BusinessMirror February 24, 2016

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Wednesday, February 24, 2016 Vol. 11 No. 139

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

‘Next admin faces 3-year infra development lag sans PPP Act’ B L S. M

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INSIDE

PRESIDENT, WITH 24% OF THE VOTE

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ZIPMATCH LAUNCHES VIRTUAL-REALITY SERVICE BusinessMirror

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However, she said that if the next administration adopts the current government’s framework in moving forward with massive infrastructure-partnership deals, such a time frame may be used to implement crucial projects that are seen to spur economic growth and improve the quality of life.

Editor: Tet Andolong

ZipMatch launches virtual-reality service THE HEART OF MAKATI

AT YOUR SERVICE

OCULUS Rift CDN.MAKEUSEOF.COM

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NLINE marketplace ZipMatch officially launched on February 11 its 360 Virtual-Reality service for Philippine real estate at Bonifacio Global City.

The virtual-reality service will enable real-estate sellers to conduct on-demand proper viewing of residential projects or model units for home buyers without needing to make the actual, physical “tripping.”

The company said the new-age technology will allow both home seekers and real-estate sellers in the home-buying process to experience a more immersive and experiential property viewing, thus, giving the buyer a feel that he or she is physically present at the property itself.

Although photos and videos in listings and seller web sites can already provide the details needed when viewing a property, ZipMatch said buyers would still want to “experience” the actual property itself for various reasons.

Furthermore, the company cited a study that there are home seekers who have personality types who prefer visual support in their decisionmaking matters on major purchases.

Moreover, property viewing is an integral step in the selling process.

ZipMatch said viewing can be the

decisive factor wherein a broker or a sales agent can convince the home buyer to seal the deal.

ZipMatch added property viewing can also tap unrepresented buyers into their professional brand as real-estate experts.

The introduction of Oculus Rift has seen the growth of virtual-reality technology across industries in the US and other developed countries. Samsung, Sony, HTC and Facebook have all significantly invested

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in the technology to allow people to explore interactive viewable content via affordable viewer headsets.

As a versatile technology, ZipMatch said that virtual reality delivers an almost perfect replica of a physical environment that simulates sensory experience enough for users to evoke the emotions of investors of this technology.

ZipMatch will be the first company in Southeast Asia to use virtual reality for real estate in the region.

second bedroom the ideal option. The Vantage’s two-bedroom unit offers finished spaces with doors that people can use to seclude themselves from any interruptions or noise, enabling them to have the space all to themselves when needed.

Having a home office provides a well-designed and comfortable place to draft plans, conduct conference calls, or even brush up on writing projects.

Residents opting to transform their extra space into a functional office can conveniently choose their own furniture that will fit their personalities.

ROCKWELL Primaries’s units offer flexibility, allowing homeowners to convert their second room to a den, nursery, an entertainment room, or even into their home office. said Arch. Rochelle Baylon, project head of The Vantage at Kapitolyo.

The Vantage offers its one-bedroom

that they would consider when purchasing a home of their own. The Vantage offers just that—an easy means to

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ONVENIENCE is almost always top priority when it comes to purchasing a new home. Located at the heart of Makati City, Shang Salcedo Place becomes the ideal option, bridging together both accessibility and a quiet respite from the city’s hectic pace.

Developed by Shang Properties Inc., the 67-story residential condominium is located between Gil Puyat (Buendia), Tordesillas and H.V. de la Costa streets in Makati City. Tucked in the tranquil environment of Salcedo Village, Shang Salcedo Place gives you access to notable establishments—from bistros, to museums and health and wellness hubs, the condominium’s prime location makes experiencing what the Salcedo Village community has to offer, whether on foot or by car, a breeze.

Marking its recent official top off, Shang Salcedo Place is on its way to becoming Makati’s newest luxury residential space.

the needs of individuals on the move.

The studio units offer open-plan living with ample space for a queen-size bed and a compact kitchen.

The one-bedroom units, with an area of 52 sq m, 66 sq m and 70 sq m, are perfect for those looking for additional space to spread out and relax. It comprise separate dining and living areas with an open kitchen space, perfect for entertaining.

The two-bedroom units, with an area of 102 sq m and 104 sq m, are ideal for young families. The two-bedroom unit encompasses a perfect balance of space and elegance. Enjoy a spacious master-bathroom layout and a generous kitchen space, which comes with an additional utilities room.

The premier three-bedroom units have an area of 139 sq m, 148 sq m and 161 sq m. The largest of the Shang Salcedo Place units, the premier three-bedroom unit gives a generous amount of space and exclusivity.

Multiple balconies open up the space even more with gorgeous backdrops every time you step out. The additional bedrooms are spacious and accommodating for your family or guests.

Other things to look forward to are

PROPERTY

Flexible units and payment terms for your dream home

“THE possibilities are endless when residents convert their second room into the space that they need. We un-

Tailored living spaces

THE condominium highlights several luxury features, including 14 typical units and seven premier units per floor

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IT’S ALL BUBBA NOVAK DJOKOVIC breezes through the first round, while Caroline Wozniacki works overtime to advance. AP

Sports BusinessMirror

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| WEDNESDAY, FEBRUARY 24, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

Total estimated value of the 14 PPP projects under procurement

IT’S ALL BUBBA

Bubba Watson hits a golf ball with so much natural ability, combined with such an unorthodox style, that it piqued the curiosity of Tiger Woods when Watson first got on the Professional Golfers’ Association Tour, and even now it’s enough to cause his peers to stop and watch on the practice range.

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The Associated Press

OS ANGELES—The swing has always come easily to Bubba Watson.

He hits a golf ball with so much natural ability, combined with such an unorthodox style, that it piqued the curiosity of Tiger Woods when Watson first got on the Professional Golfers’ Association (PGA) Tour, and even now it’s enough to cause his peers to stop and watch on the practice range.

His entourage has never included a swing coach. It’s all Bubba.

“Some of the shots he hits are so creative.

He really has his style of golf under control,” Adam Scott said. “I don’t think you can teach it.

He’s just such a natural talent. Watching a guy hit 5-iron to four different greens on the range about 85 yards, 120, 170 and 240 is pretty fun to watch.”

Scott didn’t have to watch him on Sunday, which was just as well, because it might not have been all that fun for guys trying to beat him at the Northern Trust Open. Watson took the lead for the last time by swinging so hard that he nearly came out of his shoes on the par-5 17th. The ball traveled 334 yards up the hill, setting up a 2-iron that went 256 yards and led to a twoputt birdie. He wound up winning by one shot over Scott and Jason Kokrak.

He called it “Bubba Golf” when he won the first of his two Masters titles in 2012. Everyone knows what that is when they see it. It’s just hard to describe.

“I’m not trying to do anything. I don’t work on anything,” Watson said. “I just play golf. I see a shot and try to hit it. I’m scared to death on most of them, but I try to hit it anyway.”

The challenge for Watson is what goes on between his ears and what occasionally comes out of his mouth.

Watson’s life is filled with conflict.

He rubs some players the wrong way by bragging about the value of his watch. But there are plenty of other moments of quiet charity, such as the time he walked into a tournament office and wrote a $50,000 check to help with tsunami victims in Japan without saying a word.

He doesn’t like big crowds, but he couldn’t leave Riviera fast enough on Saturday night so he could get to the Clippers-Warriors game and be part of the celebrity scene. He says he doesn’t like a lot

he refused to take part in a long-drive competition at the PGA Championship two years ago.

Watson said he is trying to get better, even though he accepts that he has flaws.

Most of the credit goes to his wife, Angie, and his caddy, Ted Scott, with whom he has worked for close to a decade.

“Angie is a saint. For her to marry me...she might have issues, too, I guess,” Watson said.

The wisecracks come easily when a trophy is nearby.

“If Angie has changed as much as I have since the day Teddy met me in 2006, we’d call her the second Mother Teresa. You know what I mean?” Watson said. “Me, I’m just a loser. I started as an F and now I’m a D-plus. But me as a person has changed, and that’s what is happening in my golf. Not the swing.

“The swing?” he said dismissively. “I can hit shots.”

Watson wept when he won the Travelers Championship for his first PGA Tour title in 2010, and he nearly flooded the 10th green at Augusta National in 2012 when he beat Louis Oosthuizen in a playoff for his first major.

He doesn’t cry as much anymore.

Yes, he still gets angry. One video that showed up on social media at the Hero World Challenge was Watson screaming at the ground to say, “MUD BALL!” after an errant shot caused by a speck of mud. It looks as though he is harping on Scott when shots don’t go his way, but that was a product of a rant caught on TV a few years ago.

Watson said he was hurt by the verbal abuse he endured at the Phoenix Open two weeks ago, when he started his week by saying he didn’t like changes to the TPC Scottsdale and that he was playing mainly for his sponsors that week. He felt his comments were misconstrued in a headline. Watson said he reads only the headlines, and he believes that’s all anyone else does. He was booed so often on Saturday in Phoenix that at least one player complained on his behalf to the tour.

Watson tries to pretend he doesn’t care what people think or what they say.

But he does.

“Deep down, the human side of me, yes, I’m pretty mad about it,” Watson said. “But I’ve got to get over it. I’ve got to be a better man.

And with those comments, I’ve got to figure out how to answer things better. All the stuff going on in my head that we’ve been working on in the last 11 years of PGA Tour life, I’ve got

SPORTS

El Niño to cut coconut output, CNO exports this year–Ucap 2.1 MMT

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CRUISE FOR NOVAK D UBAI, United Arab Emirates— Playing his first match since winning the Australian Open, Novak Djokovic beat Tommy Robredo of Spain, 6-1, 6-2, in the first round of the Dubai Tennis Championships on Monday. Djokovic’s victory brought him one match away from his 700th career singles win.

“Every milestone is very special, of course,” Djokovic said. “I wish that I make the 700th win in this tournament, obviously.”

Djokovic, a four-time champion in Dubai, took three weeks off after beating Andy Murray in the Australian Open final for his 11th Grand Slam title.

Against Robredo, he didn’t face a break point.

“I didn’t know how I’m going to start, whether I’m going to execute the game plan as I prepared,” Djokovic said. “But everything went well.”

His next opponent will be Tunisian wild-card Malek Jaziri, who won his first match of the year, beating Russian qualifier Mikhail Youzhny, 6-4, 6-1.

Sixth-seeded Feliciano Lopez of Spain won his 400th career match, beating Guillermo Garcia-Lopez, 6-1, 4-6, 6-4.

Lopez, the oldest player in the draw at 34, is playing in Dubai for the 10th time. He reached the final in 2004 and 2008.

“I’m very happy, first of all, because 400 wins is a good number,” Lopez said.

“It’s been a long time since I started playing tennis and I’m very happy I have been able to achieve this number.

It means that I was also very lucky in terms of I didn’t have injuries during my career.”

Also, fifth-seeded Viktor Troicki of Serbia was the first seed to fall in losing to Marcos Baghdatis of Cyprus, 7-6 (2), 6-2. Baghdatis holds a 4-1 career edge over Troicki.

Former No. 1 Caroline Wozniacki, meanwhile, worked overtime at the Qatar Open on Monday to avoid a firstup loss for the third time in her last four tournaments.

Wozniacki, whose ranking has dropped to No. 22, overcame Croatian qualifier Ana Konjuh, 4-6, 6-3, 7-5.

After dropping the first set, Wozniacki seemed in control when she won the second and raced to 5-2 in the third.

But Konjuh went for risky shots and was rewarded with success as she clawed back to 5-5. She went on to save eight match points before finally succumbing.

“A win is a win. I am going to take it and I am happy,” Wozniacki said. “It’s the first match and you just want to get going. I wasn’t hitting it well.”

In the second round, she will meet Australia’s Daria Gavrilova, who beat Japan’s Misaki Doi, 6-1, 6-1.

US Open champion Roberta Vinci celebrated her rise into the top 10 by putting away Lesia Tsurenko of Ukraine, 6-2, 6-1, and Italian compatriot Sara Errani, fresh off winning the Dubai Championships on Saturday, defeated Tsvetana Pironkova of Bulgaria, 1-6, 7-5, 6-3.

Another former US Open champ, Svetlana Kuznetsova, beat Julia Goerges of Germany, 6-3, 6-3, while the only upset on the day was 15th-seeded Elina

₧556.56B

“ T he ne x t ad m i n i st rat ion can save two to three years, and hit the ground right with the proposed PPP Act,” Canilao said. “But even without the law, if the next administration just adopts what we have right now and hit the ground running with the policies and institutional arrangements that are now in

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HE country’s coconut production may drop by 6.9 percent to 2.1 million metric tons (MMT) in copra terms this year, from the 2.26 MMT estimated output in 2015 due to El Niño, according to the United Coconut Associations of the Philippines (Ucap).

Ucap Executive Director Yvonne T.V. Agustin said the lack of rainfall will make it difficult for farmers to boost output and exports of coconut-based products, such as coconut oil (CNO).

“We experienced lower-than-normal rainfall level last year due to El Niño. Coconut

ing Facility, the PPP Governing Board and the contingent-liability fund. The proposed amendments include the separation of regulatory and commercial functions of government-owned and -controlled corporations, and create a list of projects called “Projects of National Significance.”

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N official of the World Bank Group’s International Finance Corp. (IFC) on Tuesday said the Competitive Selection Process (CSP), a policy which veers away from negotiated power-supply contracts, is more

likely to succeed when “harmonized” with regulatory issues.

