billion.

Boeing and Airbus executives at the show have voiced confidence that air travel in Asia will continue to grow strongly.

They said no Asian airlines had deferred orders already placed.

But some industry experts say

the slump in oil prices over the past several months means airlines will keep their older lessfuel efficient aircraft for longer and buy fewer new jets.

“One of the reasons why the order books are full is because the fuel price was high, so there was an incentive to buy the more fuelefficient planes and get rid of the old ones,” said David Stewart, an aviation and aerospace adviser at ICF International.

“But now the fuel price is low, so some airlines will keep their older planes longer and, therefore, not need the new. It’s a quiet time for all of us.”

Airlines are also deterred by the filled order books of both Airbus and Boeing, that could mean a long wait for the delivery of airplanes, Stewart said.

Okay Airways Chairman Wang Shusheng said his company’s order for 737s is not part of a deal Boeing signed with China last year to supply 300 aircraft worth $38 billion.

He said the order will “further modernize our fleet and ensure we operate the most efficient fleet well into the future.”

Both jet manufacturers made their announcements on the second day of the Singapore Airshow, which ends on February 21. More than 1,000 companies are taking part.

The previous show in 2014 generated deals worth $32 billion, and organizers will release this year’s total after the event’s trade period ends on Friday.

Boeing said on Monday that it had no deferrals in Asia and forecasts demand for 3,750 new

airplanes in Southeast Asia valued at $550 billion over the next 20 years. Of the forecast demand, 76 percent will be for single-aisle aircraft such as the Boeing 737 and Airbus A320.

Airbus Chief Executive Fabrice Bregier brushed off fears of a downturn in orders at a news conference on Tuesday.

The company forecasts demand for 12,810 new airplanes in the Asia-Pacific area, valued at $2 trillion over the next 20 years. That represents 40 percent of forecast global demand for about 32,600 airplanes over the same period.

Passenger numbers in Asia are expected by Airbus to grow by 5.6 percent annually, with China forecast to post doubledigit growth. AP

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A4 Thursday, February 18, 2016

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MRT Holdings: DOTC’s failure to act on upgrade proposals ground for graft

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B L S. M

HE failure of the transport department to respond to the proposals of Metro Rail Transit Holdings Inc. (MRTH) to modernize and improve the sorry state of the train line traversing Edsa is tantamount to violation of the Anti-Graft and Corrupt Practices law, the private company’s Spokesman and Legal Counsel David S. Narvasa said on Wednesday.

“The Anti-Graft law says that neglecting or refusing after due demand or request without sufficient justification within a reasonable time by giving undue advantage to other parties, and discriminating against an interested party—in this

case, the proposals submitted by MRT Corp. and its owners, including MRTH—are already a possible ground for graft,” he said.

Together with foreign firms Sumitomo Corp. of Japan and Globalvia Infrastructuras of Spain,

Metro Global Holdings Inc. is proposing to “fix” the ailing system through a $150-million investment that involves the procurement of a total of 96 new train cars and the rehabilitation of the existing 73 coaches, increasing its capacity by fourfold to 1.2 million daily passengers.

Under the proposal, a single point of responsibility will be implemented, meaning the rehabilitation and the maintenance of the line will be handled by a single company.

This specific proposal was sent in 2012, but offers to develop the line were already in place even before President Aquino took office in 2010.

“They cannot give as an excuse that MRT Holdings has no personality and, therefore, does not deserve their reply,” Narvasa said. “Their inaction is against the law.”

Last December Rolf Bieri, the authorized representative of German rail technology firm Schunk Bahn-und Industrietechnik GmbH, slammed the transport department

Their inaction is against the law.”

—Narvasa

for its inaction with regard to the unsolicited proposals to rehabilitate the MRT. This forced the company to bring the issue to President Aquino, himself, asking the Chief Executive to consider the current state of the train line that ferries almost 600,000 passengers per day.

The P4.64-billion proposal, submitted in February with Filipino partner Comm Builders and Technology Phils. Corp., calls for the complete overhaul of the 73 light-rail vehicles of the MRT, the replacement of the rails, the upgrading of the line’s ancillary system, the upgrade of the track circuit and signaling systems, the modernization of the conveyance system and a three-year maintenance contract.

Should the government acted on the group’s proposal, it could have done something to alleviate the woes of the railway system by now.

Instead, Transportation Secretary Joseph Emilio A. Abaya resorted to hold public tenders for a P4.3-billion MRT rehabilitation and maintenance contract.

The failure to get a suitable provider—brought about by the sorry state of the train system—led the government to take the emergency procurement scheme.

The P3.8-billion maintenance contract was awarded to to the joint venture of Busan Transportation Corp., Edison Development & Construction, Tramat Mercantile Inc., TMI Corp. Inc. and Castan Corp. last December.

Separately, Metro Pacific is proposing to shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity rental payments.

The group of Pangilinan, which

earlier entered into a partnership agreement with the corporate owner of the MRT, intends to spend $524 million to overhaul the line.

The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.

It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal.

According to the amended build-operate-transfer law, the government has to inform the proponent whether it accepts or rejects an unsolicited proposal within 120 days.

Today the rail line’s average daily ridership is already over 560,000, and its highest single-day passenger count is 620,000.

ACB: Most Asean countries ‘on track’ of achieving Aichi biodiversity goals

The Philippines, Vietnam and Indonesia got poor scores in addressing pollution because of their polluted rivers and inland waters. This is understandable for countries with big cities like Manila and Jakarta because of pollution caused by industrialization.”—Vergara B J L. M

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ANGKOK, Thailand—Most of the member-countries of the Association of Southeast Asian Nations (Asean) are “on track” in achieving the Aichi Biodiversity Targets, officials of the Asean Centre for Biodiversity (ACB) said.

The Aichi Biodiversity Targets measure the compliance of Asean membercountries of the Strategic Plan for Biodiversity 2011 to 2020 adopted during the 10th meeting of the Conference of Parties (COP), held from October 18 to 29, 2010, in Nagoya, Aichi Prefecture, Japan.

The plan provides an overarching framework on biodiversity, not only for the biodiversity-related conventions, but for the entire United Nations system, and all other partners engaged in biodiversity management and policy development.

Lawyer Roberto Oliva, executive director of the ACB, said that many Asean membercountries have rated themselves fairly as far as the status of the Aichi Biodiversity Targets are concerned.

Interviewed during the soft launch of the Asean Biodiversity Outlook-2 (ABO-2) on Tuesday, Oliva said that many countries are indeed exerting best effort to implement the Strategic Plan for Biodiversity 2011 to 2020. However, Oliva added that much needs to be done to address the problem that leads to rapid rate of biodiversity loss in Southeast Asia.

ABO-2 is the follow-up to the first edition launched in 2010. It aims to show how Asean has fared in conserving biodiversity in the context of implementing the Strategic Plan for Biodiversity 2011 to 2020 as guided by the Aichi Biodiversity Targets.

According to ACB, the results of ABO-2 will provide Asean member-countries with the opportunity to highlight common issues;

lessons learned and information needs to improve their performance in conserving their respective country’s rich biodiversity.

Giving a glimpse of ABO-2, which will be launched and presented during the COP 13 meeting to be held in Mexico at the end of the year, Shiela Vergara, director of Biodiversity Information Management Unit of the ACB, said that based on initial reports submitted

by Asean member-countries to the secretariat of the Convention on Biological Diversity (CBD), most Asean member-countries scored high in achieving Target 11.

Target 11 states that by 2020, at least 17 percent of terrestrial and inland water areas, and 10 percent of coastal and marine areas, especially areas of particular importance for biodiversity and ecosystem services, are conserved through effectively and equitably managed, ecologically representative and well-connected systems of protected areas (PAs) and other effective area-based conservation measures, and integrated into the wider landscape and seascape.

“Establishing PAs, she said, is one part of the target. The other part of the target is not just to establish PAs, but also to make sure that these PAs are managed. That these PAs are managed as a network so that one will benefit the other,” Vergara said.

She said, however, that Asean did not fare well on the target addressing pollution, or Target 8. Target 8 states that by 2020, pollution, including those coming from excess nutrients, has been brought to levels that are not detrimental to ecosystem function and biodiversity.

The Philippines, Vietnam and Indonesia, Vergara said, got poor scores in addressing pollution because of their polluted rivers and inland waters. This is understandable for countries with big cities like Manila and Jakarta because of pollution caused by industrialization, she added.

ONE BILLION RISING

Students and nuns of the Catholic-run Saint Scholastica’s College flash the No. 1 sign as they dance in their campus for the global movement, known as “One Billion Rising,” to call for an end to violence against women and children on Monday in Manila. The movement, which was started five years ago, aims to draw the attention of 1 billion women all over the world to rise up to the challenges of gender inequality and gender empowerment. AP

Battle for 700-MHz band shifts to PCC from NTC. . .    Globe General Legal Counsel Froilan M. Castelo said his company will exert all effort toward achieving an equitable distribution of the 700-MHz spectrum, underscoring the significance of the frequency in elevating the state of the Philippine Internet.

“We hold the position that the 700-MHz frequency should be reallocated for the benefit of the country and the industry. We have been calling on the NTC to do this since 2005 and we will continue to exert all effort to get that reallocated. In an era of very scarce spectrum resource globally, we should be utilizing all our resources in delivering high-speed data to our customers,” he said.

Aside from Thailand, the Philippines is the only nation in Asia Pacific with major issues preventing their allocation of the 700-MHz band to mobile broadband technologies, data from international telecommunications association GSMA showed.

Spectrum is the real estate on which telecommunication operators develop their respective network to deliver services to customers. The amount of spectrum assigned to a telco impacts the cost to build capacity, overall network performance, ability to offer new multimedia services and general customer experience of wireless services.

Utilizing the 700 MHz would allow the de-

ployment of a high-capacity LTE-based wireless and fixed broadband network to deliver higher data rate and LTE wireless-broadband service. With the use of the 700-MHz frequency, broadband prices can go down, further benefiting consumers.

“We continue to call on the government and our regulators, in particular, to ensure the equitable distribution of that spectrum throughout the industry,” Castelo said.

These calls came at the heels of Philippine Competition Commission (PCC) Chairman Arsenio M. Balisacan’s statement that one of the sectors his office will focus on is the telecommunications industry.

The PCC is tasked to ensure fair competition in the business sector, and preventing anticompetitive agreements, mergers or acquisitions that substantially restrict competition, and foster abuse of dominant position.

With this, Castelo hopes that the newly minted agency will conduct a review as to how San Miguel was able to obtain and maintain control of the scarce frequency in spite of calls for a public bidding.

He said the need for the agency to act on the frequency issue is made more critical by the glaring lack of NTC action, despite moves by governments all over the world to reassign the use of 700-MHz frequency band from

broadcast TV to mobile telephony.

The European Commission has, in fact, finalized a proposal just this February, to coordinate the use of the 700-MHz band across the European Union (EU) to make it available to mobile operators.

In particular, the EU hopes the spectrum will eventually help foster next-generation 5G mobile via “special services” able to do demanding things like controlling autonomous cars, connecting health-monitoring equipment and other technologies.

“Governments have taken this action to help bridge the ‘digital divide’, as the 700MHz band is well suited to mobile data technologies, and will make it easier and faster to deliver Internet services, even in rural areas,” Isberto said.

He added: “This lack of action has become more glaring in recent years because governments all over the world have been reassigning the use of 700-MHz frequency band from broadcast TV to mobile telephony.”

San Miguel currently holds the right to operate all of the frequencies under the 700-MHz band. It plans to launch a third core player in the duopolistic telecommunications market in the Philippines through a joint venture with Telstra Corp. of Australia. Lorenz S. Marasigan

Asean

BusinessMirror Editor: Max V. de Leon • Thursday, February 18, 2016 A5

www.businessmirror.com.ph

Jointly create the environment in which to live and do business

Obama, Asean leaders seek resolution to maritime rows

Asean-EU Perspective

HENRY J. SCHUMACHER

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UBLIC-PRIVATE partnership, or PPP, has basically been understood as a joint venture between the private sector and the government to build infrastructure. Unfortunately, little effort has been undertaken by both the government and the private sector to see PPP as an avenue to discuss issues constructively and with the intention to jointly find and implement solutions.

The Asean region, in general, and the Philippines, in particular, are faced with quite a number of challenges. Important decisions are to be made regarding infrastructure development, financing of national and local governments, preparation for the digital revolution, focusing on inclusive growth, attracting foreign investment, addressing un- and underemployment and finding peace.

Although the impact will vary, nobody can walk away from these challenges. Governments (national and local), civil society and businesses will have to address these challenges jointly and will have to contribute their shares to finding solutions. Important is that all players understand that they have to carry part of the responsibility. Everybody has to contribute.

Businesses have to be willing to provide expertise, possibly funding, provided the government understands that its main task is to create an enabling environment. The Government will also have to accept that its track record in implementing projects is limited, and that, in partnership with the private sector, success rates will improve substantially.

PPP, in my view, will work if both sides will meet without preconditions, willing to listen, willing to learn, willing to provide ideas and possible solutions, willing to agree on targets and willing to implement them jointly.

Important factors are openness to new ideas, creativity in the search for joint solutions and the willingness to work together as equal partners.

European Chamber of Commerce of the Philippines has suggested the PPPs already for various sectors: n Developing infrastructure. n Finding solutions for available, affordable and quality electricity/ making use of creative models for energy efficiency and conservation. n Implementing health-care solutions on the national and local level. n Making water resource management (from water distribution to water treatment and conservation) a national undertaking, getting the message across that water is a finite resource. n Supporting the government in K to 12 implementation by organizing constructive internships in companies, with the aim to move senior high-school students into employment (even with the apprenticeship bill stuck in the Senate). n Developing strategies for agri-food supply and value chains which will take advantage of GSP+. n Addressing traffic and port congestion.

Initial success is already visible: n The health-care industry is meeting with Department of Health/ Food and Drug Administration on a monthly meeting. n Cabinet Secretary Jose Rene Almendras has created a regular dialogue between various traffic and port stakeholders; the implementation of Terminal Appointment Booking System (TABS) and the willingness of Metro Manila mayors not to impose truck bans on TABS-registered trucks are big steps forward. n Jointly with the Department of Education we are developing best practices for the K to 12/dual-education/apprenticeship programs that provide senior high-school students with the much-needed exposure to the work environment and to address the skills gap.

We are encouraged to by these initial successes and are hopeful that we will find PPPs for the other areas soon also.

PRESIDENT Barack Obama (center) waves as he poses for a group photo with leaders of Asean, including (from left) Asean Secretary-General Le Luong Minh, Bruneian Sultan Hassanal Bolkiah, Cambodian Prime Minister Hun Sen, Indonesian President Joko Widodo, Malaysian Prime Minister Najib Razak, Laotian President Choummaly Sayasone, Philippine President Aquino, Singaporean Prime Minister Lee Hsien Loong, Thai Prime Minister Prayuth Chan-ocha, Vietnamese Prime Minister Nguyen Tan Dung and Myanmar Vice President Nyan Tun at the Annenberg Retreat at Sunnylands in Rancho Mirage, California on Tuesday. AP

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RESIDENT Barack Obama and the leaders of Southeast Asia called on Tuesday for peaceful resolution of the region’s maritime disputes as they concluded a summit in California.

Obama told a news conference that disputes must be resolved by legal means, including a case brought by the Philippines challenging China’s sweeping claims over most of the South China Sea (SCS).

China has refused to take part in the proceedings, but Obama said parties to the UN law of the seas are obligated to respect the ruling, expected later this year.

Obama has been hosting 10 Asean leaders in the US for the first time.

That sends a subtle message to China that the US remains an important force in the region.

But the leaders’ joint statement after two days of talks avoided direct reference to China, reflecting the careful path that Asean members tread in their diplomacy with the world powers.

Any disputes between claimants must be resolved peacefully through legal means.”

—Obama “Any disputes between claimants must be resolved peacefully through legal means such as the upcoming arbitration ruling under the UN Convention of the Law of the Seas, which the parties are obligated to respect and abide by,” Obama said.

The Philippines brought its case

in 2013 after Beijing refused to withdraw its ships from a disputed shoal under a US-brokered deal. Despite China’s refusal to participate, the arbitral tribunal based in The Hague has agreed to hear the case.

China says it has a historical right to virtually all of the SCS and has built seven artificial islands, some with airstrips, to assert its sovereignty. Taiwan and Asean members Brunei Darussalam, Malaysia, Vietnam and the Philippines also claim land features in these potentially resource-rich waters, an important thoroughfare for international shipping.

Though not a claimant, the US has spoken out against China’s conduct and has angered Beijing by sailing US Navy ships near some of the artificial islands to demonstrate freedom to sail there despite China’s territorial claims.

Obama said the US will continue to fly, sail and operate wherever international law allows, and it will support the right of other countries to do the same.

The US has long argued for the maritime-rights issue to be resolved peacefully and is looking for Asean to take a unified stance on the issue.

The diverse group of countries

Singapore turns colonial airstrip into hub for jet-engine makers

A

SIA’S ascent toward the top of the world’s aerospace market is being powered by a former colonial airbase in northern Singapore.

Once known for making mosquito coils and hair wigs, Singapore is now a hub for manufacturing the massive engines propelling Airbus Group SE’s superjumbo A380 and Boeing Co.’s Dreamliner. Those efforts are centered across the water from Malaysia at the Seletar Aerospace Park, a former mangrove swamp cleared for a British landing strip.

The area, about the size of New York’s Central Park, has spurred a $6-billion industry that is growing by at least 10 percent a year, according to government data. Pratt & Whitney is boosting spending on a local fan-blade factory by a third, and Rolls-Royce Holdings Plc. is diversifying its S$700million ($500-million) Seletar complex with repair and research facilities.

“Singapore is a hub,” Danny di Perna, senior vice president of engineering and operations at Pratt & Whitney, said at this week’s Singapore Airshow, where companies are meeting to plan for the industry’s tilt toward Asia.

“These are very critical components

S$8.7B

The value of Singapore’s aerospace industry manned by some 19,800 workers, according to latest available data

we are making here. It’s not just anybody that can make them.”

The push comes as surging travel in Asia fuels demand for $2.2 trillion worth of airplanes during the next 20 years, according to estimates by Boeing. Singapore, already a regional powerhouse in aircraft maintenance, is home to Rolls-Royce’s most modern factory outside the UK and the only engine-fan facility for Pratt & Whitney outside the US.

Engine backlog

“WE don’t have the base for making airplanes so the next- most important

thing is the engine and everything else in the plane,” said Song Seng Wun, an economist at CIMB Private Banking in Singapore.

Pratt & Whitney, the engine-making unit of United Technologies Corp., said on Monday it planned to spend as much as another $40 million after a $110-million investment on the factory for fan blades and turbine disks.

The company has a backlog of more than 7,000 engine orders, and production will ramp up during the next 18 months, di Perna said.

A skilled, educated work force and support from the national Economic Development Board (EDB) prompted the engine maker to choose Singapore, di Perna said. Singapore already is home to the world’s two biggest manufacturers of oil rigs, and the government has encouraged companies to move up the value chain in sectors such as pharmaceuticals.

“They have a very good strategy to create high-tech, advanced capability in the island,” di Perna said.

Indonesia challenge

SINGAPORE’S aerospace industry generated S$8.7 billion and employed 19,800 workers in 2013,

according to the latest EDB data. The industry has expanded at an average of 10 percent in the past two decades, according to the economic agency. By comparison, the nation’s GDP has expanded by an annual average of 5.3 percent in the two decades through 2015, according to data compiled by Bloomberg.

There have been some recent challenges for Singapore. The maintenance arm of Lion Air, a key customer for Airbus and Boeing in Southeast Asia, is spending $250 million to build a maintenance facility at Batam, an Indonesian island just a short ferry ride from Singapore. It will have the capacity to service four Boeing 747s or 12 single-aisle planes.

Rolls-Royce chose to open its customer-service center at the Seletar park because about 20 percent of its large civil-aircraft engines are in use in Asia, the company said.

“The government is extremely focused on a chosen endeavor and is nimble enough to embrace the ripple effect,” the London-based company said in an e-mail. The city-state is rated by the World Bank as the globe’s easiest place to do business.

Bloomberg News

includes governments that lean toward either Washington or Beijing. Only four Asean members are SCS claimants, leading to sometimes conflicting views on how to handle long-simmering rifts.

The US-Asean joint statement did not refer directly to the arbitration case brought by the Philippines, but it does urge “full respect for legal and diplomatic processes” in resolving disputes.

Singaporean Prime Minister Lee Hsien Loong told a working dinner of the leaders on Monday night that China’s role in the region is expected to grow. Loong said China’s larger presence will likely lead to occasional frictions, uncertainties and anxieties, including on the SCS, but these issues must be managed peacefully to preserve regional stability and security, the Singapore-based Channel News Asia reported.

The summit is the latest effort by Obama to deepen US ties with the fast-growing economies of Southeast Asia—a commitment he described as “strong and enduring.” Obama plans to visit Vietnam in May, and then in the fall, become the first US president to visit Lao PDR. Human-rights activists have criticized Obama for hosting Southeast Asian leaders who have not come to power in free and fair elections.

Obama said the US would continue to stand with those in the region looking to advance rule of law and good governance. He encouraged the return of civilian rule in Thailand, a long-standing US ally, whose current prime minister came to power in a May 2014 military coup.

The leaders concluded the summit by posing for the traditional family photo on the plush lawn outside a historic residence at Sunnylands, the storied California desert estate where the talks were held. Sunnylands is also where Obama had his first formal meeting with China’s current president, Xi Jinping, in 2013.