Speaking before the PPP Conference on Transportation, Energy & Health, IFC principal industry specialist Luis Maurer said an effective competitive procurement process does not wok in a vacuum, but has to be harmonized with several regulatory

PESO EXCHANGE RATES n US 47.6300

BMReports

PHL THROWS CASH VS TRAFFIC JAMS AS PUBLIC TRANSPORT SYSTEM FALTERS B R C | Researcher & D D. E | Editor

Projected coconut output this year farmers will feel the effects of that this year,” Agustin told the BM.

Data from the Philippine Atmospheric, Geophysical and Astronomical Services S “C,” A

IFC: CSP should have different modes

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place, that will save them two to three years. It took us about that time to really gain the momentum.” Canilao’s team is pushing for the passage of the PPP Act, as it will hasten the pace of project implementation.

When approved, the PPP Act will institutionalize the Project Development and Monitor-

VIRTUAL reality KOTAKU.COM

FLEXIBLE AND PERSONALIZED CONVENIENCE AT THE VANTAGE

OR most people, having a second room at home usually means reserving it for visiting guests and family members, while some prefer to have their own space at home to do recreational activities or to enjoy the perks of a walk-in closet in their condo unit. Rockwell Primaries recognizes the growing need for a more flexible condo unit that will cater to their homeowners’ lifestyle. This is why The Vantage at Kapitolyo offers its one- and two-bedroom units that can be transformed into the space that one needs.

“With the continued increase in demand for affordable premium quality of living, we at Rockwell Primaries make sure that every inch of space in our units is flexible and can easily accommodate our homeowners’ interior-design requirements and needs.

THE Naia Expressway Phase II Project is a four-lane elevated highway connecting the endpoint of Phase I to the Pagcor Entertainment City. It will provide access to Naia terminals 1, 2 and 3, as well as an interface with the Skyway and Cavitex. Apart from the main viaduct, there are 13 entrance and exit ramps and four connecting ramps. The project will benefit 80,000 travelers per day and is expected to reduce travel time from Skyway to Terminal 1 from 24.3 minutes to 8.2 minutes. (Note: The panning of the camera produced the double image.) NONIE REYES

issues pertaining to second-generation market reforms.

“Auctions do not operate in a vacuum; rather, they must be an integral part of a country’s vision, policies and regulations to reform and expand the power sector,” Maurer said.

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Conclusion

OW many cars must one Filipino family have? More than two even, for some.

“Those who are well-off in life, they buy their kids cars, so as they would need not be bothered by the daily hassles of commuting, so each family member has his or her own car,” Isuzu Gencars Inc. Sales and Marketing Manager Ariel Raymundo told the BM. According to Raymundo, these families can do so because the monthly rate is cheap.

“Nowadays, we will surely feel the presence of traffic [congestion] more, since the prices of gas rolled back, meaning people will most likely use their cars more,” Raymundo said.

He added that rollbacks in prices of diesel and gasoline have also attracted consumers to buy cars.

Raymundo said another factor influencing consumer behavior is marketing promotion

ROY DOMINGO

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HOULD lawmakers fail to pass the proposed amendments to the buildoperate-transfer law, the next administration is likely to waste up to three years just to gain momentum and effectively develop critical infrastructure through the so-called PublicPrivate Partnership (PPP) Program, PPP Center Executive Director Cosette V. Canilao said on Tuesday.

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S “IFC,” A

n JAPAN 0.4220 n UK 67.4250 n HK 6.1308 n CHINA 7.3019 n SINGAPORE 34.0457 n AUSTRALIA 34.4496 n EU 52.5549 n SAUDI ARABIA 12.7030

Source: BSP (23 February 2016 )

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campaigns by companies. “Promos help entice customers with the drop in car prices, as well,” he said. “Even auto dealers give promos to attract more customers to purchase vehicles, car dealers give huge cash discounts to finally push the customers to buy.”

Passers-by

HOW many cars, to note, are on the roads of Metro Manila?

The stretch of the Epifanio de los Santos Avenue (Edsa), for one, carries 170,000 vehicles a day while Circumferential Road 5 (C-5) sees 136,000 vehicles passing its stretch on the average. The Osmeña Highway has 115,000 cars per day and Roxas Boulevard has 75,000 vehicles per day.

A total of 153,206 vehicles per day traverse Pasay from Edsa to F.B. Harrison Street, while an estimated 113,276 vehicles per day use the Edsa-Taft Avenue route.

Pasay City local government officials estimated a total of 266,482 vehicles per day went through the roads within city borders in 2014.

Current government data based on 2007 statistics showed the number of vehicles traversing the country’s roads is growing at an average 3.12 percent for sedans, 5.88 percent for utility vehicles and 21.26 percent for sport-utility vehicles.

The number of trucks traversing the roads is growing at an average 4.72 percent, while buses at 3.35 percent. The number of motorcycles and tricycles is growing at an average 12.13 percent and trailers at 1.92 percent.

In a report published by the Makati local government for the year 2011, the number of vehicular trips conducted daily in

the city alone is around 13 percent.

From the total vehicular trips in Metro Manila of 4.5 million daily, 594,872 trips come from the district of Makati.

Fifty-five percent of the total vehicular trips in Makati City are cars, about 25 percent are jeepneys and 14 percent are trucks. A low 6 percent are buses.

As the population of Metro Manila grows at a rate of 1.8 percent annually, the number of vehicles is expected to, likewise, increase.

A safe conjecture would be the growth in people buying and using vehicles would lead to more congestion on Metro Manila roads.

4.5M

Impact

TRAFFIC congestion in Metro Manila costs the country around 5 percent of annual GDP, which accounts for P15 billion in total losses.

A report by Segundo E. Romero, Danielle Guillen, Lorenzo Cordova and Gina Gatarin added that the losses are in terms of the inefficient use of man hours and fuel. The report titled “Land-Based Transport Governance in the Philippines: Focus on Metro Manila for the year 2014” also included the discomfort experienced by commuters and motorists as a loss due to traffic congestion.

The Japan International Credit Agency (Jica) noted that the Philippine economy lost in 2014 an estimated P2.4 billion a day due to traffic congestion. This is expected to grow to about P6 billion per day by the year 2030 if there will be no action done to address the traffic problems the country continues to face.

Hard, soft

THE government is not sitting idly by the steering wheel, if we are to

The total vehicular trips in Metro Manila every day believe Public Works Secretary Rogelio L. Singson.

According to Singson, roadinfrastructure development is one of the ways the government addresses the problem of traffic congestion.

“The DPWH [Department of Public Works and Highways], as early as 2011, identified key road projects, either ongoing or new, for Metro Manila and within a 200-kilometer radius to improve and decongest Metro Manila,” Singson said. “In addition an interagency effort is under way to improve the capacity of Edsa, giving priority to buses with the exclusive use of bus lanes.”

Jose Regin F. Regidor, a professor of the Institute of Civil Engineering at the University of the Philippines Diliman, added “there are soft and hard measures being undertaken

and planned for implementation” by the government.

Regidor explained that soft measures refer to policies and enforcement, which include number coding and the truck ban. He added that enforcement includes a variety of strategies and tactics that the Metropolitan Manila Development Authority, local government units and the Philippine National Police-Highway Patrol Groupare implementing throughout Metro Manila, including major roads like Edsa.

Hard measures, Regidor further said, refer to infrastructure projects like road construction and public transport projects. These include the elevated tollways (Ninoy Aquino International Airport Expressway and Skyway) and the extension of

NONIE REYES

PHL throws cash vs traffic jams as public transport system falters the Light Rail Transit Line 2 from Santolan to Masinag, he added.

“The hard infrastructure will take time. Typically, a new railway line would need six years from plan approval to operation. At least 54 km of additional rail lines could have been completed from 20102016; but the P-Noy administration will exit with zero additional rail line,” Rene S. Santiago, a traffic expert, explained.

“The actual completion of projects has an uncertainty about them,” Regidor said. “The target is to finish major projects like the Naia Expressway, Skyway connector and the LRT Line 2 Extension within the next three years.

However, Regidor said “other major projects that have not started yet won’t probably be finished within the term of the next president.”

“Travel-demand management measures, like the number coding and truck ban, have been implemented for many years now with the coding scheme having been tweaked several times already,” he added.

“These measures and projects are in different stages of implementation and procurement. More important, it is to fast-track our mass-transport system for Metro Manila,” Singson also said.

Sr. Supt. Moises Pagaduan of the PNP-HPG said actions and plans are already being implemented to help ease traffic congestion that motorists face every day.

“Str ict implementat ion of traffic laws, rules and regulations and manning of the HPG personnel along the choke-holds of the metropolis can help lessen and alleviate traffic,” Pagaduan told the BM. With a report by Mia

Mallari

Coconut. . .

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Administration (Pagasa) showed that the average monthly rainfall in coconut-producing regions in 2015 were below normal levels.

The development of coconut lasts about one year, from flowering to maturity.

The drop in coconut production will lead to the lack of raw materials used for the production, and therefore, decrease the country’s outward shipments of coconut products, such as coconut oil (CNO)—the country’s top farm export.

“Export is projected to drop by 10.6 percent to 1.33 MMT in copra terms from prior year [exports] estimated at 1.49 MMT, following expectations of reduced harvest,” the Ucap said.

Outward shipments of CNO in 2016 are expected to reach 750,000 MT, 10.7 percent lower than last year’s exports of 839,887 MT. Copra meal exports may go down by 7.76 percent to 350,000 MT, compared to the 2015 exports of 379,459 MT. Desiccated coconut exports is seen to decline by 11.28 percent to 75,000 MT from 84,538 MT, while oleochemical shipments may drop by 3.36 percent to 30,000 MT from 31,043 MT. Copra exports may decline to 460 MT this year from 564 MT in 2015.

Coconut Oil Refiners Association President Jesus L. Arranza said the slow recovery of coconut trees after the devastation of Supertyphoon Yolanda (international code name Haiyan) in 2013, and the infestation of coconut-scale insects, or cocolisap, will also affect output this year.

“We are still reeling from the negative impacts of strong typhoons that damaged our coconut trees. It takes one-and-a-half years to recover from typhoons, but in the case of Yolanda, we needed to replant coconut trees. That takes about seven years,” Arranza said.

While coconut trees are being replanted and farmers are trying to recover from typhoons, he said they should practice intercropping or find other sources of livelihood, such as growing farm animals.

Arranza said the government should extend its assistance to the affected farmers and provide corn seeds or disperse farm animals to them.

The Philippine Council for Agriculture and Natural Resources Research and Development (PCAARRD), for its part, said it is investing P520.50 million for its research and development efforts aimed at boosting the local coconut industry.

“The industry faces a lot of problems, among which is low productivity [46 nuts per palm per year] due to predominantly old and senile palms. Currently, the country has more than 75 million old and unproductive palms in 1.03 million hectares,” the PCAARRD said.

The agency said coconut-bearing trees need to be replaced following the devastation of Yolanda in the Visayas and Typhoon Pablo (international code name Bopha) in Davao Oriental. There are also areas in Calabarzon that need replanting after the infestation of coconut-scale insects.

“Major science and technology interventions are needed to facilitate the rapid production of quality planting materials using high-yielding coconut varieties or hybrids, management-control strategies against insect pests,” the agency said.

Last year the country’s exports of CNO exceeded Ucap’s target of 804,000 MT by 4.46 percent. However, this is almost 2 percent lower than the 856,973 MT shipped out in 2014.

Data from the Philippine Statistics Authority showed that the value of CNO shipments in 2015 declined by 6.9 percent to $1.12 bi l l ion f rom $1. 20 billion in 2014.

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Wednesday, February 24, 2016 A3

1998-like pain seen as Asean debt defaults spread

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AJAH & Tann Singapore Llp., Southeast Asia’s largest law firm, reckons the region’s rising bond defaults will inflict as much pain on creditors as the financial crises of 2008 and 1998.

As distress spreads from shipping to mining and retail to construction industries, the law firm said in an interview that recovery rates will be similar to those seen in the global credit meltdown and Asian financial crisis.

Secured creditors recover only less than 33 cents on the dollar from insolvencies in East and South Asia, compared with more than 80 cents in the US, according to World Bank studies. Rival law firm Hogan Lovells US Llp. said in an interview that regional banks will likely boost sales of bad loans in coming months.

“The trough in the mining cycle seems to be continuing and some say it will be a while more before any significant recovery is expected,” said Sim Kwan Kiat, Rajah & Tann’s head of restructuring and insolvency based in Singapore.

“From experience, the lower end of the spectrum for recovery rates this

time round in 2016 is unlikely to be much different from those in 2008 or 1997-1998.”

Meanwhile, bad loans in Singapore rose to a six-year high in 2015.

Rating firms last month placed energy and mining companies globally on review for downgrades, the Baltic index of shipping rates last week reached the lowest since its 1985 inception and Singapore home sales had the worst start to a year since 2009.

112 defaults

ENERGY firms dominated 112 global bond defaults last year, according to Standard & Poor’s, as the slowest Chinese growth in two decades helped drive prices for commodities, from oil to iron ore and coal, to multiyear lows.

In Southeast Asia Indonesia’s PT Berau Coal Energy and PT Trikomsel Oke, and Thailand’s Sahaviriya Steel

Industries Pcl. have missed bond and loan repayments. Sembcorp Marine Ltd., the world’s secondlargest oil-rig builder, had its first quarterly loss in at least 12 years as clients canceled orders.

Berau Coal flagged the depth of distress in regional credit markets when it bought back $150 million of bonds at 30.3 cents in December.

That’s the lowest since China’s Asia Aluminum Holdings Ltd. repurchased notes at 22.5 cents before it collapsed in March 2009. The price of distressed buybacks in Asia since 2008 averaged 48 cents on the dollar, Bloomberg data show.

Offshore investors have challenged PT Bakrie Telecom’s restructuring in US courts, saying their principal would be trimmed to between 7 and 19 cents on the dollar under the Indonesian firm’s local proposal.

In 2009 bondholders recovered under 7 cents on the dollar from the failure of Singaporelisted Celestial Nutrifoods Ltd. and Asia Aluminum Holdings, according to estimates by Greenwich, Connecticut-based Gramercy Funds Management Llc.

More work

RAJAH & Tann has seen as much as a 30-percent rise in restructuring

and insolvency work over the past two years, Sim said.

His firm was involved in cases related to marine fuel supplier OW Bunker A/S, New Delhi-based contractor Punj Lloyd Ltd., China Fishery Group Ltd. and Bakrie Telecom.

It also worked on the insolvencies of Siva Shipping and Mercator Lines Singapore Ltd. Sim sees similar trends in the shipping industry emerging throughout the region, following the slump in oil and gas prices, and predicts that construction will continue to see tough times.

After a steady stream of restructuring mandates focused on commodities, coal and oil producers, Hogan Lovells is starting to see signs of stress in the retail industry, said Shaun Langhorne, a restructuring partner based in Singapore.

The creditworthiness of Asia’s junk-rated borrowers has weakened as investors sought the highest risk premium in four years to own their debt, with the spread over government securities jumping to 904 basis points earlier this month from as low as 596 basis points in May, according to a Bank of America Merrill Lynch index. Ructions in Asia’s credit markets have wiped out more than $11 billion of junk-bond value from the peak in April last year, while Moody’s Investors Service said in January the negative rating trend for Asia’s nonbank corporates can only worsen in 2016.

Another purge

DBS Group Holdings Ltd., Southeast Asia’s big gest bank, liqu id ated some bad loans l ast

December, CEO Piyush Gupta said on Monday. Rival lender United Overseas Bank Ltd. last week said delinquencies may come from the oil and gas sector, with S$1 billion of loans tied to exploration companies.

“It’s not just the oil and gas, it’s the larger commodity supercycle that’s obviously coming off,” Gupta said. With regards to bad loans in the offshore marine sector, “we were able to monetize 60 percent of the collateral in the fourth quarter.

We took no big w r ite - of f, t he residu a l a mou nt of t he loans went into nonperforming assets,” he said.

The 376 listed companies in Southeast Asia have accumulated $100 billion of debt tied to the steel, metals, mining and energy sectors based on their latest filings, Bloomberg-compiled data show. While that fell from $108 billion a year earlier, it surged from $47 billion in 2009.

Hogan Lovells expects “banks in the region to be scrutinizing their loan book and looking at ways to rationalize,” Langhorne said. “The bundling of nonperforming loans for disposal is likely to be a trend in the coming months.” Bloomberg News

A4 Wednesday, February 24, 2016

BMReports BusinessMirror

news@businessmirror.com.ph

‘Policy, investments in place to achieve Aichi Biodiversity goals, but more needs to be done’

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N official of the Department of Environment and Natural Resources (DENR) said on Tuesday that policies have been put in place by the Aquino administration to boost the country’s chances of achieving the Aichi Biodiversity Targets.

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PHOTO COURTESY OF DENR-BIODIVERSITY MANAGEMENT BUREAU

The Aichi Biodiversity Targets measure the compliance of Asean member-countries of the Strategic Plan for Biodiversity 2011 to 2020 adopted during the 10th meeting of the Conference of the Parties, 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.

There are 20 targets geared toward promoting biodiversity conservation. Among the targets are to enhance the people’s awareness of the values of biodiversity and the steps they can take to conserve and use them sustainably; integrate biodiversity values into national and local

The number of goals under the Aichi Targets geared toward biodiversity conservation development, and poverty reduction strategies and planning processes; eliminate incentives and subsidies harmful to biodiversity; business and stakeholders at all levels have taken steps to achieve or have implemented plans for sustainable production and consumption, and have kept the impacts of use of natural resources well within safe ecological limits.

Environment Assistant Secretary for Administration and Finance

Corazon Davis said that most of the policies put in place by the Aquino administration are also supported by substantial investment made by the government over the past five years.

The Philippines, she said, is

also aggressively engaging in public awareness programs, including biodiversity conservation.

“We have consistently increased investment for biodiversity conservation. Direct and indirect, like NGP [National Greening Program], beach forest and mangrove rehabilitation,” Davis, also focal person for environmental education of the DENR, said in an interview.

Davis led the Philippine delegation during the recent Asean Conference on Biodiversity 2016 organized by the Asean Centre for Biodiversity held in Bangkok, Thailand last week, during which a midterm assessment of the accomplishments of the 10 Asean member-countries was highlighted.

According to Davis, the Aichi targets focus on biodiversity conservation.

She enumetated three categories

of biodiversity which the government can claim to have effective intervention. These are ecosystems, species and genetics.

This year Davis said more than half of the DENR’s budget is allocated for various environmental protection programs, such as the NGP. “The NGP is not just rehabilitation of our forests. It is also a food security and poverty-alleviation program,” she said. The total log ban, Davis added, is aimed at protecting the country’s forest ecosystem, including the wildlife that thrive within.

The P1-billion Beach Forest and Mangrove Development Program, she said, is also geared toward enhancing coastal marine biodiversity.

“We are rehabilitating the ecosystem, providing income and work for coastal ecosystem,” she added.

The government, she said, continues to engage other participants such

SC gives Comelec 5 days to respond to Gordon’s petition B J R. S J

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HE Supreme Court (SC) on Tuesday ordered the Commission on Elections (Comelec) to comment on the petition filed by former Sen. Richard J. Gordon seeking to compel the poll body to issue voters’ receipts during the May 9 elections.

At a news briefing after the High Court’s regular en banc session, SC Spokesman Theodore Te said the magistrates gave the Comelec a nonextendible period of five days from receipt of notice to comment on the petition for mandamus with extremely urgent prayer to set for oral arguments filed by Gordon and Bagumbayan-Volunteers for a New Philippines.

Citing the urgency of the matter, the High Court directed its clerk of court to serve the notice to the Comelec also on Tuesday.

Te, however, clarified that the SC’s action did not necessarily mean it was giving due course to the petition.

In a 24-page petition filed on Monday, Gordon accused the Comelec of continuously violating Section 7 (e) of Republic Act 9369, or the Automated Election law, which mandates the implementation of Voter Verification Paper Audit Trail (VVPAT) as one of the safeguards to ensure the sanctity of the ballot.

A VVPAT consists of physical paper records of voter ballots as voters have cast them on an electronic voting system.

The voter-verified paper refers to the fact that the voter is given the opportunity to verify that the choices indicated on the paper record correspond to the choices the voter has made the ballot.

Gordon argued that VVPAT is a “critical and indispensable” security feature of the automated voting machine, one that the Comelec must implement.

However, Gordon pointed out that the Comelec has violated the said requirement under the automated election system during the 2010 and 2013 elections, and possibly again this coming elections if the Court will not grant the petition.

To prevent a travesty of the May 9 polls through flagrant and unconscionable violations of the automated election laws, Gordon said it is imperative for the SC to issue a writ of mandamus and order the Comelec to include the VVPAT feature.

In the 2010 and 2013 polls the Comelec en banc voted 7-0 against the issuance of the voting receipts.

The Comelec decided to exclude the said feature of the voting machines due to apprehensions that it might be used for vote buying and that it could potentially extend the vote-counting process from six to seven hours.

as the Housing and Land Use Regulatory Board to include biodiversity in the Comprehensive Land Use Plans of local government units (LGUs).

Through the protected areas (PA) system, Davis said, many key biodiversity areas are protected against threats.

Also through the PA system, the government is able to implement various livelihood programs.

The DENR, she said, is also working in partnership with various learning institutions to conserve the country’s genetic pool of traditional crop varieties and livestock.

While Davis said the Philippines has achieved so much, still, she said much needs to be done.

The DENR, she said, is pushing for the integration of biodiversity conservation in the K to 12 curricula within the next five years, and talks with concerned agencies are in various stages toward such end.

In terms of addressing pollution, wherein almost all of 10 Asean member-countries have failed, Davis said that the government through the DENR is stepping up various initiatives to promote clean air and water as mandated by the Clean Air Act and Clean Water Act. According to Davis, through the programs on addressing air and water pollution problems, the DENR is engaging various stakeholders, including the LGUs, academe and private sector, as well. One of the program to rehabilitate the country’s rivers, the Adopt-an-Estero program that taps the private sector as partners to dredge, clean up and maintain river tributaries or estero. On clean air, the DENR partners with the private sector to monitor the air quality and advocate for policies to reduce the level of air pollution caused by mobile sources or motor vehicles, particularly in Metro Manila.

She said the biggest challenge is address the country’s solid-wastemanagement problem, which will help address the problem on water, as well as air pollution. Jonathan L. Mayuga

‘Next admin faces 3-year infra development lag sans PPP Act’

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  

By virtue of being included on the list of projects of national significance, projects will be “insulated” from local laws, among others by local government units.

The proposed amendments also include allowing time-bound temporary restraining order and the extension of the period for Swiss Challenge to six months from the current twomonth period.

Also, the proposal will give the executive director of the PPP Center a fixed tenure, and will, likewise, make the body a voting member of the Investment Coordination Committee and the Cabinet Committee of the National Economic and Development Authority (Neda).

“In terms of just a fluid inputs from the Cabinet, with respect to infrastructure, having PPP Center there would help provide the necessary information to the President,” Canilao said. “PPPs play a big part in developing infrastructure; it might be necessary that there be an impartial body covering PPPs that is part of the Cabinet.”

Canilao is leaving office on March 8.

“I leave the [PPP] Center confident that the people who will be continuing on are steadfast, well-equipped and up to the challenge of making the program better than it is today. My heartfelt gratitude to them for trusting me,” she said.

C a n i l ao h a s recom mended l aw yer and PPP Center consultant Andre Palacios to replace her.

“We now have a long list of projects that the private sector will hopefully continue to participate in. We have installed in our processes and legal framework a means of instituting continuity and transparency,” she said.

news@businessmirror.com.ph

AseanWednesday

Singapore’s consumer prices in longest slump since the 1970s

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INGAPORE’S consumer prices fell for a 15th straight month, the longest streak of declines since 1977, prompting authorities to cut this year’s inflation forecast, amid a global oil-price slump.

Consumer prices declined 0.6 percent from a year earlier in January, as transport, housing and communication costs slid, data released in Singapore on Tuesday showed. That matched the median estimate in a Bloomberg News survey. Core inflation, which excludes private transport and accommodation costs, accelerated to 0.4 percent last month.

The numbers signal a period of economic weakness ahead, as Singapore prepares to unveil updated estimates for fourth-quarter GDP data on Wednesday. The trade-dependent economy, which is also a financial-services center, probably grew less than previously estimated last quarter, according to Bloomberg surveys.

“Whenever inflation hits the trough, the economy usually dips into recession,” said Irvin Seah, senior economist at DBS Group Holdings Ltd. in Singapore. “Every trough is marked by some forms of economic difficulty.”

Authorities lowered Singapore’s inflation forecast for 2016 to -1.0 percent to 0 percent, from a previous range of -0.5 percent to 0.5 percent. They cited “the significant step-down in global oil prices in recent months and the larger-thanexpected decline in” the cost of car-ownership permits at the start of the year.

The forecast for the Monetary Authority of Singapore (MAS) core inflation measure was kept at 0.5 percent to 1.5 percent.

“External sources of inflation are likely to remain muted, given ample supply buffers in the major commodity markets and weak global demand conditions,” the MAS and Ministry of Trade and Industry said in a joint statement.

“Notably, global oil prices have fallen significantly since mid-October, and are expected to average lower for the whole of 2016 compared to last year.”

Domestic wages may rise at a more moderate pace this year, while car prices and housing rentals will continue to dampen overall inflationary pressures given the expected increase in the supply of car-ownership permits and newly completed housing units, the authorities said. Bloomberg News

BusinessMirror

Editor: Max V. de Leon • Wednesday, February 24, 2016 A5

Decade-old trade talks involving Asean members to see new offers

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OFTENING its earlier stand, India has decided to conclude a low-ambition free-trade agreement (FTA) with the seven-nation grouping Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec).

Negotiations for a deal last September failed to reach a consensus, after India’s proposal to revise tariff cuts decided a decade ago was opposed by other members, especially Thailand.

“We are waiting for the secretariat to give dates for the next round of negotiation. We want to close it with a low-ambition agreement. There are small irritants that we will try to negotiate and finish.

It will be a comprehensive agreement, including goods, services and investment.

We can use the Safta [South Asian Free Trade Area] template for services to close it because we realize movement of skilled professionals is a sensitive issue,” a commerce ministry official said, speaking on condition of anonymity.

In the September meeting in Bangkok between the trade officials of India, Sri Lanka, Bangladesh, Nepal, Bhutan, Myanmar and Thailand, India suggested there was a need for fresh offers for tariff cuts in goods, saying offers made 10 years ago do not hold good now. But Thailand opposed it, saying it would lead to endless negotiations.

While Bimstec has been an underperformer, as the same nations are also

Bimstec

The emerging trade bloc consisting of India, Sri Lanka, Bangladesh, Nepal, Bhutan, Myanmar and Thailand

engaged under more vibrant groupings such as Safta, the Asean and the Regional Comprehensive Economic Partnership (RCEP), no member has called it quits.