The leaders also discussed economic cooperation. Asean members Brunei, Malaysia, Singapore and Vietnam are all members of the Trans-Pacific Partnership, a free trade pact that is the main plank of Obama’s outreach to Asia. AP

TheBroa

Business

A6 Thursday, February 18, 2016

ACCESS TO REMITTAN

AS BIGGER HEAD F

B B C

OR several years now, Filipino migrant workers help keep the economy afloat in crisis after crisis by sending home what they earn abroad, boosting the flow of foreign exchange, strengthening the country’s external position and injecting billions in liquidity that push consumption activities into overdrive.

In recent months, however, cash remittances from Filipino migrant workers have shown signs of slowing.

In the aftermath of the 20072008 global financial crisis, the volume of cash sent home by Filipino migrants steadied over five years at 6.9 percent, except for a downturn in 2009 following the global financial meltdown.

Towards the end of 2014, remittance growth alternately dipped and surged, at one time surprising markets with a 1.8 percent expansion in November that year. That was the slowest cash remittance growth since January 2009. Remittance growth averaged 5.9 percent in 2014.

2015, however, proved more problematic, w ith severa l months posting growth lower than 1 percent. Also in August that year, the volume of cash sent home by Filipino migrant workers contracted for the first time in 12 years by 0.6 percent.

For the first 11 months of 2015, remittances grew by 3.6 percent The remittances growth path traced in 2015 generated apprehension in the $285 billion economy quite starkly reliant on remittances, particularly as other global economic worries started to pop up.

“The Philippines is heavily dependent on consumption. In fact we’re 70 percent driven by household spending. The purchasing power delivered by the $25 billion (in remittances) annually is an integral part of our economy and one of the major contributors to our recent string of growth. On top of the consumption angle, the remittances also provide a stable source of foreign currency, helping us build our store of reserves at the BSP [Bangko Sentral ng Pilipinas],” Bank of the Philippine Islands (BPI) research officer Nicholas Antonio Mapa told the BusinessMirror.

“In the past few years we’ve had our cake and ate it too. We have built our reserves, lowered our borrowing costs and pretty much saw just what a consumption economy on steroids could do: 7 percent growth,” he added. Latest data from the BSP show the country’s gross international reserves (GIR) hit $80.16 billion as of January this year no matter the steady depletion of the foreign currency reserves of other jurisdictions in the region for the period.

Manila’s GIR is enough to cover 10.2 months worth of imports of goods and payments of services and income. It is also equivalent to

5.5 times the country’s short-term external debt based on original maturity and four times based on residual maturity.

Remittances also account for 8.7 percent of the country’s local output measured as the gross domestic product (GDP) as of September 2015.

“A slowdown in remittances will inevitably have a direct effect on our growth engine as it provides fuel on two fronts. If remittances slowdown with no countervailing factors, our economic growth engine, if it does not evolve, will slow down,” Mapa said.

In earlier statements, Deputy Bangko Sentral ng Pilipinas governor for the monetary stability sector Diwa C. Guinigundo said the remittance sector has begun to mature and this helps explain its apparent deceleration in recent months.

“Overseas Filipino remittance growth is projected at four percent in 2016 and seen to taper in the medium to long term but should still be positive,” Guinigundo told the BusinessMirror.

Economist and Ateneo Eagle Watch senior fellow Alvin Ang corroborated the view the sector has reached optimum point. He told the BusinesMirror the remittances were to expand only 2.7 percent and plateau over the next two years.

Aside from having apparently hit optimum, the deceleration in remittances may not only be blamed solely on turbulence in the global economic stage and the prospect for its continued growth.

Government officials have cited technical constraints in reporting remittance data as one of several reasons for the slowdown.

Guinigundo blamed, for instance, the so-called de-risking of banks in certain jurisdictions as one important reason behind the slowdown.

Several foreign banks have adopted de-risking measures in which financial institutions avoid, cut contact, or even terminate the accounts of clients considered as high risks, including foreign nationals in their jurisdictions.

“The closure of bank accounts of some Philippine banks engaged in remittance services and money transfer companies, including their branches and agents, resulted mainly from the stricter regulatory measures enforced by various countries on the remittance business,” Guinigundo said.

“Some banks have closed their remittance services due to increasing regulatory compliance costs

which made it challenging for them to support money transfer operations,” he quickly added.

In a recent report published in the BusinessMirror, an official of the Blas F. Ople Policy Center on Monday urged the Department of Foreign Affairs (DFA) to start discussions with 14 countries that threaten to stop the operations of remittance companies being used

by Filipino workers owing to suspicions these were being used to launder money and fund terrorist activities.

Susan Ople said the center has tried calling the countries with large Filipino populations as the United States, Australia, New Zealand and United Kingdom.

She said aside from the four, other jurisdictions like Hong Kong, Singapore, Brunei Darussalam, Austria, Canada, France, Italy, Cyprus, Papua New Guinea and Saipan have similar plans.

Guinigndo corroborated this information, saying that since 2013, bank- or independently-owned or even stand-alone remittance or money transfer companies from the Philippines operating in various countries reported the unilateral closure of bank accounts maintained with foreign banks, effectively denying them access to critical financial services, including international fund transfers.

“Without these bank accounts, the operations of Philippine money transfer companies abroad are affected because these depository accounts play a critical role in transmitting funds abroad to local beneficiaries here,” Guinigundo said.

“It must be emphasized, though, that the closure of accounts is not confined to Philippine money transfer companies. Rather, it is implemented across the global sector, with the exception only of those which meet certain retention criteria set by the foreign or global banks,” he added.

Guinigundo said that as consequence of the disruption in the money transfer chain, three interrelated consequences were identified. These include the increase in the cost of remittances, the shift toward informal channels and financial exclusion.

The deputy governor said the position paper submitted by the Association of Bank Remittance Officers, Inc. (ABROI) and the Association of Private Remittance Service Companies (APPRISE) acknowledged that the closures can potentially double the remittance cost from 6.32 percent at present to 11.77 percent down the line. “ This will be a reversal of global efforts taken in the past years to bring remittance costs down to an average of 5 percent,” Guinigundo said.

As a result, overseas Filipinos should prove unwilling to give up patronizing the informal and unregulated remittance channels.

“On top of the monetary cost, the time and hassle of filing out forms and opening an account may have turned off overseas Filipinos who may have opted to return to more traditional ways of sending home their money: the sobre-padala system,” Mapa said.

“This move decreases the reliability, certainty and safety of remittances, which is recognized

PHILIPPINE peso gains most in three months on remittance inflows, in photo are overseas Filipino workers still processing their documents at POEA office in Ortigas. NONOY LACZA

as a greater anti-money laundering/CFT risk and may increase the vulnerability of financial systems,” Guinigundo also said.

In turn, the shift to informal channels lessen the possibility of accessing a broader range of financial services from the formal financial services providers, resulting to so-called financial exlusion.

Also, in his recent economic bulletin, Department of Finance (DoF) Undersecretary and Chief Economist Gil Beltran bared certain limitations on capturing remittance data by source.

“Existing central bank database uses the location of the remitting bank as the proxy for the source of the remittance. This may be the best proxy at the moment considering that the remitter does not go far from his residence or to another country to remit his earnings. However, banks may transfer the funds to another country before remitting to the Philippines,” Beltran told the BusinessMirror.

“Since banks operate world-wide and can do the transfers online, it

is very difficult to point the exact origin of all funds being remitted to the Philippines,” he added.

Mapa of BPI said once the BSP has resolved this weakness in reporting remittances data, economists like himself shold be able to make a better assessment of the situation.

For this year, the Development Budget Coordination Committee (DBCC) has projected the remittances to grow by only 4 percent, unchanged from an earlier revision.

The 2015 remittance growth forecast was revised lower due to low actual outcome.

The slower growth in 2015 has not yet factored the impact of falling oil prices in the international market that has roiled the Middle East which hosts one of the largest populations of OFWs anywhere on the planet.

The continued decline in oil price has left government officials and economists worried and apprehensive on future remittance flows.

Only recently, Labor and Employment Secretary Rosalinda

Baldoz acknowledged the possible displacement of Filipinos working in the region once oil companies lay off employees as crude oil price falls.

“The threat mentioned by Secretary Baldoz is real and a decision to retrench these workers, to be replaced by citizens of those nations, will threaten the flow of remittances. If the overseas Filipino is unable to find a way to keep a job in these countries or are forcibly sent home to the Philippines, we may face a slowdown in the flow of foreign exchange and hard times for their families,” BPI’s Mapa said.

Data from the central bank show remittances from the Middle East total $5.243 billion in the first eleven months last year, about a fourth or 23 percent of aggregate remittances of $22.83 billion.

As of end-November that year, remittances from the Middle East grew by 9.6 percent from 2014 level.

Remittances from Asia grew by 9.57 percent during the period while such flows from the Ameri-

aderLook

sMirror

www.businessmirror.com.ph | Thursday, February 18, 2016

A7

NCE CENTERS LOOMS

DACHE FOR OFWs REMITTANCE GROWTH

10 8 6 4 2

2009

2010

2011

2012

2013

2014

2015

SHARE OF REMITTANCES BY SOURCE

ASIA AMERICAS OCEANIA

= 15.54% = 44.44% = 2.26%

EUROPE MIDDLE EAST AFRICA

= 14.55% = 22.96% = 0.23% BM GRAPHICS: JOB RUZGAL

cas grew by 0.55 percent. Remittances from Europe, meanwhile, contracted by 3.38 percent during the period.

But no matter the slowdown, gover nment of f icia ls rema in positive foreign currency inflows should persist at roughly current levels as other sectors continue to grow rapidly, such as the country’s business process outsourcing (BPO) sector. “The BPO sector is poised to take over as the biggest source of foreign exchange. It has been growing by 19.7 percent annually for the last ten years (2005 to 2015) and the BPO industry foresees continuation of double-digit growth during the next two years (18.5 percent growth) to reach $25 billion by 2017,” Beltran said.

Tourism receipts were likewise seen helping boost continued inflows should the money sent home by overseas Filipinos continue to slow in the years ahead.

“As both industries grow, the other sectors of the economy likewise attract more investments in

the country. Aside from the more popular and established IT-BPM centers of excellence such as Metro Manila, Metro Cebu, Metro Clark and Metro Bacolod, the industry also has what they call the Next Wave Cities™ (NWCs) which are rich sources of untapped IT-BPM talents and present attractive investment options,” Guinigundo said.

“More local destinations such as Cebu, Kalibo and Davao had become more accessible to international flights, resulting in higher visitor traffic. Likewise, the country’s capacity to accommodate tourists had expanded, not only in Metro Manila but also in other key destinations,” he added.

Beltran, for his part, also said the country’s manufacturing sector could lend a helping hand over the next few years.

“Manufacturing resurgence is also competing to bring in more foreign exchange. Many FDIs moving from China are benefiting the Philippines because they see the robust domestic market as a springboard to their export activities,” he said.

BPI’s Mapa, however, said receipts from the BPO industry may not prove effective substitutes for remittance flows to the country.