Ram Upendra Das, a professor at the Research and Information System for Developing Countries (RIS), said that while India agrees to a low-ambition deal with Bimstec, it should keep the ambition high for a comprehensive trade agreement between Safta and Asean.

“It will create a bridge between South Asia and Southeast Asia. It will also reduce our dependence on the RCEP architecture, which is driven by other major economies

in the region,” he added.

The initiative to establish the Bangladesh-India-Sri Lanka-Thailand Economic Cooperation (Bistec) was undertaken by Thailand in 1994 to explore economic cooperation on a subregional basis involving contiguous countries in Southeast and South Asia around the Bay of Bengal. Myanmar was admitted in December 1997 and the initiative was renamed as Bimstec.

The Bangkok summit in 2004 agreed to change the acronym of Bimstec to Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation.

The framework agreement on the Bimstec Free-Trade Area was signed in 2004, but it was not made operational.

A number of issues—such as modalities of tariff reduction and elimination, size of the negative list, criteria for rules of origin, mechanism of dispute settlement, safeguard measures, customs operations and negotiations on the agreements on service and investment—are yet to be finalized.

The member-countries established an institutional arrangement in the Trade Negotiating Committee (TNC) in 2004 for conducting negotiations to finalize these issues, as stipulated in the framework agreement. However, even after 19 rounds of negotiations, stretching over 10 years, they have not been able to reach a consensus over issues, such as market access or a dispute settlement mechanism.

This is in contrast with the FTA between Asean and India, which was proposed in 2003 and came into effect in 2010.

We want to close it with a low-ambition agreement. There are small irritants that we will try to negotiate and finish. It will be a comprehensive agreement, including goods, services and investment.”

The third Bimstec summit was held in March last year in Naypyitaw, Myanmar’s capital. In the summit declaration, the leaders had directed the Bimstec TNC to expedite its work for the conclusion of the agreement on trade in goods by the end of 2014, and to continue its efforts for early finalization of the agreement on services and investments.

The share of India’s trade with Bimstec remains much below its potential for reasons, such as poor connectivity and hurdles in trade facilitation leading to high trade costs and weak supply capabilities, especially in less developed nations like Myanmar, Nepal and Bangladesh.

India’s exports to Bimstec nations rose 16.6 percent in 2014-2015 to $22.3 billion, while its imports from the same countries rose 8 percent to $9.3 billion during the year. MCT

The W

Business

A6 Wednesday, February 24, 2016 * Editor: Lyn Resurreccion

Seas rising faster than any time in past 2,800 years W

BRITAIN’S Prime Minister David Cameron makes a statement outside 10 Downing Street in London on February 20. Cameron said on Saturday a historic referendum on whether to stay in the European Union will be held on June 23. AP/TIM IRELAND

Pound plunges as Cameron makes pitch against leaving EU

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ONDON—A vote to leave the European Union (EU) would be “a great leap into the unknown” at a perilous time for Britain and the West, Prime Minister David Cameron said on Monday, as uncertainty over the UK’s future in the bloc sent the pound plunging on currency markets.

As the political battle for Britain’s future entered high gear ahead of a June 23 referendum, Cameron told lawmakers that membership in the 28-nation EU boosted the country’s economy and security.

He told the House of Commons that in the face of threats, including Russia’s muscle-flexing President Vladimir Putin and Islamic State group attackers in the Middle East, “this is no time to divide the West.”

“Leaving the EU may briefly make us feel more sovereign,” he said, but argued the UK would be “stronger, safer and better off ” within the EU. Cameron said a deal he struck on Friday with 27 other EU leaders gives Britain “special status,” exempting the UK from ever-closer political bonds within the bloc and protecting the rights of the pound against the euro currency used by 19 EU countries.

$1.4058 The pound dropped to this seven-year-low level But Cameron’s Conservative Party is deeply split on the issue, with as many as half its 330 legislators—and at least six of the 23 Cabinet ministers—in favor of leaving the EU. In a sign of the uncertainty stirred up by the EU vote, the pound dropped to a seven-year low of $1.4058 before rebounding slightly, and also sagged 0.5 percent against the euro. Bookmakers shortened the odds on a vote to leave— though betting markets stil l favor a “remain” victory.

UBS Wealth Management said on Monday it put the probability

of a British EU exit—known as “Brexit”—at 30 percent.

Simon Smith, chief economist at FxPro, said the next four months “won’t be a fun time” for the pound, which has weakened in recent months.

“It’s more the uncertainty that will weigh on the currency, rather than investors taking a view on the outcome and the implications for the economy, which are hard to argue either way,” he said.

Ma ny big businesses have warned that leaving the EU—with its open internal market of 500 million people—would hammer the British economy. But London Mayor Boris Johnson, a highprofile supporter of an “out” vote, said fears of economic catastrophe were “wildly exaggerated.”

He likened the predictions to those who had issued apocalyptic warnings that if Britain did not join the euro single currency, the City of London financial district would suffer and “great mutant rats would gnaw the faces of the last bankers.”

However, Johnson suggested his goal is to vote to leave, then reopen negotiations on better terms for remaining in the EU. “All EU history shows that they only really listen to a population when it says ‘no,’” he wrote in the Daily Telegraph.

Cameron scoffed at the notion.

Comparing the relationship with Europe to a marriage, he said: “I don’t know any [couples] who

have begun divorce proceedings in order to renew their marriage vows.” Former Conservative leader Iain Duncan Smith said on Sunday that the EU’s “open border,” and the inflow of millions of migrants from the Middle East and Africa, made it more likely terrorists could slip into the UK—though Britain is not part of the EU’s borderless Schengen zone.

But Rob Wainwright, director of the European police cooperation agency Europol, said that leaving the EU and the police cooperation capabilities it offers “would make the UK’s job harder, I think, to protect the citizens from terrorism and organized crime.”

Other European leaders have sometimes expressed annoyance at Britain’s demands, but want the UK, with its economic and diplomatic clout, to remain in the bloc.

Italian Prime Minister Matteo Renzi said on Monday that he hoped “good sense will prevail” in the British referendum.

A “ leave” vote wou ld ta ke Britain out of the EU after more than 40 years, and could lead to a breakup of the UK. Polls suggest Scottish voters, who rejected independence in a 2014 referendum, are more firmly pro-European than their English neighbors. “If we are forced out of the EU I am certain the public in Scotland will demand a [new] referendum on Scottish independence,” Scottish National Party lawmaker Angus Robertson said. AP

ASHINGTON—Sea levels on Earth are rising several times faster than they have in the past 2,800 years and are accelerating because of man-made global warming, according to new studies.

An international team of scientists dug into two dozen locations across the globe to chart gently rising and falling seas over centuries and millennia. Until the 1880s and the world’s industrialization, the fastest seas rose was about 1 inch to 1.5 inches (3 centimeters [cm] to 4 cm) a century, plus or minus a bit.

During that time global sea level really didn’t get much higher or lower than 3 inches (7.5 cm) above or below the 2,000-year average.

But in the 20th century the world ’s seas rose 5.5 inches (14 cm). Since 1993 the rate has soared to a foot per century (30 cm). And two different studies published on Monday in the journal Proceedings of the National Academy of Sciences, said by 2100 that the world ’s oceans will rise between 11 inches to 52 inches, depending on how muc h he at - t r ap pi ng gas Earth ’s industries and vehicles expel.

“There’s no question that the 20th century is the fastest,” said Rutgers Earth and Planetary Sciences Prof. Bob Kopp, lead author of the study that looked back at sea levels over the past three millennia.

“It’s because of the temperature increase in the 20th century which has been driven by fossil fuel use.”

To figure out past sea levels and rates of rise and fall, scientists engaged in a “geological detective story,” said study coauthor Ben Horton, a Rutgers marine scientist.

They went around the world looking at salt marshes and other coastal locations and used different clues to figure out what the sea level was at different times. They used single cell organisms that are sensitive to salinity, mangroves, coral, sediments and other clues in cores, Horton said. On top of that, they checked their figures by easy markers—such as the rise of lead with the start of the industrial age and isotopes only

seen in the atomic age.

When Kopp and colleagues charted the sea-level rise over the centuries—they went back 3,000 years, but aren’t confident in the most distant 200 years—they saw Earth’s sea level was on a downward trend until the industrial age.

Sea-level rise in the 20th century is mostly man-made, the study authors said. A separate, not-yet-published study by Kopp and others found since 1950, says about two-thirds of the US nuisance coastal f loods in 27 locales have the fingerprints of man-made warming.

And if seas continue to rise, as projected, another 18 inches (46 cm) of sealevel rise is going to cause lots of problems a nd e xpense, especially with surge during storms, said study coauthor Stefan Rahmstorf of the Potsdam Institute for Climate Impact Research in Germany. “There is such a tight relationship between sea level and temperature,” Horton said. “I wish there wasn’t, then we wouldn’t be as worried.”

The link to temperature is basic science, the study’s authors said. Warm water expands. Cold water contracts.

T he scientists pointed to specific past eras when temperatures and sea rose and fell together. The Kopp study and a separate one published by another team projected future sea-level rise based on various techniques. They came to the same general estimates, despite using different methods, said Anders Levermann, a coauthor of the second paper and a researcher at the Potsdam Institute.

If greenhouse-gas pollution continues at the current pace, both studies project increases of about 22 inches to 52 inches (57 cm to 131 cm).

If countries fulfill the treaty agreed upon last year in Paris and limit further warming to another 2 degrees Fahrenheit, sea-level rise would be in the 11-inch to 22-inch (28-cm to 56-cm) range.

Jonathan Overpeck at the University of Arizona, who wasn’t part of the studies, praised them, saying they show a clear cause and effect between warming and sea-level rise. AP

Republicans who support Jeb Bush now endorse Marco Rubio

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I AMI—US Rep. Ileana Ros-Lehtinen stepped up to microphones on Monday afternoon and waved a Florida absentee ballot, still in its envelope.

Inside, she said, was the reason she and other Republicans—in Florida and across the country— were lining up to endorse Marco Rubio less than 48 hours after the South Carolina primary.

“On this ballot, there are 13 names,” the Miami Republican said. But most of them aren’t candidates any more—including her first choice, Jeb Bush, who quit the race on Saturday and left his supporters up for grabs three weeks before Florida’s March 15 primar y. W hich means there is no time to waste for Bush backers to brush off the defeat and urge voters— especially the ones with bal-

lots already in hand—to make new choices. And, increasingly for the mainstream Republican Party, the choice is Rubio.

“He’s ready, he’s effective, he’s brilliant,” said Rep. Mario DiazBalart, Republican-Florida. “He illustrates the best of the American dream, and he will unify and strengthen this country.”

A t le a s t 20 F lor id a s t at e House Republicans who suppor ted Bush, led by Spea ker Steve Crisafulli and his likely successor, Rep. Richard Corcoran, w ill sw itch to Rubio on Tuesday. That includes the entire Miami-Dade County legislative delegation. “ The prudent thing to do is to support our senator, our hometown guy, but it comes with a heavy heart,” said state Rep. Jose Oliva, who was among the Miami delegation members who campaigned for Bush in

New Hampshire. “I’m terribly disappointed. I felt Governor Bush was head and shoulders the most qualified for that job. It’s still amazing to me that we have someone like Governor Bush out of the conversation.”

Rubio’s campaign announced nine big-name political endorsements on Monday besides the ones in Miami, in an effort to consolid ate the par t y before f ront - r u n ner Don a ld Tr u mp amasses an insurmountable lead for the nomination. The names include three US senators, a former governor and five congressmen, including two from Florida, Reps. Gus Bilirakis and Jeff Miller. “If these politicians couldn’t help Jeb overcome the Tr ump machine, what makes them think they can help put Rubio—who lost ever y single delegate in South Carolina to

Trump—over the top?” Florida Democratic Party Chairman Allison Tant said in a statement.

Endorsements certainly don’t guarantee votes (except, perhaps, when they come from a popular sitting governor three days before a close primary, as when Nikki Haley picked Rubio in South Carolina). But they indicate to financial donors there’s growing support for a candidate they may want to bet on. That’s the behind-the-scenes race Rubio is trying to win to keep up with better-funded opponents like Sen. Ted Cruz of Texas. The Rubio campaign said several Bush fundraisers had already joined the effort. It’s by no means certain that all Bush people will go to Rubio: Former Pennsylvania Gov. Tom Ridge moved to Ohio Gov. John Kasich ’s campaign, for example. Kasich’s campaign

announced other endorsements in what felt like the first day of a Rubio-Kasich rivalry.

The more endorsements Rubio picks up, the harder it will be for him to make the case that he’s not the party’s establishment figure in the race—giving Cruz and Trump ammunition against him.

A TV ad for Rubio in South Carolina noted that he had taken on the establishment and won by running against Florida Gov. Charlie Crist for Senate in 2010.

In a show of unity, US Rep. Carlos Curbelo, Lincoln DiazBalart and Lieana Ros-Lehtinen stood Monday with Lt. Gov. Carlos Lopez-Cantera, a Rubio supporter. But they still took a few moments to mourn Bush ’s c a mp a i g n . T h e y s a i d R u b i o wasn’t their consolation candidate, saying that their initial loyalty was with Bush because

of their longer relationship with him. Bush built the modern Miami-Dade Republican Party and helped Ros-Lehtinen launch her political career. “ We had a n abu nd a nce of r iches, an embar rassment of riches. We had two wonderful friends,” Ros-Lehtinen said. “Politics is what it is. People get weeded out.” None of Bush’s friends had spoken to the former Florida governor after his concession.

Diaz-Balart, who also endorsed Rubio, said he had sent Bush an e-mail. “We love him,” RosLehtinen said. “We think that he was ready to be president from Day One.” Rubio, she said, would bring “new voters, new voices” to the Republican Party.

The politicians denied that their quick turnaround to Rubio was intended to pressure Bush into backing his fellow Miamian. TNS

World

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news@businessmirror.com.ph | Wednesday, February 24, 2016

A7

Tensions rising on DMZ, N. Korean officer says

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ANMUNJOM, North Korea— Tensions have increased significantly along the Demilitarized Zone (DMZ) since North Korea’s recent nuclear test and rocket launch, a North Korean military official told The Associated Press on Monday, adding that, while he could not comment on operational details, “the reality is that it is touch and go.”

Though parts of the world’s most fortified border can seem like a tourist trap, drawing throngs of camera-happy visitors on both sides every year, to the militarytrained eye the Cold War-style standoff along the 257-kilometer DMZ—established when the 1950 to 1953 Korean War ended in an armistice, not a peace treaty—is an incident waiting to happen.

That’s now truer than ever, the North Korean officer said, as tensions are escalating between Pyongyang, Seoul and Washington. Thousands of US troops are deployed in South Korea and units based around the DMZ have the motto “Be Ready to Fight Tonight.”

“People come here and they think it’s like a resort. But if you know it better, you know how dangerous it is,” Lt. Col. Nam Dong Ho of the North Korean People’s Army said in Panmunjom, the truce village where the armistice was signed. Nam said tensions have increased significantly since the nuclear test in January and rocket launch earlier this month.

“Something could happen at any time,” he said. To stand on the North Korean side of the DMZ is almost otherworldly.

After crossing through military checkpoints and passing roadside concrete structures rigged to detonate and keep any vehicles from passing—defenses that are also common in the South—the air is peaceful and fresh, and birds can be heard chirping as they fly over a carefully manicured landscape dotted with rock monuments and meticulously maintained historical buildings. But closer to the Demarcation Line that marks the actual border, soldiers stand rigidly on guard, armed and intimidating, often just a few steps away from their South Korean counterparts.

On Monday the surreal feeling at the Demarcation Line was heightened by the absence of anyone— soldiers or civilians—visible on the South’s side.

South Korea halted tours to its side of the DMZ the day after the January 6 nuclear test, when it also announced it would

NORTH Korean People’s Army Lt. Col. Nam Dong Ho is silhouetted against the truce village of Panmunjom at the Demilitarized Zone, which separates the two Koreas, on Monday in Panmunjom, North Korea. AP/WONG MAYE-E

resume cross-border propaganda broadcasts, which have in the past brought strong recriminations from North Korea. The tours have gradually resumed. A popular observatory where people can catch a glimpse into the North via binoculars was set to reopen on Tuesday.

Along with restarting the broadcasts, South Korean President Park Geun-hye responded to the North’s nuclear test and launch by shutting down a joint industrial park in Kaesong, a city just north

UN panel approves temporary ban of battery shipments on airliners

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ASHINGTON—A United Nations panel approved on Monday a temporary ban on cargo sh ipme nt s of re c h a rge a ble lithium batteries on passenger planes because they can create intense fires capable of destroying an aircraft.

The decision by the Montreal-based International Civil Aviation Organization’s (Icao) top-level governing council isn’t binding, but most countries follow the agency’s standards. The ban is effective on April 1.

“This interim prohibition will continue to be in force as separate work continues through Icao on a new lithium battery packaging performance standard, currently expected by 2018,” said Olumuyiwa Benard Aliu, the Icao council ’s president. Namrata Kolachalam, a Transportation Department spokesman, called the ban “a necessary action to protect passengers, crews and aircraft from the current risk to aviation safety.”

Lithium-ion batteries are used in a vast array of products from cell phones and laptops to some electric cars. About 5.4 billion lithium-ion cells were manufactured worldwide in 2014.

A battery is made up of two or more cells. A majority of batteries are transported on cargo ships, but about 30 percent are shipped by air.

Airlines flying to and from the US that accept lithiumbatter y shipments carr y 26 million passengers a year, the Federal Aviation Administration (FA A) estimates. The Rechargeable Battery Association (RBA), which opposed the ban, said in a statement that the industry is preparing to comply with the ban, but there may

be “significant disruption in the logistics supply chain,” especially for batteries used in medical devices. Aviation authorities have long known that the batteries can self-ignite, creating fires that are hotter than 593 degrees Celsius.

That’s near the melting point of aluminum, which is used in aircraft construction.

Safety concerns increased after FAA tests showed gases emitted by overheated batteries can build up in cargo containers, leading to explosions capable of disabling aircraft fire-suppression systems and allowing fires to rage unchecked. As a result of the tests, an organization representing aircraft manufacturers—including the world’s two largest, Boeing and Airbus—said last year that airliners aren’t designed to withstand lithiumbattery fires and that continuing to accept battery shipments is “an unacceptable risk.”

More than other types of batteries, li-ion batteries are susceptible to short-circuit if they are damaged, exposed to extreme temperatures, overcharged, packed too close together or contain manufacturing defects.

When they short-circuit, the batteries can experience uncontrolled temperature increases known as “thermal runaway.”

That, in turn, can spread shortcircuiting to nearby batteries until an entire shipment is overheating and emitting explosive gases.

It’s not unusual for tens of thousands of batteries to be shipped in a single cargo container. Three cargo jets have been destroyed and four pilots killed in in-flight fires since 2006 that accident investigators say were either started by batteries or made more severe

by their proximity. The International Federation of Air Line Pilots Associations lobbied the Icao council unsuccessfully to extend the ban to cargo carriers.

“This has been a long time coming, and is justified by the risk these batteries pose in transportation,” said Mark Rogers of the Air Line Pilots Association in North America. “We now call on Icao to recognize that the same risk is present on cargo aircraft and to extend the prohibition to all aircraft, until safe methods of transport can be implemented.”

Besides the ban on shipments on passenger planes, the Icao also approved a requirement that batteries shipped on cargo planes be no more than 30-percent charged, and imposed new limits on small packages of batteries.

Dozens of airlines have already voluntarily stopped accepting battery shipments, but others oppose a ban. KLM, the Dutch airline, made a presentation to a lower-level Icao panel arguing against a ban, according to an aviation official familiar with the presentation. KLM and Air France are owned by a FrancoDutch holding company.

Representatives from the Netherlands and France on the dangerous goods panel voted last fall against a ban. The official wasn’t authorized to speak publicly and spoke on the condition that he not be named. KLM officials didn’t respond to requests for comment. The battery industry and manufacturers of consumer electronics that rely on the batteries also opposed the ban. The ban doesn’t apply to batteries packaged inside equipment like a laptop with a battery inside, for example.

Battery industry officials had no immediate comment. AP

of the DMZ, and telling the South Korean National Assembly that if North Korean leader Kim Jong Un doesn’t change his ways his regime will surely collapse—predictably outraging the North.

North Korea reacted by putting the industrial park under military control, cutting off emergency hotlines with Seoul and—through its state-run media—accusing Park of being a traitor and a “senile granny.”

“I don’t even want to utter her name,” Nam said. “I’m just a soldier so I don’t know how the situation has

changed. But as the Kaesong industrial zone has been totally closed by South Korea, our people and army are getting more enraged.”

Nam said the broadcasts cannot be heard in Panmunjom during the day, which he suggested was because the South doesn’t want them to be heard by South Korean tourists. “But when it’s quiet, late at night, you can hear them here,” he said. North Korea says it is developing nuclear weapons for self-defense and has the sovereign right to launch sat-

ellites as part of a peaceful space program. But both are generally seen as violating longstanding United Nations resolutions.

The UN Security Council is still discussing its response, but the US, Japan and South Korea have already announced new sanctions on the already-heavily sanctioned North.

The standoff is likely to get worse before it gets better.

Keeping its own military profile high, the US flew four stealth F-22 fighter jets over South Korea and reaffirmed it maintains an “ironclad commitment” to the defense of its ally after the rocket launch.

Last month it sent a nuclear-capable B-52 bomber over South Korea following the North’s nuclear test. South Korea and the US are expected to hold large-scale war games next month.

South Korea’s defense minister has said about 15,000 US troops will take part in the annual exercises, double the number Washington normally sends.

The two countries have also begun preparatory talks to deploy a Terminal High-Altitude Area Defense antimissile system in South Korea. That is strongly opposed by neighboring powers China and Russia, since the radar would allow Washington to reach well into their territory, as well. Nam, the North Korean officer, said he remains focused on his duties. But he added that, now that North Korea says it has an H-bomb—a claim disputed by some outside experts—the US might be better advised to focus on negotiating a peace treaty to formally end the Korean War. “On the international stage, the US talks about peace,” he said. “But it should not interfere in the affairs of other countries.” AP

A8 Wednesday, February 24, 2016

The World BusinessMirror

US, Russia agree on Syria cease-fire; questions remain

SYRIAN women shop at the popular Hamidiyeh old market in Damascus, Syria, on February 21. AP/HASSAN AMMAR

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AMASCUS, Syria—The United States and Russia have agreed on a new cease-fire for Syria that will take effect on Saturday, even as major questions over enforcing and responding to violations of the truce were left unresolved.

Syria’s warring government and rebels still need to accept the deal.

The timeline for a hoped-for breakthrough comes after the former Cold War foes, backing opposing sides in the conflict, said they finalized the details of a “cessation of hostilities” between President Bashar al-Assad’s government and armed opposition groups after five years of violence that has killed more than 250,000 people.

The truce will not cover the Islamic State (IS) group, the al-Qaeda-linked Nusra Front and any other militias designated as terrorist organizations by the UN Security Council. But where in Syria the fighting must stop and where counterterrorism operations can continue must still be addressed. And the five-page plan released by the US State Department leaves open how breaches of the cease-fire will be identified or punished.

The announcement came after Presidents Barack Obama and Vladimir Putin spoke by telephone on Monday, capping weeks of intense diplomacy to stem the violence so that Assad’s government and “moderate” rebel forces might return to peace talks in Geneva. A first round of indirect discussions collapsed almost immediately this month amid a massive government offensive backed by Russian air strikes in northern Syria.

Obama welcomed the agreement in the call with Putin, which the White House said was arranged at Russia’s request. The White House said Obama emphasized that the key is to ensure that Syria’s government and opposition groups faithfully implement the deal.

“This is going to be difficult to implement,” White House Spokesman Josh Earnest said. “We know there

are a lot of obstacles and there are sure to be some setbacks.”

Putin called the agreement a “last real chance to put an end to the many years of bloodshed and violence.”

Speaking on Russian television, he said Moscow would work with the Syrian government, and expects Washington to do the same with the opposition groups that it supports.

UN Secretary-General Ban Kimoon also welcomed the agreement, calling it “a long-awaited signal of hope to the Syrian people.” But he warned that much work lies ahead for its implementation.

Hours after the agreement was announced, Assad issued a decree setting parliamentary elections for April 13. A UN Security Council resolution adopted last December calls for parliamentary and presidential elections to be held during an 18-month transition period that would end the five-year-old conflict in Syria.

However, the country was due for parliament elections anyway, as the current parliament’s four-year term expires in May. The leader of a Saudi-backed Syrian opposition alliance, meanwhile, said in a statement that rebel factions had agreed “in principle” to an internationally mediated temporary truce. Riad Hijab did not elaborate but urged Russia, Iran and the Assad government to end attacks, lift blockades and release prisoners held in Syria.

Syrian officials said the government was ready to take part in a truce as long as it is not used by militants to reinforce their positions.

Both sides have until Friday to formally accept the plan.

Even if the cease-fire takes hold, fighting will by no means halt.

Russia will surely press on with an air campaign that it insists is tar-

geting terrorists, but which the US and its partners say is mainly killing moderate rebels and civilians.

While IS tries to expand its selfproclaimed caliphate in Syria and neighboring Iraq, Nusra is unlikely to end its effort to overthrow Assad.

The Kurds have been fighting IS, even as they face attacks from America’s North Atlantic Treaty Organization ally, Turkey. And Assad has his own history of broken promises when it comes to military action.

All of these dynamics make the truce hard to maintain.

“We are all aware of the significant challenges ahead,” US Secretary of State John Kerry said. “Over the coming days, we will be working to secure commitments from key parties that they will abide by the terms.”

Kerry said the cessation could lead to less violence, expanded humanitarian deliveries and help support the US goal of a “political transition to a government that is responsive to the desires of the Syrian people.” Like previous US-Russian statements, however, Monday’s document says nothing about Assad’s future—perhaps the biggest stumbling block to a sustained peace.

The plan largely follows the blueprint set by Washington, Moscow and 15 other countries at a conference in Germany earlier this month. That agreement called for a truce by February 19, a deadline that was missed.

Beyond the new cease-fire date, the agreement sets up a “communications hotline” and, if needed, a working group to promote and monitor the truce. Violations are to be addressed by the working group with an eye toward restoring compliance and cooling tensions. The deal also calls for “non-forcible means” to be exhausted before other means are pursued for punishing transgressors.

Any party can report violations to the working group being co-chaired by the US and Russia.

The two countries also will share “pertinent information” about territory held by rebels accepting the truce.

Russia has pushed for broad coordination. Putin apparently hopes that engaging the US in military-tomilitary cooperation in Syria could help ease the strain in relations and also cast Moscow, as a power equaling Washington.