“Despite its strong growth in the recent past, BPOs can generate foreign exchange liquidity at a slower pace compared to overseas Filipino deployment. The BPO does make its money in foreign currency but must repatriate a substantial portion of these earnings as well as opposed to OFs who send a large portion of their salaries home,” Mapa said.

Should OFWs decide to go home due to unfavorable environment in their working stations, private economists warn the economy may not be able to absorb them quickly and efficiently into the system.

“I do not think the Philippines can successfully absorb all returning OFs in the exact field that they have left in their previous work places. Energy related workers will not find work here although perhaps construction workers will find opportunities as private and public outlays continue to grow

onshore. As for the services sector, I think we’re currently brimming with workers in the services sector (nurses and doctors come to mind) and finding a place back in the Philippines may be a tough call or it may be at the expense of currently employed Filipinos,” Mapa said.

“If there will indeed be a mass migration of labor back home, the Philippines will be hard pressed to absorb them. For years we’ve been complacent while Tita Remy sent home money, without addressing glaring deficiencies in infrastructure and institutions. Our manufacturing and agricultural sectors are in an identity flux and any workers returning from abroad who belong to these sectors may find it difficult to find jobs, sadly, in their home country,” he added.

Government officials, meanwhile, said they have adopted reform measures to boost the employment capacity of the economy.

“Institutional and governance reforms in the country are positively recognized by independent

third-party assessors as shown by the country’s elevation to investment grade territory,” Guinigundo explained.

“The Philippine Overseas Employment Administration (POEA) has reported that local jobs in construction, transport, logistics, as well as tourism and other servicerelated occupations are available for returning semi- and low-skilled OFWs. Likewise, there are 78,000 available jobs for professionals and skilled workers who may choose to come home,” he added.

DOF’s Beltran also said the government has programs helping OFWs return to the Philippines to start their own entrepreneurial activities. With the assistance of the Technical Education and Skills Development Authority or TESDA, the agency conducts training programs for entrepreneurial and livelihood skills for interested OFWs. “The BSP is also conducting financial literacy courses to assist OFWs on financial investments that could help generate sustainable income for OFWs using their

savings,” Beltran said.

Economist and Ateneo Eagle Watch senior fellow Ang said that what is critical for government is to identify jobs that are most at risk in emerging conflict areas and the slowdown in the global economy.

Ang also said what the government should do is create job opportunities that match those of returning OFWs. Guinigundo also said to sustain the country’s growth outlook as the remittances inevitably slow down over the medium to long term, there is a need for continuity of good governance to support the current reform agenda well into the next administration. Pursuing the pending PPP [public-private partnership] projects should also help secure continued economic expansion.

“I sincerely hope that incoming leaders will use the opportunity that our OFs have loaned to them to build a nation worthy of coming home to and afford them a decision to work in our homeland on better terms,” BPI’s Mapa said.

A8

Thursday, February 18, 2016 | Editor: Lyn Resurreccion

The World BusinessMirror

news@businessmirror.com.ph

Judge blocks Alabama use of oil-spill funds for hotel

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IN this September 30, 2015, file photo, oil pumps work in the desert oil fields of Sakhir, Bahrain. Russia’s Energy Minister Alexander Novak said on February 16 that it has agreed with Saudi Arabia, Qatar and Venezuela to freeze oil production at January 2016 levels if other producers do the same following a closed-door meeting in Doha, Qatar. AP

UAE energy minister refuses to discuss tentative oil cap

D

UBAI, United Arab Emirates— Dodging reporters’ questions, the United Arab Emirates’s energy minister refused on Wednesday to discuss a proposed cap to crude oil production agreed to by four oilproducing countries during a meeting the day before in Qatar, raising new questions about the proposal aimed at stabilizing global prices.

Minister Suhail Mohamed alMazrouei’s stance suggests regional rivalries also may be in play, as Russia and Saudi Arabia joined Qatar and Venezuela on Tuesday in agreeing to the deal if other producers go along. The surprise closed-door meeting, involving the four countries in the Qatari capital, Doha, apparently did not include an Emirati official.

Qatar and the Emirates, both oil and gas powerhouses in their own right, also compete with each other in the aviation industry and cultural pursuits. Al-Mazrouei, who gave a keynote address at the 2016 Council of International Schools Global Business Forum in Dubai, mentioned low oil prices in

passing in his speech. Afterward, journalists followed him outside.

“I will only talk about this conference,” he said, before smiling and walking away from reporters’ shouted questions.

Al-Mazrouei then entered a side room at the hotel hosting the event.

Security guards later arrived to put up a golden rope to keep journalists away. He left some 15 minutes later, still trailed by shouted questions.

W hether the Doha plan is enough to put a floor under prices is uncertain. The proposal depends on cooperation from a range of producers, including Iran, which is eager to ramp up its exports now that sanctions related to its nuclear program have been lifted. AP

As deaths rise, so do chances of total Takata air-bag recall

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ETROIT—As the Takata air-bag saga drags on, concer ns a re g row i ng that tens of millions of US drivers w ith cars that haven’t been rec a l led cou ld be at r i sk of death or injur y from the potentially defective devices. Federal safety regulators last month confirmed that a South Carolina man’s death last December was caused by a driver’s air-bag inflator that wasn’t under recall. It was the ninth Takata-related fatality in the US In a February 10 letter to Mark Rosekind, head of the National Highway Traffic Safety Administration (NHTSA), Sen. Bill Nelson, Democrat-Florida, urged the agency to recall all Takata inflators in US cars. He said the agency’s current approach of issuing recalls piecemeal, “appears to be confusing many consumers” who wonder if their cars have an unsafe air bag that hasn’t been recalled. Since 2008, 14 automakers have recalled 24 million vehicles to replace the inflators, which can rupture in a crash, shooting metal shards at the driver and passengers.

Experts say there could be as many as 50 million Takata air-bag inflators in cars that have yet to be called back for repairs. For drivers of those vehicles, finding out if their car has a Takata inflator can be tricky. They either have to convince a dealer to take apart the car to look, or get the automaker to tell them. Some, like General Motors and Ford, won’t tell. Nissan and Toyota won’t say if they

will disclose a Takata inflator.

Fiat Chrysler, Mazda, Mercedes and BMW say they’ll tell if asked.

NHTSA Spokesman Gordon Trow br id ge s ay s t he a ge nc y doesn’t have the data yet to justify a recall of every Takata inflator. The agency has given Takata until the end of 2018 to solve the problem or issue a blanket recall. Takata says it continues to investigate the cause; NHTSA and the auto industry also have investigations under way.

The death of Joel Knight, 52, underscores how perplexing the search for a solution is. Last December 22 Knight’s 2006 Ford Ranger struck a cow on a rural road near his home in Kershaw, South Carolina. He died after metal fragments from the driver’s inflator impaled his neck. According to a law firm representing Knight’s family, the crash was moderate and, otherwise, survivable. NHTSA says Knight’s driver air bag hadn’t been recalled because tests on hundreds of inflators, like the one used in his Ranger, did not show any failures. The passenger air bag had been recalled.

Knight’s death fits into one prevailing theory about the cause of the ruptures: his truck was an older model, and spent a long period of time in a region with high humidity. Takata is nearly alone among inflator makers in using the chemical ammonium nitrate to create a small explosion that inflates the bags in a crash. Tests show that over time, high temperatures and humidity can degrade the chemical, causing it to explode

with too much force, rupturing a metal canister that’s supposed to contain the explosion. The pieces can hit a car’s occupants.

Initially, the recalls targeted older vehicles along the Gulf Coast, and NHTSA has ordered that dealers in those areas receive the bulk of replacement inflators as they’re made. But the latest recall from Volkswagen includes cars from 2014, and a recent Honda recall has a 2016 model.

“Recent events and recalls, involving relatively new vehicles with these types of inflators, raise serious questions as to whether Takata’s ammonium nitrate propellant is inherently dangerous,” Nelson wrote to Rosekind. “I am concerned that the current approach may be needlessly incremental and fail to adequately protect public safety.”

Scott Upham, who runs a Rochester, New York, research firm that tracks air-bag sales, estimates there are 50 million unrecalled Takata inflators on US roads today.

Until they’re all recalled and fixed “people are going to keep dying,” he says.

Takata maintains that most of its inflators are safe, but says it agreed with government demands to stop making those with ammonium nitrate by 2018—except for inflators with a drying agent.

All of the deaths have been caused by driver’s inflators, and Trowbridge says all but a few thousand of those without a chemical added to keep them dry have been recalled. That means most of the

unrecalled inflators are on the passenger side, where there have been fewer serious injuries. Still, the piecemeal approach to recalls has allowed the population of Takata inflators to grow so large that a total recall wouldn’t immediately fix the problem because replacements can’t be manufactured fast enough.

Takata says it and other suppliers can make up to 1.5 million replacement inflators per month, meaning up to 18 million a year.

But some of those must go to other countries, where about 30 million more inflators, are being recalled.

In the US it would take about four years to replace inflators now under recall. So far, automakers have replaced about 5 million inf lators. That low rate is due both to the limited number of inf lators and to an issue common to most recalls: People don’t take their cars in for repairs, even with a problem this serious. Two other senators want to make sure everyone with a Takata inf lator can get a replacement.

Sens. Richard Blumenthal of Connecticut and Edward Markey of Massachusetts, in a separate letter this month, asked NHTSA to recall all the inflators and force Takata to publish all makes and models for which it has supplied air bags since 2000. The public also should be allowed to see inflator test results, they said.

“Every consumer deserves to know whether their vehicle could be lethal in a fender bender,” the senators wrote. AP

O N T G O M E R Y, A l a bama—A federal judge on Tuesd ay blo c k e d A labama from using early oil spill-restoration funds to build a 350-room beachfront hotel and conference center.

US District Judge Charles Butler ruled that state and federal trustees failed to comply with legal requirements to examine alternative uses for the money meant to address damage to natural resources. Butler blocked the state from using the money for the hotel development until the analysis is completed.

Gulf Restoration Network sued state and federal trustees over Alabama’s plans to use $58.5 million in early restoration funds—a $1-billion pot of money set up by BP to begin addressing injuries to natural resources—to build a hotel and conference center at Gulf State Park. The environmental group argued that a hotel development isn’t proper use of money meant to restore coastal damage after the largest oil spill in US history.

Cy nthia Sarthou, executive director of Gulf Restoration Network, said in a statement that the ruling shows that the Natural Resources Damages A ssessment tr ustees “cannot merely g ive lip ser v ice to compliance w ith env ironmenta l law.”

“We are hopeful that today’s ruling will ensure that all future BP-disaster-related funding flows to the best possible restoration projects,” she said.

The judge’s decision does not block the state from proceeding with the project, only from using this particular pot of money for the project.

“However, based on the administrative record before it, and the narrow issue presented by the pleadings, the court cannot enjoin the Commissioner or the State from building the lodge/conference

center with funds other than early restoration funds,” Butler wrote.