The timing of the cease-fire is only days ahead of Moscow’s proposal earlier this month for it to start on March 1. Washington rejected that

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Pages of cease-fire plan offer at the time, saying it wanted an “immediate cease-fire” and not one that would allow Syria and its Russian backer to make a last-ditch effort for territorial gains in the Arab country’s north and south.

While negotiations dragged, however, Russian air strikes pummeled areas in and around Aleppo, Syria’slargest city, and Assad’s military made significant gains.

Inside the Hamidiyeh Souk, a popular Damascus bazaar, people expressed worries that a cease-fire wouldn’t be evenly observed, leaving Syrian authorities vulnerable.

“I hope there will be no cease-fire, because if there is a cease-fire, Turks will increase their support for criminals and traitors,” said Ahmad alOmar, who is from Aleppo province in the north, adding that Turkey may let opposition fighters in through its border with Syria. The Associated Press reported from the bazaar on a government-approved visit.

But rebels who engage in violence could see their Western support cut off. In recent days, US officials have spoken about the cease-fire being a “self-policing” mechanism. If a group fights Assad’s military, according to this logic, it essentially aligns itself with militants considered to be terrorists and can then be attacked.

That has the opposition concerned about Assad or Russia trying to provoke it into acts of self-defense.

The conflict began with violent government repression of largely peaceful protests in 2011 but quickly became a full-blown rebellion against Assad and a proxy battle between his Shiite-backed government and Sunnisupported rebels. A US-led coalition is only attacking the IS and other extremist groups, not Assad’s military.

The Syrian government’s supply route by land to the city of Aleppo was cut by heavy fighting on Monday as the army, supported by allied militias and the Russian air force, fought to consolidate its recent gains. They are trying to seal the border with Turkey, a key supporter of the rebels, before a truce is reached. AP

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

PENTAGON’S GUANTÁNAMO PLAN LAYS OUT COSTS, SAVINGS

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ASHINGTON—US officials say the Pentagon’s long-awaited plan to shut down the detention center at Guantánamo Bay, Cuba, and transfer the remaining detainees to a facility in the US calls for up to $475 million in construction costs, but would save as much as $180 million per year in operating costs.

The plan, which will be delivered to Congress on Tuesday, is the administration’s last-ditch effort to make good on President Barack Obama’s campaign vow to close Guantánamo and convince lawmakers to allow the Defense Department to move nearly 60 detainees to the US. But the plan provides few details, and may only further antagonize members of Congress who have repeatedly passed legislation banning any effort to move detainees to the US. Rep. Mac Thornberry, RepublicanTexas, chairman of House Armed Services Committee, has said that his panel would hold a hearing on a closure plan. But he sent a letter to Obama warning that Congress has made clear what details must be included in any plan and that anything less than that would be unacceptable.

The US officials say the plan considers 13 different locations in the US, including seven existing prison facilities in Colorado, South Carolina and Kansas, as well as six other locations on current military bases. They say the plan does not recommend a preferred site and the cost estimates are meant to provide a starting point for a conversation with Congress.

More detailed spending figures, which are considered classified, will be provided to Congress, said the officials, who were not authorized to discuss the plan publicly ahead of its release, so spoke on condition of anonymity.

The seven facilities reviewed by a Pentagon assessment team last year were: The US Disciplinary Barracks and Midwest Joint Regional Corrections Facility at Leavenworth, Kansas; the Consolidated Naval Brig, Charleston, South Carolina; the Federal Correctional Complex, which includes the medium, maximum and supermax facilities in Florence, Colorado; and the Colorado State Penitentiary II in Canon City, Colorado, also known as the Centennial Correctional Facility.

According to the officials, the US facilities would cost between $265 million and $305 million to operate each year. The annual operating cost for Guantánamo is $445 million, but the officials said the Cuba detention center will need about $225 million in repairs and construction costs if it continues to be used.

They said it will cost between $290 million and $475 million for construction at the various US sites, depending on the location. Some of the more expensive sites are on the military bases, which would need more construction. Because of the annual operating savings, the officials said the

US would make up the initial construction costs in three to five years.

Late last year other US officials said that the assessments done by the Pentagon team suggested that the Centennial Correctional Facility in Colorado is a more suitable site to send detainees whom officials believe should never be released.

Those officials were not authorized to discuss that matter publicly, so spoke on condition of anonymity.

Members of Congress have been demanding the Guantánamo plan for months, and those representing South Carolina, Kansas and Colorado have voiced opposition to housing the detainees in their states.

The administration is currently prohibited by law from moving Guantánamo Bay detainees to the US. The long-running dispute has taken on added intensity now because the White House has launched a final push to close the prison before Obama leaves office. Advocates of closing Guantánamo say the prison has long been a recruiting tool for militant groups and that holding extremists suspected of terror acts indefinitely without charges or trial sparks anger and dismay among US allies.

Opponents, however, say that changing the detention center’s ZIP code won’t solve those problems. And they warn that moving al-Qaeda-linked detainees to the US could create security concerns around the new location.

There are currently 91 detainees at Guantánamo Bay. Of those, 35 are expected to be transferred out by this summer.

The rest are either facing trial by military commission, or have been determined to be too dangerous to release but are not facing charges. Some can’t be charged because of insufficient evidence and some may face future prosecution, or have been designated for indefinite detention under the international laws of war.

Seven detainees are in the early stages of trial by military commission, including the five men accused of planning and aiding the September 11 terrorist attack, and three have been convicted and are serving sentences.

At its peak in 2003, Guantánamo held nearly 680 detainees, and there were about 245 when Obama took office.

“We’ve always been very clear about what needs to happen,” said Navy Capt.

Jeff Davis, a Pentagon spokesman. “We’re going to continue to transfer detainees to other countries who agree to take them, and take steps to make sure that... the threat they pose to the US is limited.

Second, that we’ll continue to prosecute those that can be prosecuted.

And third, that there’s this small group of individuals that can neither be safely transferred nor prosecuted, and it will address those three things and lay out a range of options.” AP

Cosby’s wife deposed in defamation case

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PRINGFIELD, Massachusetts—Bill Cosby’s wife, who has publicly stood by him as he faces dozens of sexual-assault allegations, was deposed on Monday in a defamation lawsuit filed against him by seven accusers and agreed to return next month to answer even more questions under oath.

The deposition, believed to be the first Camille Cosby has given since dozens of women came forward to accuse her husband of sexual assault, was given under heavy security at the Springfield Marriott hotel.

Camille Cosby and her lawyers met with lawyers for the seven women suing her husband for about seven or eight hours on Monday.

A lawyer for the women, Joseph Cammarata, said she spent about two-anda-half hours answering questions and the rest of the time was a back and forth between lawyers on what she could or should answer. He said a judge had to be contacted twice.

Cammarata wouldn’t characterize his questions to Camille Cosby, but he said she was in a unique position to know a lot about Bill Cosby because she has been married to him for 52 years and has been his business manager.

“She’s his wife,” he said. “She has the ability to live with him, be with him ... understand who he associates with.”

When asked afterward about her demeanor under questioning, he replied, “She was someone that was reserved, and I got the sense she really didn’t want to be there.”

Her lawyers, who had tried to block the deposition, had no comment. She contin-

ues the deposition on March 14, but the location hasn’t been determined.

After numerous women went public with sexual-assault allegations against Bill Cosby, Camille Cosby issued a supportive statement, calling him “a kind man, a generous man, a funny man, and a wonderful husband, father and friend.”

“He is the man you thought you knew,” she said in December 2014.

She also suggested that her husband, not the women, was the party being harmed.

“None of us will ever want to be in the position of attacking a victim,” she said.

“But the question should be asked—who is the victim?”

The women alleged Bill Cosby defamed them by branding them liars after they went public with allegations of sexual assault.

Lawyers for Bill Cosby, 78, and Camille Cosby, 71, have argued that she does not have any information on the accuracy of the women’s claims and that her conversations with him are confidential under the state marital disqualification rule.

The Cosbys have a home in Shelburne Falls, about an hour’s drive from Springfield, where the lawsuit, seeking unspecified damages, was filed. They have four children; a fifth died.

The plaintiffs in the defamation case are among about 50 who have accused Bill Cosby of sexual misconduct.

In December, Bill Cosby, who played Dr. Cliff Huxtable on The Cosby Show from 1984 to 1992, was charged in Pennsylvania with drugging and sexually assaulting a former Temple University employee at his suburban Philadelphia home in 2004. AP

The World BusinessMirror

news@businessmirror.com.ph

briefs

GERMANY: HIGHEST SURPLUS SINCE REUNIFICATION IN 2015 BERLIN—Germany’s statistics office says the country last year achieved its highest budget surplus since reunification a quarter-century ago.

The Federal Statistical Office said on Tuesday that federal, state and local governments last year accumulated a surplus totaling €19.4 billion ($21.5 billion)—up from €8.9 billion the previous year. That beat the previous record of some €18.2 billion from 2000.

Last year’s surplus amounted to 0.6 percent of GDP, double the previous year’s 0.3 percent.

The German economy, Europe’s biggest, grew by 1.7 percent last year and is expected to repeat that performance this year. The economy’s solid performance has boosted the government’s tax income and allowed it to run a surplus at a time when other countries in Europe have sizeable deficits. AP

Editor: Lyn Resurreccion • Wednesday, February 24 2016

US-Brazil teams probe link between Zika, microcephaly W

TOP U.S., CHINA DIPLOMATS MEET

MIGRANTS EXPELLED FROM GREECE

IDOMENI, Greece—Police have removed hundreds of migrants from a camp at Greece’s border with Macedonia following a protest that halted freight-rail services to other Balkan countries.

Authorities said the mostly Afghan migrants were being put on buses bound for Athens, in the south of the country, after the police operation started early on Tuesday. Journalists were not allowed to approach the area.

Macedonia at the weekend began stopping Afghan migrants at the border, and slowing the rate at which asylumseekers from Syria and Iraq were allowed to cross the border—leaving thousands stranded in Greece, where an average of 4,000 migrants and refugees each day.

Greece has strongly criticized Austria’s decision last week to cap the daily number of asylum applications and migrants crossing the country. AP

DAMAGE TO INDIA CANAL SHOWS DELHI WATER VULNERABILITY NEW DELHI—Officials say the water supply to New Delhi’s 18 million residents will be limited until engineers can fully repair a canal link that was broken during protests in a neighboring state.

Delhi Water Minister Kapil Mishra said partial water supplies have been restored in the northern and central parts of the Indian capital, and will hopefully reach western Delhi by Tuesday evening.

In the meantime, he says 70 water tankers have been sent to western neighborhoods with rations.

The destruction of the Munak canal link by protesters over the weekend in Haryana state has highlighted New Delhi’s extreme water vulnerability.

The canal, which channels water from north Indian rivers, accounts for about 60 percent of New Delhi’s water supply. AP

FRENCH PRESIDENT: NUCLEAR TESTS IMPACTED ENVIRONMENT

PARIS—French President François Hollande has acknowledged that nuclear weapons tests carried out in French territories in the South Pacific had consequences for the environment and the health of residents.

Hollande, visiting French Polynesia, praised the region's contribution to France's role as one of the world's few nuclear powers. His remarks were aired on French television on Tuesday. AP

A MUNICIPAL health worker sprays insecticide in a junk yard to combat the Aedes aegypti mosquito that transmits the Zika virus in Joao Pessoa, Brazil, on Monday. A 16-member team of the United States’s Centers for Disease Control and Prevention is starting work on a “case-control” study aimed at determining whether the Zika virus really does cause babies to be born with the devastating birth defect microcephaly as Brazilian researchers strongly suspect. AP/ANDRE PENNER

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OAO PESSAO, Brazil—Joint teams of US and Brazilian health workers were set to fan out across one of Brazil’s poorest states on Tuesday in search of mothers and infants for a study aimed at determining whether the Zika virus is causing babies to be born with unusually small heads.

Brazil’s Health Minister Marcelo Castro says he is “absolutely sure” mosquito-borne Zika is responsible for a spike in cases of the rare birth defect microcephaly, which sees babies born with small heads and brains, and can cause severe developmental problems. But with scant scientific literature published on the matter, some doctors in Brazil and elsewhere say there is not yet enough scientific data to prove the connection.

Jointly run by the Brazil’s Health Ministry and the US Centers for Disease Control and Prevention (CDC), the study is intended to fill that vacuum by comparing babies with microcephaly and their mothers to babies without the condition.

The popular “understanding is that Zika virus [is behind the microcephaly spike]. How much of that is Zika virus is really one of the important goals of this study,” said Erin Staples, a Colorado-based epidemiologist who heads the CDC contingent in Paraiba state. “I do believe there is

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Teams of US and Brazil health workers to go around Brazil something occurring that is unique and knowable, but we really need to understand better, mostly, so we can prevent this from happening to other generations.”

Eight teams made up of one CDC staffer and three Brazilian health workers will knock on the doors of several hundred randomly selected families with infants throughout Paraiba, a northeastern coastal state that is one of Brazil’s least developed.

The teams hope to recruit at least 130 babies with microcephaly and their mothers and two to three

times that number of mothers and babies without the condition, all born in the same areas and at around the same time.

The researchers will take blood samples from mothers and babies that will be sent to labs in Brazil and the US to test for Zika and dengue, a similar virus also transmitted by the Aedes aegypti mosquito. The idea is to determine whether mothers whose babies have microcephaly were infected with Zika and, if so, when during their pregnancies.

Teams will also be on the lookout for other factors that, possibly in conjunction with Zika, could be behind Brazil’s increase in microcephaly, such as a prior infection with dengue, toxoplasmosis or the ingestion of toxins.