Cooper Shattuck, executive director of the Gulf State Park Project, said the ruling will not stop the lodge project.

“While we are disappointed with Judge Butler’s decision, it will not impede our progress at the park.

There are other funds available for the continued work on the lodge that do not include tax payer dollars,” Shattuck said in a statement.

Gov. Robert Bentley has said the state plans to use another $50 million from BP’s direct payments to the state for the project.

Alabama is planning to construct a 350-room hotel and conference center that can handle gatherings of up to 1,500 people.

The facility would be built on the site of an old lodge at the park that was destroyed by Hurricane Ivan in 2004.

The 2010 Deepwater Horizon rig explosion dumped 134 million gallons of oil into the Gulf of Mexico. The state argued that the hotel project will help bring people back to the coast after recreation use plummeted during the 2010 oil spill and cleanup. Bentley has said he hoped to have the hotel open by 2018.

Jordan Macha, senior policy analyst with the Gulf Restoration Network, said the early restoration money was set aside to repair the coast and could be used for projects, such as restoring wetlands or protecting habitats. “We have very few natural areas that aren’t developed on the Alabama coast as it is,” Macha said.

The state also plans to use part of the restoration funds for dune restoration and walking and biking trails and other projects at Gulf State Park. Those projects were not challenged by the lawsuit.

Shattuck said those projects will continue unaffected. AP

Obama: No excuse for Republicans not to vote on Scalia replacement

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ANCHO MIRAGE, California—President Barack Obama declared on Tuesday that Republicans have no constitutional grounds to refuse to vote on a Supreme Court nominee, and he challenged his political foes in the Senate to rise above the “venom and rancor”that has paralyzed judicial nominations.

As Obama cast the dispute over filling the seat of the late Justice Antonin Scalia as a test of whether the Senate could function, there were early signs that Republican resistance could be eroding. Senate Judiciary Chairman Charles Grassley suggested he might be open to considering Obama’s yet-to-be named nominee, an indication his party may be sensitive to Democrats’ escalating charges of unchecked obstructionism.

“I intend to do my job between now and January 20 of 2017,” Obama told reporters at a news conference. He said of the nation’s senators: “I expect them to do their job, as well.” Obama was in California for a meeting of Southeast Asian leaders gathered for two days of diplomacy. But his attention was divided at that conference.

The nine-member court, the highest in the land, is now divided evenly between liberals and conservatives. The court would be unable to issue rulings on any issue in which the justices split 4-4.

Since Scalia’s unexpected death at a Texas ranch on Saturday, White House lawyers and advisers have been scrambling to refine and vet a list of potential replacements, while also devising a strategy to push a candidate through the Republican-led Senate.

Senate Majority Leader Mitch McConnell has said he doesn’t think Obama should be putting a candidate forward. The Kentucky senator, as well as several Republicans up for reelection this year, say Obama should leave the choice up to the next president. The November elections, they argue, will give voters a chance to weigh in on the direction of the court.

Obama dismissed that notion, insisting he will put forward a replacement and believes the Senate will have “plenty of time” to give the nominee a fair hearing and a vote. Democrats say Obama has every right and a constitutional duty to fill vacancies on the court until he

leaves office next January. Obama conceded the dispute reflects years of escalating partisan hostilities over judicial nominations and that Democrats’ hands are not bloodless. Years of bickering have left the public accustomed to a situation where“everything is blocked”—even when there’s no ideological or substantive disagreement, he said.

The pace of judicial confirmation always slows in a presidential election year, as the party that does not control the White House holds out hope that its candidate will fill vacant judgeships rather than give lifetime tenure to the other party’s choices. In the past, lawmakers have sometimes informally agreed to stop holding hearings on lower court nominations during campaign season.

Obama argued on Tuesday that “the Supreme Court’s different.”

McConnell has shown no signs of shifting his opposition, and several lawmakers facing heated elections have backed him up. But the party may still be searching for a strategy.

The White House has been looking for cracks in the Republicans’ opposition as it deliberates on a nominee. If Republicans indicate they may hold hearings, Obama would have greater reason to name a “consensus candidate,” a moderate nominee who would be at least somewhat difficult for Republicans to reject. If there’s virtually no chance of Republicans bending, Obama might go another route—picking a nominee who galvanizes support among the Democrats’ liberal base and fires up interest groups in the election year. Obama on Tuesday would not tip his hand—much.

“I’m going to present somebody who indisputably is qualified for the seat and any fair-minded person, even somebody who disagrees with my politics, would say would serve with honor and integrity on the court,” he said.

Asked if that meant he was leaning toward a moderate, Obama said, bluntly, “No.” He would not comment on whether he would consider appointing a candidate during a congressional recess, a last-ditch maneuver likely to further inflame partisanship in Congress. AP

news@businessmirror.com.ph

The World BusinessMirror

Thursday, February 18, 2016

A9

Australia warns vs sending refugees to New Zealand

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A NBER R A , Australia— Australia’s prime minister warned on Wednesday that resettling asylum-seekers in New Zealand instead of deporting them to the Pacific atoll of Nauru could encourage more asylum-seekers to try to reach Australian shores by boat.

The plight of 267 asylum-seekers facing deportation from Australia to Nauru will be discussed when Malcolm Turnbull meets his New Zealand counterpart John Key for annual talks in Sydney on Friday.

Turnbull said he would not comment on any possible change to Australia’s policy of refusing New Zealand’s offer to take 150 refugees a year.

Australia has all but stopped asylum-seekers from the Middle East and Asia attempting to reach Australian shores on boats from Indonesia in the past three years by refusing to allow boat arrivals to ever settle in Australia. They are sent to detention camps on Nauru and Australia’s closest neighbor, Papua New Guinea.

A few refugees in Nauru have taken up an offer to resettle in Cambodia, which is paid by Australia to accommodate them. But the Australian government fears that offering refugees a new life in New Zealand would encourage more to make the treacherous voyage in often unseaworthy fishing boats.

“We recognize that the most important thing we have to do is not at any point give any encouragement or say or do anything that the people smugglers will use for their marketing,” Turnbull told reporters. “We have a very clear-eyed focus that ensuring our borders are secure is saving lives,” he said.

The 267 asylum-seekers came from an Australian-run immigration detention camp on Nauru to Australia for medical treatment or to support a family member who needed treatment. They all refused to go back to Nauru pending an Australian High Court challenge to the legality of Australia’s refugee policy. The court ruled against the asylum-seekers two weeks ago, leaving them under threat of deportation back to Nauru.

Key’s government reached an agreement in 2013 with the then Australian government to resettle 150 refugees a year from Nauru and Papua New Guinea.

Key said in New Zealand on Monday that the offer remained open despite it never being accepted

by Australia.

“If they want us to take people, then subject to them meeting the criteria, New Zealand would be obliged to do that because we’ve given a commitment to do so,” Key told reporters. AP

Turkey pushes case for ground operations as Kurds advance

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EIRUT—Turkey said on Tuesday it is pressing for ground operations in Syria, hoping for the involvement of the US and other allies as a force dominated by Kurdish fighters pushed through rebel lines and captured more territory near the Turkish border.

In Damascus, the UN envoy to Syria suggested that humanitarian aid would be allowed into several besieged areas on Wednesday, calling it the “duty of the government of Syria.”

“Tomorrow we test this,” Staffan de Mistura said after meeting with Syria’s foreign minister. The UN later announced the government of President Bashar al-Assad has approved access to seven such areas across the country and that convoys would head out in the coming days.

De Mistura has been trying to secure aid deliveries to improve the chances of restarting peace talks before the end of February. But those efforts have been clouded by the intense fighting north of Aleppo, where various forces backed by regional and international rivals are clashing over a crucial strip of land linking Syria’s largest city to the border with Turkey.

Syrian government troops and allied militias, backed by heavy Russian bombardment, are closing in on the area, hoping to seal off parts of Aleppo held by rebels since 2012 in what would be a major blow to the opposition. Syria’s state news agency Sana and opposition activists said government forces have seized two more villages.

US -backed Kurd ish forces, which had mainly battled the Islamic State (IS) group and remained largely neutral in the civil war, are advancing in the same region, fighting rebels and other insurgents opposed to Assad in a bid to expand a nearby enclave.

A Turkish official told reporters in Istanbul that his country is pushing for ground operations in Syria, hoping for the involvement of the US and other allies against IS. “Without ground operations, it is impossible to stop the fighting in Syria,” the official said, adding that Turkey has pressed the issue in recent discussions with the US and other Western nations.

But he ruled out the possibility

of Turkey undertaking unilateral action or the prospect of a joint Saudi-Turkish venture without broader consensus in the US-led coalition against IS. The official spoke on condition of anonymity because he wasn’t authorized to speak publicly on the issue.

In Lebanon, the leader of Hezbollah said Turkey and Saudi Arabia are using the fight against IS as a “pretext” to launch a ground operation in Syria.

Both countries are ready to start a regional and international war because of defeats suffered by rebels they support, said Sayyed Hassan Nasrallah, addressing supporters in Beirut via satellite link from his hideout elsewhere in the city.

Hezbollah’s fighters are in Syria, supporting Assad’s forces.

T he main Kurdish militia, known as the YPG, dominates the group known as the Syrian Democratic Forces, which also includes Arab fighters. The latest advances by the SDF have alarmed Ankara, which views Syria’s Kurds with suspicion. Turkey is also a leading backer of militants trying to overthrow Assad. SDF official Ahmad Hiso said Turkish troops shelled northern Syria. Since the shelling began three days ago, six civilians have been killed, including a woman and a child, he added.

The Kurdish forces have continued to advance, however, and the SDF captured the village of Sheikh Issa, cutting lines between the rebel stronghold of Marea and other parts of Aleppo province.

The SDF have also captured the major town of Tel Rifaat, formerly one of the largest militant strongholds in the province, as well as the village of Kfar Naseh to the south.

SDF official Ahmad al-Omar said dignitaries from northern Syria are mediating a deal to open a corridor for militants to leave Marea for the northern town of Azaz near the border. The move would lead to SDF forces entering Marea without fighting in what would save the town from wide destruction by Russian warplanes.

Once in Marea, SDF forces would face off against IS. The SDF has been one of the most effective forces in fighting the extremists and has liberated large parts of northern Syria. AP

IN this February 5 photo, rebel fighters of Shan State Army North (SSA-N) stand close to a wood fire after participating in morning drills in Wan Hai, an area under the control of SSA-N in northeastern Shan state, Myanmar. AP

Myanmar’s insurgents fight on despite advent of democracy

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ONG ARK, Myanmar—On a freshly scarred battlefield, a die-hard rebel army is facing off at gunfire range against a military that for decades has imposed ironfisted rule over this Southeast Asian nation. Overhead, vultures circle the mountainous terrain while insurgent soldiers crouch near deep foxholes, prepared, they say, to throw back another possible assault.

Myanmar’s civil war—the longest in modern world history— hasn’t ended, even with democracy triumphant in recent elections and the winner, Aung San Suu Kyi, pledging to end hostilities between the central government and a host of autonomy-seeking ethnic minorities.

Prospects for stopping the bloodshed are balanced on a knife’s edge.

Suu Kyi, whose National League for Democracy swept November’s elections, has promised that bringing peace will be the top priority when her government assumes power on April 1. “We will try for the allinclusive cease-fire agreement,” the Noble Prize laureate said recently.

“We can do nothing without peace in our country.”

But suspicions of the country’s military were again aroused as it battled the Shan State Army-North in these remote hills of northeastern Myanmar just as voters were casting their ballots across the country. As the countdown to democracy proceeds, so do clashes with the Kachin Independence Army, the Ta’ang National Liberation Army and others.

The rebel armies represent various ethnic groups that for decades have been fighting for autonomy while resisting “Burmanization,” a push by the Burman ethnic majority to propagate its language, religion and culture in ethnic minority regions. “No, no, no we don’t trust them,” Shan army Maj. Gen. Hso Hten said of Myanmar’s military, vowing they would only lay down their arms if their goals were fully implemented, the foremost of which is a federal system in which ethnic minorities are granted genuine autonomy. That would include use of

ethnic languages in schools and greater control over forests, hydropower and other natural resources.

During the battles in Shan state, which ended with a fragile cease-fire at the end of November, government jet fighters and helicopter gunships strafed and bombed military and civilian targets. They swept into villages, driving more than 10,000 from homes they looted and sometimes destroyed, according to refugee and Shan army accounts.

Both sides accuse one another of sparking yet another round of warfare in an insurgency that erupted in the early 1960s among the Shan, the largest of 135 officially recognized ethnic minorities that make up 40 percent of the population. The first uprising, that of the Karen, was launched 67 years ago, shortly after the country’s 1948 independence from Great Britain, followed by numerous others.

The generals ceded power to a military-backed government in 2011, paving the way for the recent elections. But the armed forces remain the country’s most powerful institution, stoking fears they will take orders not from the elected government but their commander in chief. Hso Hten, who joined rebel ranks in 1958, expressed some hope in Suu Kyi’s future government, given her overwhelming popular support.

“We are compelled to trust her because we don’t have any choice,” said the 80-year-old general in an interview in the town of Wan Hai from which his rebel army says it commands more than 10,000 troops and 46,600 square kilometers of territory. Like the

other major insurgencies—notably the Kachin and Karen—this Shan group is not a classic guerrilla outfit swooping down from jungle hideouts but more akin to a state within a state. It runs 28 departments, including health and agriculture, schools, a hospital and orphanage, and even issues its own vehicle license plates.

The Shan treasury, which gathers revenue from taxes on residents, can purchase weaponry on the black markets of China, Thailand and Cambodia. Some groups in the Shan State and elsewhere in Myanmar have traditionally financed their insurgencies through drug trafficking.

On the frontline, some 8 kilometers from Wan Hai, soldiers wield everything from Czech pistols to US-made grenade launchers from the Vietnam War. A 24-hour alert is in force, and at night the soldiers observe the campfires of the Burmese military dug into a range of undulating hills.

The fighters sleep burrowed into tiny molehill-like shelters camouflaged against aerial attacks by withered brown leaves. Use of airpower is a recent development in the fighting, and some powerful ordnance appears to have been dropped: one bomb crater measured some 5 feet in depth.

The soldiers talk of combat in October and November that killed 70 of their comrades. They file past a shattered house where they killed a Burmese commander with a rocket-propelled grenade. A few yards away, stretching across a beautiful valley carpeted by terraced rice fields, begins a no-man’s land sown with mines.

“We have this small piece of territory and want to live in peace but they still come and attack us,” said Lt. Sao Mong. “They are all over these mountains. If they don’t intend to attack again why are they still here, why don’t they withdraw?”

The Shan State Army-North, one of two main Shan rebel armies, refused to sign a cease-fire agreement last October between the government and eight insurgent groups.

But none of the more than 20 armed insurgencies have given up their weapons. The Shan general said the armed groups in total field some 100,000 soldiers, although analysts believe the figure may be less.

“The government has always said, ‘Put down your guns and we

will talk politics,’ while the insurgents said, ‘Let’s talk politics and then we will put down our guns, maybe.’ That issue is still there,” says David Steinberg, an American author of several books on Myanmar.

Suu Kyi’s party promise to expunge the legacy of nearly seven decades of hatred, suspicion and blood may prove difficult.

While some rebel groups have committed unlawful acts, including the recruitment of boy soldiers, international agencies, the United Nations and others have over several decades detailed widespread rape, torture and extrajudicial killings of civilians, even crucifixions, by the military. Villagers have been used as human minesweepers. More than half-a-million people have been driven from their homes just in eastern Myanmar.

The former government acknowledged that some atrocities did occur while its forces were fighting what it called “terrorist organizations.” But nobody has been brought to justice, Suu Kyi has announced no plans to do so and the military continues to operate in its former fashion, although the scale of atrocities appears to have lessened.

“We ran away with only the clothes we were wearing. We are afraid to go back,” said Pa Phit, a 45-year-old woman who fled with all other 60 residents when government troops entered Ho Nam village while firing their guns. “We have nothing left, not even a small spoon.” Among more than 1,400 refugees encamped on a bare hilltop was 102-year-old Nai Nang, carried over the hills by grandchildren after the troops occupied her village.

With such acts, the insurgents do not lack for fresh recruits to their cause, even if a private in the Shan army earns just $8 a month.

“We have been facing injustice, bullying and oppression since I was young,” said Sao Siha as he walked around a Wan Hai monastery where damage from mortars and air-launched rockets had been freshly repaired.

After years of witnessing killings of innocent people, he finally had enough when last October the military attacked his town of Maing Naung. The abbot of a Buddhist monastery and a monk for 36 of his 45 years, Sao Siha made what he said was a wrenching decision—to exchange his robes for a Shan army uniform. AP

A10 Thursday, February 18, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

US summit allows PHL to revisit case vs China

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RESIDENT Barack Obama and leaders of the Association of Southeast Asian Nations (Asean) have concluded their unprecedented two days of talks described as a landmark gathering that reflects Obama’s personal commitment to an enduring partnership with the diverse group of countries. It was the first time the leaders of the Philippines, Indonesia, Malaysia, Singapore, Thailand, Brunei Darussalam, Vietnam, Lao PDR, Myanmar and Cambodia have held a stand-alone meeting in the US.

The summit was conceived as part of Obama’s mission to raise the US profile in the Asia-Pacific region, where China’s territorial claims over disputed territories have raised international concerns and led to friction with Asean members.

Before the meeting with Asean leaders, Obama made numerous trips to AsiaPacific countries in line with his Asia pivot policy. The trips were meant to set the US regional agenda and to reassure allies unnerved by China’s assertiveness.

The US summit, which concluded with a unanimous call for peaceful resolution of the region’s maritime disputes, gave the Philippines an opportunity to revisit issues concerning China’s South China Sea (SCS) conduct. China says it has a historical right to virtually all of the SCS and has built artificial islands, complete with airstrips, to assert its sovereignty. The Philippines, Brunei, Malaysia and Vietnam have their respective claims in these potentially resourcerich waters, which are an important passageway for global trade.

The Philippines has brought its case against China to the Permanent Court of Arbitration, which awarded last year its first decision in The Republic of the Philippines v. The People’s Republic of China. The court ruled that the case was “properly constituted” under the United Nations Convention on the Law of the Sea (Unclos), and that the Philippines was within its rights in filing the case.

With the jurisdictional issue resolved, the case can move forward to evaluating the merits of the Philippines’s legal assertions in the SCS. The court decision rejected an argument in China’s position paper that the “2002 China-Asean Declaration on the Conduct of Parties in the South China Sea constitutes an agreement to resolve disputes relating to the SCS exclusively through negotiation.” The court said the Declaration on Conduct was a “political agreement that was not intended to be legally binding.” Thus, the Philippine initiative may influence the lethargic process of forging a binding Code of Conduct for the SCS between China and Asean.

The Philippines’s case stems from China’s nine-dash-line claim in the SCS, which is an excessive maritime claim and not in line with the entitlements for coastal states under Unclos. The country also opposed China’s illegal occupation of submerged areas in the Spratly Islands and its continued exploitation of natural resources within areas that would fall under the Philippines’s exclusive economic zone under Unclos.

The US has spoken out against China’s conduct over the disputed territories.

It has long argued for the maritime-rights issue to be resolved peacefully and is looking for Asean to take a unified stance on the issue. After the historic summit, the ball remains in the hands of Asean leaders.

Capitalism is a failure John Mangun

OUTSIDE THE BOX

N

EARLY all people that use the word “capitalism” do not have any idea of what the term means. They base their knowledge on the ideas of Karl Marx who was wrong about almost everything.

The one concept that Marx did get correct is that there is a “reserve army of labor” that is sometimes underutilized. By the same token there is always a “reserve army of capital” that is also underutilized.

“Capital” is simply “money”. In a free-market capitalist system, money is allowed to freely move to where it can be most productive and profitable. In the same way, in a free-market labor system, workers are allowed to move to whatever job that can be the most productive and individually profitable.

Marx noted there was never any mass unemployment until the industrial age. However, where he totally failed was that there was also very little surplus of goods until industrialization. Therefore, workers were

always needed to keep producing to meet demand such as one pair of shoes at a time.

It is important to note that capitalism is not just about the money needed to produce goods, but also the money needed to buy those goods. We are all capitalists and as consumers we want total freedom to buy whatever goods we desire so that we can get the best deal.

What might happen to prices and quality if the government mandated we could only buy from one department store or set rules that there could effectively be only two cell phone providers?

Free market capitalism has been a myth for many decades. Here is another recent example.

Scotland’s economy depends

It is important to note that “capitalism” is not just about the money needed to produce goods, but also the money needed to buy those goods. We are all capitalists and as consumers we want total freedom to buy whatever goods we desire so that we can get the best deal. in large measure on North Sea oil production. Scotland ’s finance minister told the government he is concerned that some of the remaining North Sea oil will never be recovered as oil companies have scaled down North Sea investments due to weak oil prices. He urged the government to cut taxes on oil companies and to consider giving loan guarantees to the sector to avoid early field shutdowns and more job losses.

Note how the government controls the movement of capital. As the private sector invested, the government took all that they could possibly take in taxes without killing the investment. Now,

when private capital cannot stay in business due to a downturn in the cycle, the government is told to intervene again by lowering those same tax rates and offer guarantees for private capital investment.

If the government had allowed the initial investment to be freely made, the oil companies might have enough accumulated wealth to continue operations until the business cycle turns up once again as it always does.

At first, the government taxed the companies thereby reducing profitability, and now it will use that same tax revenue to guarantee loans of companies that may not be profitable at the current time.

Who wins in this arrangement —the taxpayers, the workers, the economy, or is it the politicians and the corporations? The companies will get loan guarantees to stay in business even if they can’t make money. And the politicians will get campaign donations from the grateful companies.