“If we can provide some basic information or show a potential association, that will allow us another avenue of how do we prevent this and what do we need to do next,” Staples said.

The recruitment process is expected to take four to five weeks, but the timetable will largely depend on how receptive potential subjects are.

At a training session on Monday in the state capital of Joao Pessoa, the field teams rehearsed how they will reach out to families and discussed ethical concerns, including how to react to reticence from potential subjects and how many times it is OK to prick babies to try to draw blood.

The language barrier proved a stumbling block at the training session, with the Brazilians and Americans team members often resorting to pantomime as they ran through the scripts they are to recite to potential subjects in this

Portuguese-speaking nation.

Priscila Leite, who leads the Health Ministry’s contingent, said she expects recruitment numbers to be high given the level of alarm about Zika in Brazil—particularly here in the northeast, the epicenter of the country’s Zika and microcephaly outbreaks.

“There is a lot of anxiety out there, and people really want to understand what’s going on,” she said.

In Paraiba alone, 56 cases of microcephaly have been confirmed since October and 423 suspected cases are under investigation, the Health Ministry says. In previous years, Brazil tended to average around 150 cases nationwide.

Skeptics have said microcephaly cases may have been greatly underreported in Brazil in the past because local health officials weren’t required to notify the Health Ministry about cases of the condition until November. They also note the microcephaly spike appears to be largely restricted to Brazil, with few cases reported in other countries with Zika outbreaks, such as neighboring Colombia.

But Staples said she tended to lean toward the Health Ministry’s view.

“I come from a pediatric infectious-disease background and am also a mom, so looking at these children clinically, they were distinct from other congenital infections I’ve seen,” said Staples, who spent time in Brazil recently as part of a World Health Organization mission. “The scope and the size of the children who were presenting [microcephaly] at the same time, really made it apparent to me that there was something unique happening in this situation.” AP

Obama remains ‘optimistic’ on Pacific Rim trade deal

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ASHINGTON—President Barack Obama told Republican governors on Monday that he remains “cautiously optimistic” that Congress will approve a sweeping trade deal with 11 Pacific Rim nations this year.

“The presidential campaigns have created some noise” about the Trans-Pacific Partnership, Obama said during a question-and-answer session with governors of both parties, meeting in Washington for an annual conference of the National Governors Association.

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Labor unions, he acknowledged, are “not happy with me. They’re adamant in their opposition.”

The trade agreement, which would lower tariffs between nations that collectively produce about 40 percent of global commerce, including Japan, Canada and Mexico, is opposed by much of Obama’s own party. He is counting on Republican congressional leaders to round up enough votes to pass the pact, a cornerstone of the agenda for his last year in office.

“I am cautiously optimistic that we can

still get it done,” Obama said. The deal was signed on February 4 in New Zealand.

House Speaker Paul Ryan, a Wisconsin Republican, and Senate Majority Leader Mitch McConnell, a Kentucky Republican, have concerns “on the margins” of the deal, Obama said. Ryan told reporters on February 11 that he didn’t think the trade agreement had enough support in Congress to pass. Both Donald Trump, the front-runner for the Republican presidential nomination, and Hillary Clinton, the Democratic front-runner, have said they oppose the

trade deal as it’s currently written.

The group of governors at the White House included the chief executives of several states that are suing the Obama administration over executive actions to protect more than 5 million undocumented immigrants from deportation and to require states to use less coal for power production. Both plans have been blocked by courts while they are litigated.

Obama warned the governors that “states with extractive industries” should be preparing for a future economy that is

less dependent on fossil fuels.

He told Maryland Gov. Larry Hogan, a Republican, that he would be happy to review federal regulations in partnership with the governor’s association.

“I do not believe in regulation for regulation’s sake,” he said. It’s not the case, he added, “that I get a kick out of big government.”

Some of the states’ cases are pending before the Supreme Court, where the vacancy created by the death of Justice Antonin Scalia could improve the administration’s chances of victory. Bloomberg News/TNS

ASHINGTON—The top diplomats of the US and China meet on Tuesday in Washington at a fraught time in relations between the two world powers.

It’s been seven weeks since North Korea conducted a nuclear test and they still haven’t agreed on how to censure Pyongyang.

Also, tensions are rising in the South China Sea after Beijing deployed anti-aircraft missiles on a disputed island.

Secretary of State John F. Kerry and Chinese Foreign Minister Wang Yi sparred over much of the same territory a month ago in Beijing. But as they sit down for more talks at the State Department, both situations have only grown more serious.

North Korea followed up its January 6 underground nuclear explosion with a February 7 rocket launch that was condemned by the UN Security Council because such rockets use technology that could be applied to ballistic missiles.

While China has joined in the international criticism, it has balked at imposing the kind of tough economic sanctions that the US wants, fearing it could threaten the stability of North Korea, a neighbor and traditional ally of Beijing.

In the meantime, the US has taken tougher steps of its own.

Congress passed the most stringent US sanctions, yet, that, aim to restrict North Korean leader Kim Jong Un’s access to hard currency. The restrictions could hit Chinese banks and companies that do business connected to the North’s nuclear and missile programs and its human rights abuses. President Barack Obama signed the bill into law last week.

And on the security front, the US and close ally South Korea have begun talks on deploying a missile defense system that China fears could be used against it, as well as North Korea.

The US and China are expected, eventually, to fashion a compromise over a UN resolution, as both sides oppose North Korea’s development of nuclear weapons and the missiles to deliver them.

But they appear leagues apart on the South China Sea. Washington and Beijing have been trading accusations of “militarizing” those waters, an important thoroughfare for world trade where six Asian governments have competing territorial claims.

The accusations intensified last week following reports that China had deployed anti-aircraft missiles on Woody Island in the Paracel chain, which is occupied by China, but also claimed by Taiwan and Vietnam.

The US and its Asian allies are watching now whether China puts military assets on artificial islands it has built in the Spratly island chain, further south.

The Obama administration is under congressional pressure to step up the US response. Lawmakers are expected to raise their concerns at a Senate Armed Services Committee hearing on Tuesday with the commander of US forces in the Pacific.

State Department Spokesman Mark Toner said on Monday that the US would continue to press China to stop its militarization in the South China Sea. He called for a diplomatic process to settle territorial claims peacefully.

A couple of US Navy operations close to disputed land since October have already riled Beijing.

Chinese Foreign Ministry Spokesman Hua Chunying said on Monday that “reconnaissance” by US ships and planes, not China’s actions, were responsible for stoking tensions in a region where the US is not a claimant.

“The deployment of defense facilities on China’s own territory is no different from what US does in Hawaii,” she said. AP

A10 Wednesday, February 24, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

The more difficult issues in the presidential debate

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S expected, the presidential candidates on Sunday’s debate made a lot of promises to the electorate: to strengthen public administration, to widen the reach of social services, to enforce the law equally to all without fear or favor, etc. There’s nothing wrong with these proposals, except that they all pertain to the demand side of the equation—how to spend the people’s money; not to the supply side—the generation of resources that will make the realization of the promises possible, which is the real challenge.

Why don’t we start from the proposition that the only way to improve the living standards of Filipinos, including the more than 25 million in poverty, is to raise the living standards of all? The not-so-secret formula for achieving this objective is the mobilization of investment. If domestic investment is not adequate to do the job, foreign direct investment must be brought into the picture. This should make the burden of development less crushing on us, since it will enable us to use the savings of foreigners to meet the capital requirements of our development.

Operationalizing macro level targets involves spelling out measures for the development of specific sectors, like agriculture and industry. Agriculture is a tough nut to crack. For incomes to increase in this sector, an increase in productivity must take place. But such an increase is now almost impossible to realize when farm holdings have been fragmented into miserable patches of less than 1 hectare each for every farmer-cultivator.

This is the result of land reform as demanded by the farmers themselves, and we must face up to it.

The shoe is now on the other foot—the farmers must now take the initiative of reciprocating the favor by making use of the credit facilities and technical services made available to them by legislation. They must find ways to reduce costs by organizing themselves into cooperatives and modernizing their technology by mechanization, for instance. The initiative for action now resides in them. The government must continue taking the horse to the water, but the horse must drink.

With respect to the industry sector, specifically manufacturing, the challenge is to pursue additional product lines and broaden the market. Locally designed clothes and halal products would seem to offer opportunities for new product lines. This sector must enter into the foreign markets that are now being opened by the growing integration in the Asean region.

Micro, small and medium enterprises, instead of cowering in fear of foreign competition, must link up with bigger entities to overcome their smallness and reap the benefits of access to larger markets.

Getting rid of graft and corruption, and punishing the guilty were some of the promises made in the debate. As distant as these may appear from technical issues, they may yet serve as the best instruments to transform the government into an efficient and effective machinery for the attainment of development objectives.

Why land banking is good investment Susie G. Bugante

All About Social Security

O

UR elders used to say, if you want to invest your money, buy a good piece of land. It’s tangible, it cannot be destroyed and it appreciates in value. It’s low maintenance, as well.

We hear many stories of how people with foresight became millionaires after they invested in huge tracts of land when they were dirt cheap and later on sold them for several times over their original cost. The buying of real estate and holding it for a period of time until the value has increased is what is called land banking. It is a wise strategy, especially for those who are looking for long-term investment instruments, such as what the Social Security System (SSS) does.

As of end of November 2015, SSS real-estate properties comprised 4 percent or P18.6 billion, of its total investment portfolio of P423.8 billion.

Some of these real properties were acquired as payment in kind by delinquent employers, while others were investments due to their good location and prospects for development.

According to the SSS Asset Management Department, for the year 2015, some P620 million have been generated from the lease and sale of SSS real-estate properties, such as residential and commercial lots, condominium units, buildings and parking lots, belying media reports that these assets have been idle. In fact, about 70 percent of its investment properties have been on lease and are bringing in regular income for the SSS, while the rest are either for

sale and are retained for land banking purposes.

May Catherine Ciriaco, senior vice president and officer in charge of the Lending and Asset Management Division, said part of the pension fund’s long-term strategy is the retention of select prime properties, such as the ones in Fort Bonifacio in Taguig City and in East Triangle in Quezon City, given the expected appreciation of their real-estate value.

The SSS, however, has properties scheduled for sale through bidding in 2016, including Bayview, Urdaneta, Pryce Tower-Davao, Pryce CenterMakati E. Ganzon and acquired lots in Northfields. The bidding of real properties, conducted late last year without success, will again be pursued this year. These properties consist of condominium units and parking lots in Pioneer West Highlands, Pioneer Madison Suites and Pioneer Corporate Center. Just a few days ago, the agency announced an invitation to bid in the newspapers for the sale of these properties. Hopefully, this time it will be successful.

The point being made here is that the SSS is not remiss on its duty to

Market calm may be short-lived Mohamed A. El-Erian

BLOOMBERG VIEW

L

AST week global equity investors got a much-needed reprieve from volatile, loss-inflicting markets. But rather than signaling the start of a calmer market phase, this may well prove a prelude to renewed volatility in the weeks ahead.

After ending the last trading session of the previous week with a gain, global stocks got off to a good start last Monday. US markets went on to post their best weekly performance since November, as two days of solid market rallies were followed by relatively calm consolidation. Markets in Japan and some parts of Europe did even better, registering gains of 5 percent to 7 percent.

There were four reasons for this respite from an otherwise horrid start to the year: Attempts by central bankers, especially outside the US, to reassure markets; stepped-up negotiations among oil producers aimed at stabilizing prices; the rush by European banks to avoid joining the set of unhinged market segments by coming up with measures, includ-

ing repurchases of their securities; and some, albeit limited, positive US economic news.

Yet, none of these factors serve to significantly counter, let alone overcome, three much bigger and more consequential realities.

First, corporate earnings will be further challenged by continued signs of spreading global economic weakness and a persistent inability by governments to deliver the required policy responses. Last week the Organization for Economic Cooperation and Development joined other international economic watchdogs in offering lower growth forecasts. It also noted additional risks.

Second, the continued ability of central banks to repress financial volatility is increasingly in doubt.

The institutions that are willing to

pursue such policies, particularly in China and Japan, are facing questions about their effectiveness. And more able central banks, such as the Federal Reserve, may not be as willing to do so, particularly given economic indicators suggesting that financial volatility has not contaminated economic activity and that wage and price inflation are starting to pick up.

Third, although a few days of market gains can force traders to cover their shorts, in this case, it does not seem to have triggered the return of the stabilizing role of long-term capital. Instead, it would appear from data about the flow of funds that markets still need to reprice considerably lower to find the anchoring inflow of significant patient capital.

Until these three factors change, occasional periods of market calm —and, thankfully, there will be some—are likely to prove frustratingly short. But this does not mean that investors should just reconcile themselves to passively riding rollercoaster markets that will likely create anxiety and may even force some, during large air pockets, to liquidate at the wrong time. Instead, investors would be well advised to consider adding a tactical component to their longer-term strategic and structural positioning.

manage the money of its members well. As an institution that looks at the long-term investment landscape, it sees land banking as another means to make its members’ pension fund grow. But like any prudent fund manager, it does not put all its eggs in one basket. As mentioned earlier, SSS real-estate properties consist only 4 percent of the investment portfolio.

The biggest share of the SSS investment portfolio (40 percent) goes to government securities, followed by 23 percent in private equities, 19 percent in loans to members, 6 percent in bank deposits and 8 percent in corporate notes and bonds. The average return on investment as of end of November was 6 percent, outperforming benchmarks.

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

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

Given the likelihood of a return of significant market volatility, periods of downward pressure will continue to be associated with price overshoots and undue contagion.