That is what is called capitalism in the 21st century.

E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com.

Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Mutual benefit associations and microinsurance Atty. Dennis B. Funa

INSURANCE FORUM

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HE first microinsurance regulation was issued in 2006, through a circular letter. This was Insurance Memorandum Circular 9-2006. A regulatory framework was issued in 2010.

In 2012 the Alternative Dispute Resolution Framework for Microinsurance was issued. The development of microinsurance regulation can be traced to the initiatives of the Department of Finance-National Credit Council in coordination with the Insurance Commission as an adjunct of microfinance development. Microinsurance found its roots as mandatory insurance products incidental to loans and required by credit providers.

Mutual benefit associations (MBAs), as opposed to the commercial insurers, have become the dominant players in the microinsurance industry. In 2012 55 percent of the total microinsurance premiums of P3.01 billion and 38 percent of the 19.9 million microinsurance coverage were generated by MBAs. By 2013 56 percent of the total microinsurance premiums of P3.47 billion and 50 percent of the 25.2 million microinsurance coverage were generated by MBAs. By 2014 these went up to 56 percent of P3.81 billion in

microinsurance premiums and 44 percent of the 31.1 million coverage. As of end of 2014, there were 34 MBAs in the country of which 21 were engaged in microinsurance serving 3.1 million members, or 13.6 million people (members plus dependents). In 2004 there were only 187,600 policyholders (including dependents), showing an exponential leap in microinsurance coverage.

Interestingly, in 2006, there was only one MBA player engaged in microinsurance. This increased to 13 in 2009. By 2014 there were 21

MBAs dealing with microinsurance. On the other hand, insurance companies engaged in microinsurance grew from five in 2009 to nine in 2014.

As for commercial insurers engaged in microinsurance, as of 2014, there are a total of 42 insurers engaged in microinsurance, 18 life insurers and 24 nonlife insurers.

As for agency participation, there are 170 agents licensed as of end of 2014, comprising 122 individual agents and 48 rural banks. In terms of products, there were 81 life products and 81 nonlife products approved as of end of 2014.

In 2014 microinsurance generated P3.81 billion ($85.8 million) in net written premiums. This is equivalent to 1.9 percent of the net premiums written by the insurance industry.

While regulation was instituted as early as 2006, the industry still grapples with cooperatives offering unlicensed insurance products. Thus, the quest for the formalization of these informal insurers continues to be a challenge. In this regard, five strategies have been identified to formalize their activities: a) partnership with formal insurers in the form of a policy group; b) license them as an intermediary, such as an agent; c)

register as an MBA to engage in microinsurance; d) license them as microinsurance broker with lower capital requirement; and e) seek license as a commercial insurer or an insurance cooperative.

The first microinsurance provider in the country was the Center for Agriculture and Rural Development (CARD) MBA, established in 2001. In March 2005 CARD MBA, together with seven other organizations, established a microinsurance and MBA resource center known as the Risk Management Solutions Inc., later Rimansi Organization for Asia and the Pacific Inc. The founding members of Rimansi were six microfinance institutions, a rural bank and an MBA, viz: Alalay sa Kaunlaran Inc.; Kasangyangan Foundation Inc.; People’s Alternative Livelihood of Sorsogon Inc.; Rural Bank of Talisayan; Uswag Development Foundation; CARD MBA; CARD Bank; and CARD NGO. Rimansi has assisted in the establishment of MBAs. Rimansi has been converted into a microinsurer MBA association in 2015.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

No joint patrols with non-Americans

Trust Him

FREE FIRE

H

ERE’s bad news. The US Navy is planning naval exercises in the South China Sea with the Indian Navy. We offered eight bases to maintain a US presence there. None of these bases should ever be made available to any US ally, least of all to the Indian Navy. (During Cory’s time, I maneuvered to have non-US fighter planes from Asean countries thrown out of Clark and Subic. They have since been practicing in Arizona, where the tarantulas are as big as mops.) The only exception is ceremonial visits, a courtesy we must extend to the Chinese navy, as well.

India has been in cold and in very hot wars with China. During a visit there, the chief of the Indian general staff described to me the savagery of Indian-Chinese clashes in the Himalayas. Up against sheer rock face, in slippery ice and snow, Chinese and Indians shoot at each other; when guns freeze, they knife each other; and when the knives are blunted on ribs, they strangle each other. The competition is that keen, the hatred that deep. It is the same between Indian and Pakistani forces in Kashmir. All three are nuclear powers and, yet, the chief of the Indian general staff did not blink at the prospect of a nuclear exchange. India as India, he said, has the population to survive it.

We do not.

So we do not…

Want to be…

In any manner, shape, or form Involved in the China-India rivalry.

If Indian warships regularly docked anywhere in our country, we would be, as we should be, a legitimate, and a morally appropriate, target for a Chinese nuclear strike. Same with the forces of Japan, which devastated China in World War II and killed a quarter of its people; they cannot dock here except for ceremonial purposes.

These are countries at mortal odds

with China. We do not want to be near to any of them on the day of reckoning. If the US wants joint patrols, let it be with our navy such as it is. We might accept Indonesia.

But Vietnam has fought China, off and on, for 1,000 years. Malaysia has never fought a war; it cannot fight one; it only financed a bloody rebellion against us.

In fact, we can do without any allies in the South China Sea except the United States because of an existing mutual defense treaty. In its absence we would still enjoy “the stopping power of water,” as John Mearsheimer puts it in his masterly treatise, The Tragedy of Great Power Politics. The deterrent and attritional quality of turbulent or vast bodies of water, like the Channel and the Atlantic and Pacific oceans, have discouraged attacks on England and the United States.

In our case, there’s the South China Sea to the West and the Pacific Ocean to the East. This is an advantage mainland states like Malaysia, Vietnam and India do not enjoy with regard to China, which is just over a hill or across a valley floor, a mere day’s march for Chinese armies. Conquering power, Mearsheimer says, must be land power; other kinds of power, air and naval, are punitive. Only armies can hold what they take.

Learning the lessons of the Argentine debt crisis

B

EFORE Argentina’s debt crisis is resolved—and prospects have been looking better lately—it’s worth pausing to ask why the stalemate has lasted so long. (More than a decade, but who’s counting?) Preventing these kinds of fiascos will require changing what happens when a government is unable to pay its debts.

The protracted impasse in Argentina shows what’s at stake. Increasingly frustrated by Argentina’s refusal to heed court rulings, a US federal judge told its government not to pay creditors who’d agreed to settle unless it also paid the holdouts. He also forced intermediaries to help enforce his ruling.

This severe approach was understandable under the circumstances, but it sparked alarm and controversy. Both the US Treasury and State Department supported Argentina’s appeal of the judge’s ruling, arguing that it encroached on Argentina’s sovereign immunity and would harm New York’s attractiveness as a financial center. Nevertheless, the holdouts won resoundingly, later obtaining a ruling that they must be paid in full.

That left just one problem: The court couldn’t actually compel Argentina to pay. In addition, the decision imposed heavy costs on third parties, punished bondholders that wanted to settle, and created the potential for cascading suits lodged by “holdouts within holdouts” seeking better terms.

Unlike its predecessor, Argentina’s new government is willing to make a deal that’s reasonable. Whatever the outcome for Argentina and its creditors, however, the flaws in the system are apparent. When a company is unable to pay its debts, a bankruptcy procedure forces its creditors to cooperate in saving what can be saved and coming to a mutually beneficial outcome. No such procedure is available when the debtor is a government.

Nobody disputes that this gap needs

to be filled—Argentina is what happens otherwise—but there’s an argument over how best to do it. Two broad approaches are possible. One relies on changing the design of contracts so that holdout creditors can be more easily forced to settle. The other is to create an international procedure akin to a corporate bankruptcy court.

Reworked contract language can encourage settlement by majority or supermajority vote, if the need arises. These kinds of provisions—which will almost certainly be included in the bonds Argentina eventually issues—have become the norm for emerging-market sovereign borrowers. This kind of contract helps, but it might not be enough.

Collective-action clauses haven’t always worked like they’re supposed to. They failed to make the Greek debt crisis go smoothly, for instance. As that case shows, sovereign debt restructuring is almost inevitably a disorderly process, attended by severe political stress and the intervention of foreign governments.

What seemed straightforward when the contracts were drafted suddenly looks complicated—and a damaging fight between those who want to settle and those who don’t may sometimes follow regardless.

Smarter contracts are good, but governments should also cooperate in creating an international bankruptcylike procedure, ideally overseen by the International Monetary Fund. The two together won’t be a panacea, either, but the pairing would be a further way to promote cooperation over mutually destructive confrontation.

This idea isn’t pie-in-the-sky. An official plan for a sovereign debtrestructuring mechanism was drawn up nearly 15 years ago and attracted some support, though not enough for the idea to go forward. It should be revived, preferably before rather than after the next big sovereign debt crisis.

psalmist (from the Lord Himself?): Wait for the Lord, trust Him that all He promised shall be fulfilled.

Msgr. Sabino A. Vengco Jr.

ALÁLAONG BAGÁ

Teddy Locsin Jr.

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HE Lord is my light, my salvation, my refuge, my help; I shall see the goodness of the Lord (Psalm 27:1, 7-8, 8-9, 13-14). Jesus is the chosen Son, filled with God’s glory, we listen to Him (Luke 9:28b-36).

Wait for the Lord your salvation PSALM 27 is a prayer of complete trust in God. It begins by expressing profound confidence in the Lord.

The metaphors of light, salvation and stronghold are combined to reflect different aspects of divine power. If darkness symbolizes not only danger to one’s safety but also the forces of evil, light is the power that dispels all sorts of danger.

Deliverance or salvation is a gift coming out of the beneficence of a helper, a savior. And a refuge or stronghold is where one flees for safety and protection. Thus, God is characterized as having the unique power on which the psalmist places

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his trust, so much so that he does not fear, even if he is in distress.

Calling directly on God’s mercy, the psalmist pleads to be heard and to be answered, because it is the Lord his heart speaks of and his eyes seek, as it is His presence and His face of compassion he longs for. He begs not to be repelled in anger or cast off, or the Lord’s face hidden from him.

Ending with even more confidence in the Lord, the psalmist believes and hopes that he will experience the goodness of the Lord restoring him from his dire situation to full life while still in the land of the living. The final verse as an answer to his prayer is an injunction to the

Listen to Him who is full of God’s glory

THE account of the transfiguration of Jesus is replete with symbolism.

It was while praying on the mountain that Jesus was transfigured both interiorly with His face revealing divine glory and exteriorly with His clothing dazzled. Moses and Elijah, both glorified too who had encounters with God on mountains and who represent the Law and the Prophets of Israel, joined Jesus and were discussing with Him about “His exodus”, i.e., His death and resurrection, the core in God’s plan of salvation. It means the passion of Jesus was not an unavoidable tragedy, but something known to those representing the religious tradition of Israel.

Peter recognized Jesus in his glorious epiphany. Calling Jesus “master”, Peter voiced his preference that the divine apparition would not end.

He wanted to put up three tents as dwellings or tabernacles for the three glorified men. Peter judged wrongly in projecting Jesus as like and an

2016 elections: What matters most Ariel Nepomuceno

DECISION TIME

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HAT the upcoming democratic exercise in May will spell the difference in our nation’s life is no longer open to question. The campaign period has started and the fever is on.

TV, radio and social media are replete with images, songs, slogans and buzzwords propagating each candidate’s avowed program of action for the country and constituents.

The focus is on who the candidate is, his or her background, competencies, personality and, more important, the promises committed once elected.

Our countrymen will be inundated with all sorts of information so that they will be empowered and enabled to make the right choice, supposedly.

There will be enormous opportunities for Juan de la Cruz to make the right choice. Keenly observe, closely listen and learn the positions being taken by the candidates with respect to certain issues that matter most if we want the Philippines to surge forward and turn into a truly democratic and developed nation.

Relevant issues BUT what are these issues? First, we must assess the candidates’ view on Charter change. Our Constitution is now 29 years old. While it has enshrined basic freedoms and equality, provides the right of suffrage to our people and guarantees other civil and political rights, it has glaring limitations that fail to provide the necessary foundation for accelerating inclusive economic progress.

The restrictive investment climate is traced to our basic law, which still imposes a nationality requirement (60/40 capital) for public utility operation, schools, media and other businesses. Tougher requirements are imposed on ownership of land and practice of professions. This

fact has posed a hindrance to the country’s membership in the TransPacific Partnership, a trade covenant that aims to slash tariffs on different categories of goods. Other Asian countries, like Vietnam, Singapore and Malaysia, chose to overhaul their strict legal requirements for foreign investors just to come in.

There are other provisions in our Constitution that demand a re-evaluation, like decentralization and the right to autonomy of certain regions in the archipelago, the presidential system of government, which appears to be increasingly misaligned with the political culture of our people, undermines the credibility and effectiveness of the political party system, promotes personalitydriven leadership and engenders the proliferation of corruption.

Another topic to monitor is where the candidates stand on critical legislation. The 16th Congress has adjourned and it will only resume on May 22. Data would show that only two of the priority bills of President Aquino were passed, namely the establishment of the Department of Information and Communication Technology and the Foreign Investment Act. The fate of the other pending bills, like the amendments to the Electric Power Industry Reform Act, the National Land Use Act, and the

Limitations under the anti-dummy law and Foreign Investments Act of 1991 Atty. Julie Ann L. Aranda

TAX LAW FOR BUSINESS

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ASED on the Foreign Investments Act (FIA) of 1991, there are, as a general rule, no restrictions on extent of foreign ownership of export enterprises. In domestic market enterprises, foreigners can invest as much as 100-percent equity except in areas included in the negative list. A foreign investments negative list or negative list refers to a list of areas of economic activity whose foreign ownership is limited to a maximum of 40 percent of the equity capital of the enterprises engaged in said activities. In essence, foreign ownership shall be prohibited or limited to industries that are wholly or partly nationalized.

Likewise, the anti-dummy law prohibits the employment by any person, corporation, or association of an alien, who shall intervene in the management, operation, administration or control thereof, whether as officer, employee, or laborer, when the exercise or enjoyment of the property or of the franchise, privilege, or business engaged in by such person, corporation or association is expressly reserved by the Constitution or the

law to the citizens of the Philippines or corporations or associations at least 60 percent of the capital of which is owned by such citizens.

Recently, the Office of the General Counsel of the Securities and Exchange Commission (SEC) issued an opinion regarding the application of both laws. The underlying issue is whether a foreign national can assume the position as president or chairman of a domestic company and

increase his shareholdings from 25 percent to 40 percent.

In the said opinion, the primary purpose of the domestic entity is to develop real-estate projects in conjunction with modern construction methods and systems, and included in the secondary purposes is the acquisition, lease, purchase and to go into joint venture, borrow, lend and develop subdivision and condominium properties in relation to its business. Consequently, acquisition or ownership of land is incidental to its primary and secondary purposes. The SEC opined that since the purpose of the company involves acquisition or ownership land, therefore, it is partially nationalized and it is required that 60 percent of its capitalization shall be owned by Philippine citizens.

The anti-dummy law also applies in this case and the foreign national cannot act as a president/chairman of the board, nor can he increase his shareholdings to 40 percent if there are other foreign stockholders in the corporation. On the other hand, if there is no other foreign stockholder in the corporation, the foreign national can increase his shareholdings from 25 percent to 40 percent, but he

equal with Moses and Elijah. Heaven corrected the misunderstanding—a cloud covered them all signifying the hidden presence of God, and a voice from the cloud proclaimed the divine identity of Jesus. Reminiscent of the voice at the baptism of Jesus, heaven authenticated the person of Jesus as God’s Son and enjoined the disciples to listen to His words, however mysterious and daunting, to trust Him. Alálaong bagá, Lent is the season, as we struggle against the powers of evil, for our transformation into the new way of life in Jesus Christ. Our full sharing in His life is still to come; like Peter and his companions we might want to bask already in His glory, but we can only do so by sharing in His selfsacrifice, by listening to Him and trusting Him who calls us to follow Him. Conformed to Jesus, we are to be witnesses to the Christian life of commitment and integrity, goodness and compassion, which manifest God’s presence in the world.

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

Freedom of Information law, remain uncertain. Equally distressing is the failure to pass a legally acceptable Bangsamoro basic law, a piece of law that can somehow address the armed conflict problems in Mindanao. And whatever happened to the anti-dynasty bill? Surely, if we want true democratization and a wider participation of other citizens who have sincere intentions to serve the public, the perpetuation of deeply entrenched political clans should be put to an end. Those who aspire for public office should be queried, challenged and pushed to provide their plan of action with respect to alleviating poverty, hastening infrastructure development, addressing the worsening peace and order situation, establishing the rule of law, and eradicating all forms of corruption and poor governance practices. The real meaning of electoral participation lies in a full understanding of what is at stake if we make the wrong choices. The difficult and most painful questions should be asked.

Demanding for a leadership that will truly respond to our needs and shall take care of our future is plainly obvious. This is undoubtedly not an expectation but an entitlement. We deserve nothing less.

For comments and suggestions, send to arielnepo.businessmirror@gmail.com

cannot act as president or chairman of the board.

The SEC further noted that even if the company is not covered by the rules of land ownership, it may still be covered by Section 8 of FIA of 1991.

As such, if the company is a domestic market enterprise with a paid-in equity of less than $200,000 or a domestic market enterprise which involves advance technology or employ at least 50 employees with paidin capital of less than the equivalent of $100,000, it can be considered as engaged in a nationalized activity. In such instances, the anti-dummy law applies, restricting the officer position only to Filipinos and the foreign ownership to 40 percent.

The author is a senior associate of Du-Baladad and Associates Law Offices (BDB Law), a member-firm of World Tax Services.

The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at julie.aranda@ bdblaw.com.ph or call 403-2001 local 312.

2nd Front Page BusinessMirror

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Drilon vows to push economic reform bills in next Congress

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ONCEDING there is no more time to act on pending economic reform bills when lawmakers reconvene as a national canvassing board after the May 9 presidential elections, Senate President Franklin Drilon vowed to push for early passage of the unapproved measures that would lure more investors to the country in the next Congress.

Admitting at a media forum that “there are a number of measures that were left unpassed” by the Senate and the House when they adjourned last week, Drilon held out hopes that the unpassed bills, including a long-pending proposal to relax restrictions on foreign investors, could still be enacted into law.

“First and foremost are the needed amendments to the Constitution that will allow Congress to review the very restrictive provisions of the Constitution so we can open our economy,” Drilon said.

He recalled that “the conditions when we drafted the 1987 Constitution were very different from today. After 30 years

a lot of things have happened and it is very important that we respond to these challenges.” The Senate President argued there was no question “that we must not remain isolated.”

“We must be able to respond quickly and, therefore, we must have some flexibility in the constitutional provisions,” he added. Drilon, however, clarified that “I am not proposing any specific amendment.”

“What I am just saying is amend the Constitution in such a manner that a review is possible without amending the Constitution by putting the phrase ‘unless otherwise provided by law,’ which would allow us to review these policies,

First and foremost are the needed amendments to the Constitution that will allow Congress to review the very restrictive provisions of the Constitution so we can open our economy.”—Drilon -

whether they should stay or not,” he said, adding, “the first step is to enable Congress to do this.”

At the same time, Drilon said he would push for a review of the income-tax structure, pointing out that the existing brackets were set two decades ago.

“Today, 20 years after, a good percentage of our taxpayers are already in our bracket, so the original concept that the higher your income, the higher your taxes should be as a means of supporting other members of our society is no longer valid, because we are all there,” he said.

Drilon also cited the long-proposed rationalization of fiscal incentives, justifying the need to do this to attract more foreign investments.

“Fiscal incentive is granted precisely in order for foreign companies to come to our country and provide jobs to our people. That’s why they are provided incentives or income-tax holidays, and

BusinessMirror

capital exemptions from customs duties on capital equipment,” he said.

The Senate leader explained there are foreign investors who have indicated their desire to come to the Philippines and set up shop here.

“We would like to review how effective these incentives are up to today. Are they effective in terms of generating employment, is there duplication? There are so many incentive-granting agencies.

Are the present incentives granted commensurate to their contribution to the economy?” Drilon asked.

As a first step, he said, Congress crafted the Tax Incentives Management and Transparency Act, which will allow the public to scrutinize and see “whether these incentives granted are serving the purpose for which these are instituted.”

He added that these are “just some of the measures I intend to sponsor in the next Congress.”

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GROUP ASKS GOVT TO INVESTIGATE COAL STOCKPILE AT MANILA HARBOUR

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HE Philippine Ports Authority (PPA) was slammed by a cause-oriented group for allegedly allowing the storage of 40,000 metric tons of hazardous coal stockpile inside the facility of a port in Tondo, Manila.

Filipino Alliance for Transparency and Empowerment (FATE) President Jennifer Castro said the port body should immediately investigate the tons of coal stockpiles stored at the Manila Harbour Centre.

“Coal is very dangerous to human health as it emits toxic and dangerous gases, and carcinogens,” she said.

Castro called on the Department of Environment and Natural Resources, the local government of Manila and the port body to immediately cancel all environmental permits and other licenses of Harbour Centre Port Terminal Inc. for storing dangerous coal.

She explained that coal pollutes the environment and the coal facility is near residential areas.

“The health of the public and the environment are at stake here. The government and its agencies should not tolerate companies that cause pollution,” she said.

She added that residents of Vitas, Tondo, the area near the facility, have complained about the effects of the hazardous coal stockpiles on their health.

Because of the polluted environment, they suffer from various ailments, including cough, diarrhea and fever, Castro added.