For investors willing to stomach lots of mark-to-market risk, these gyrations will offer an opportunity to gain exposures at attractive prices to names possessing solid economic and financial fundamentals. And during the periods of upward retracement, these same investors will have the opportunity to accumulate cash, while continuing to upgrade the quality of their holdings.

Anchored by the notion of “buy and hold,” many long-term investors will naturally resist adding a tactical component to their investment approach. But failing to do so could also cause them to risk losing sight of a larger reality that volatile markets are now signaling increasingly consistently.

The world is experiencing policy and economic realignments that undermine two notions that have served “buy and hold” investors well in the last few years: that global growth, while low, remains relatively stable; and that systemically important central banks continue to be both willing and able to repress financial volatility and boost financial asset prices.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Are Europe’s ‘zombie banks’ on the verge of a blow up?

Michael Makabenta Alunan

ON THE CONTRARY

A

FINANCIAL volcano is now building up and may blow up this year with catastrophic proportions, maybe worse than the 2008 global financial crisis, owing to a plethora of problems that are traced mainly to indebted bankrupt “zombie banks” in Europe.

Zombie banks are banks turned bankrupt during the 2008 crisis, but were bailed out by government to prevent a contagion, panic or bank run.

Edward J. Kane of Boston College coined the term in 1987, following the US savings and loans associations crisis, Bloomberg says, quoting Yalman Onaran, author of Zombie Banks: How Broken Banks and Debtor Nations Are Crippling the Global Economy.

It said “restoring these banks to health requires hundreds of billions of dollars, but letting them fester can cripple an economy for years.” The reason is that these banks no longer lend to productive businesses that bolster the real economy, but put more money into speculative hedge funds and derivatives, which got them bankrupt in the first place.

This happened to Japan with the property-market collapse in the 1990s that led to the two-decade recession.

Instead of writing off bad loans, bankrupt firms were rescued by zombie banks, which were bailed out by government, but have also caused the long-drawn stagnation.

Late last year four Italian banks collapsed, including the Banca Popolare dell’Etruria, where one of its depositors committed suicide last November, after his “life savings dissolved into thin air overnight.” About 10,000 bank depositors suffered the same fate.

Savings are supposedly insured by €100,000 per account, but because government could no longer afford a bailout, banks were forced to “shave” the savings of depositors, a scheme called a “bail-in.”

This is tantamount to qualified theft or “institutionalized robbery.” Theft happens without your knowledge; qualified theft, when stolen by someone you trust; and robbery, when forcibly taken.

Bail-in as a bank-survival strategy was started in Cyprus about three years ago, but now being replicated, even if anomalous, as governments find it cheaper and tolerable than being hostaged by the banks with ransoms of government “bailouts.”

The financial bubble is more pronounced in Europe’s PIIGS, the acronym for Portugal, Italy, Ireland, Greece and Spain, but it also affects all the Union’s 19 member-nations. Even solid Germany, which absorbed mostly Greece’s €240billion bailout in 2015, is affected, with German banks closing 1,000 branches in 2015, said Handelsblatt, a German business daily. Even Deutsche Bank, Germany’s biggest “too-big-to-fail” bank, plunged in value to €13 per share, even lower than the lowest price of €14.69 per share on January 23, 2009, at the height of the financial crisis. By now it has already lost 40 percent to 50 percent of its value since the start of the year.

Greece’s leaders initially wanted a debt condonation by 60 percent, similar to Germany’s at the end of the war in 1953, but bowed down to the troika of the International Monetary Fund, European Central Bank and the Germany-led European Union, which demanded more austerity, asset privatization and Greece’s sovereignty, as it imposed directly its diktats on Greece’s finances. While the debt debacle simmered down temporarily, Greece is burdened with more debts with deleterious effects as the bulk of the bailout money was spent to pay back old debts, and none to rebuild its economy.

Meanwhile, Wall Street’s too-bigto-fail banks face similar problems, being bailed out steadily with quantitative easings (QEs), close to zero interest rates, lower reserves, buyouts of their mortgage-backed securities, etc., like shots of adrenaline, or financial

morphine, which only made them more addicted and voracious.

While the bailouts have simmered down markets, on the contrary, they have affected “main street,” or the real economy, and triggering again the growing bubble that could be bigger than 2008. Bailouts have only meant more burdening taxes, austerity measures or cutbacks in social and economic programs. The impact is global, as many countries with huge debts with the same banks are also forced to impose austerity measures and onerous automatic debtpayment schemes.

Worse, while these zombie banks got rescued for their speculative casino gambling-like derivatives and hedge funds, on the contrary, many small banks lending to small businesses and manufacturers, who create real physical wealth in the real economy, were forced into bankruptcy. From 2007 to 2012 alone, scores of these small American banks closed shop.

While there is robust growth in the financial economy with rising QEs and banks deposits, which is perceived mistakenly as indicators of being healthy, on the contrary, bank lending to the real economy has declined or stagnated.

Money by itself, unlike physical wealth, does not have any intrinsic value. After all, the costs of producing a P20 bill or a P1,000 bill are the same, but only vary in legal tender value, as assigned.

Gambling-like speculative investments in the derivatives market have expanded at dizzying huge amounts, several times the 2008 crisis levels, not only in trillions of dollars, but now hitting over $2 quadrillion.

Thus, there are now moves in the US Congress to revive President Franklin Roosevelt’s Glass Steagal Act of 1932, which regulated and separated commercial banks from investment banks and brought stability for 65 long years. “Free-market” advocates in Wall Street, however, pushed for its deregulation and repeal in 1999 through the Gramm-Leach-Bliley Act, which resulted in booms and busts since then.

We must, therefore, brace for another financial tsunami and build more on our real economy.

Many blame China for the market instability, but even BusinessMirror’s John Mangun argues in his January 11 column that China’s slump is a major correction to its overvalued price/earnings ratio of 64, which is way above most global markets trading below 20. Even former World Bank economist and Nobel Prize winner Joseph Stiglitz believes China is not facing a “cataclysmic slowdown,” but just has problems with its “stock-market circuit breakers.”

On the contrary, the bigger problem is the monetary bubble now building up due to bank bailouts and bail-ins, amid tightening credit to the real economy that should have generated productive jobs and incomes that could boost back global demand. On the contrary, China is leading the pack in this productive direction with its Asian Investment and Infrastructure Bank (AIIB), to which the Philippines luckily joined at the last minute. The AIIB aims for massive solid development away from the speculative volatile free-market monetary system feeding the zombie banks. China is also the leader in the development-oriented BRICS coalition, led by its founders Brazil, Russia, India, China and South Africa.

What the Philippines shall do productively to survive an imminent financial crash again is, therefore, crucial.

You may reach Michael Alunan at his e-mail: mikealunan@yahoo.com.

A world-class asshole Teddy Locsin Jr.

FREE FIRE

I

T is all over the world, a Filipino can be world class—a world-class asshole. Sadly, he was once a world-class boxer, whose trademark was chivalry. But, beaten by Bradley, Marquez and the great Olympian Mayweather, Manny picked a fight with gays.

Without anyone asking his opinion—and who would?—he described same-sex marriage as “mas mah-sah-hole pah sa hayop”—(what a language!)—in short, worse than animals. But marriage of any kind is an institution, so it can only be compared to another institution, like a zoo. And believe me, on a bad day, marriage with the opposite sex feels like a zoo.

“It is just common sense,” Manny went on.

Let me stop there.

It is not common sense. In fact, same-sex animals do it. What is common sense was Mayweather’s advice to Manny: “You aren’t getting

any younger, so save your strength to fight only Mexicans. The pay-perview revenooo is bigger.”

But Manny persisted. In his only complete English sentence ever, he said, “Have you seen any animal having male-to-male or female-tofemale relations?”

Manny, I have seen worse: An animal doing it with itself—which reminds me of high school. And that is why I cannot stand dogs. They lick their own ass—and then your hand.

Cats, on the other hand, only lick fur.

I’m sure everyone’s done that, at least once in his life. If I was gay, or I had a gay son, and someone compared gays to animals, I will make his life

Wednesday, February 24, 2016 A11

a living hell. The comparison opens the door to the rooftop of buildings from which gays are thrown.

Far from being worse than animals, gays may well be better than straights. Alan Turing invented the computer that made the world of today. Hadrian pushed the Roman Empire to its widest extent.

And field marshal Von Rundestedt, master of the rear-end offensive, bloodied the Americans as he pulled out his…um…troops from the Battle of the Bulge.

“Packyoo’s” attack on gays challenges the fact that gays are equal to straight men—and vastly their superior in the case of old men hitting on young girls and old men hitting on altar boys. As for gay women, boxers, bankers and broadcasters all get it off watching two women making out with themselves. Manny’s attack is not a point of view, as Bongbong says. It is hate speech.

And it is not an exercise of religious freedom, because he does not practice a religion like Catholicism, Protestantism, Buddhism or Islam.

What he follows is a self-revealed and a self-made religion, whose ministers prey on his wallet, instead of praying

It’s the 15th century all over again B J F | Bloomberg View

Y

OU’VE heard people compare the financial crisis of 2008 and its still-lingering aftermath to the Great Depression of the 1930s. Earlier this month I suggested the Panic of 1893 as another point of comparison.

Now here’s an additional global financial crisis to consider, from Oxford University historian Peter Frankopan’s just-published The Silk Roads: A New History of the World: The crisis was caused by a series of factors that resonate 600 years later: oversaturated markets, currency devaluations and a lopsided balance of payments that went awry.

Even with the growing demand for silks and other luxury products, there was only so much that could be absorbed. It was not that appetites were sated or that tastes had changed, it was that the exchange mechanism went wrong: Europe in particular had little to give in return for the fabrics, ceramics and spices that were so highly prized. With

China effectively producing more than it could sell abroad, there were predictable consequences when the ability to keep buying goods dried up.

Frankopan is writing about the 15th-century dislocation that is now most often referred to as the “great bullion famine,” which makes it sound like they ran out of soup. It has also been called the “the economic depression of the Renaissance” and “the Great Depression of the late middle ages.”

In any case, it was bad. In Frankopan’s telling, money ran short, economies shrank, some Europeans became convinced that the world was coming to an end. And in the world’s largest economy, a bubble burst: In China, state officials were not well paid, which led to regular corruption scandals and extensive inefficiencies.

Worse, even when correctly and fairly assessed, taxpayers could not keep up with the irrational exuberance of a government that was keen to spend on grandiose schemes on the assumption that revenues would only ever rise. They didn’t.

Population decline due to

epidemics, famines and wars was one probable cause of the crisis. Global cooling from volcanic activity may have played a role, too. But it’s the bullion famine—a lack of gold and silver that meant money supply couldn’t keep up with demand—that seems to have gotten the most scholarly attention (from doubters, as well as proponents).

It’s also the element of the 15thcentury crisis that seems most relevant today. Gold and silver are no longer the basis of the money supply and central banks can, in theory, create all the money they want. But somehow or other we’ve ended up in a situation in which countries are resorting to extreme measures to get people to spend money, and global trade is sputtering as more stuff is produced than people are willing or able to buy. It feels a little like a bullion famine, even if it can’t be. Can it?

Population growth, an improving climate and relatively peaceful conditions enabled Europe to start growing out of its depression in the latter half of the 1400s. Then the

for his soul, a good friend of his said.

If UNA, in whose Senate slate he is running, does not disown Manny, then it adopts his view of gays. So I hope that beauticians bring out, instead of covering up, the ugliness of UNA’s mates.

I was not surprised when gays in showbiz gave it to him. I was surprised that some of them forgave him. And some called that limpwristed reaction civilized. I called it, as we all see it, as bakla. The Inquirer editorialized that the popular boxer might use his influence in the Senate against gays. Now, boxing can get you a belt too big to wear so you sling it over one shoulder, and that is so gay.

Ano sha, shoulder bag? Boxing can also get you money—and a tax-evasion case. And, of course, it can cost you the little brains you started out with. But it will never ever give you any influence over anything whatsoever. For that, you need Olympian skill, intellectual power, unbreakable integrity and the courage not to fight a bad war and go to jail instead, like Cassius Clay, who showed his country and the whole wide world who is the strongest one of all. Manny is no Cassius Clay.

discovery of the Americas—which, among other things, brought massive new silver supplies that put a definitive end to the bullion famine —led to a new era of prosperity and ambition for Western Europe. China, meanwhile, turned inward and began a long era of economic stagnation.

What are we to make of all this?

Not too much—we’re talking about the 15th century after all. But it is fascinating to learn that trade imbalances between China and the West have brought trouble before, and to be reminded that money-supply issues are such an enduring element of economic fluctuations. As Carmen Reinhart and Kenneth Rogoff made clear in their 2009 bestseller This Time Is Different: Eight Centuries of Financial Folly, the world has been going through these crises at least since the Middle Ages. They usually take a long time to recover from, and sometimes they presage big shifts in global economic power. Wonder what (if anything) people will be writing about today’s troubles 600 years from now.

2nd Front Page BusinessMirror

A12 Wednesday, February 24, 2016

www.businessmirror.com.ph

Marcoses resurgent as Bongbong gains in VP race

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ERDINAND “BONGBONG” MARCOS JR.’S campaign to become vice president of the Philippines is gaining momentum, through the backing of people too-young-toremember his father’s two-decade dictatorship.

Bongbong, as Marcos is known, was tied in top position with 26 percent in a February poll by the Social Weather Stations—up from just 3 percent a year ago. Growing support with voters born after the family fled to Hawaii is driving that gain ahead of the May 9 vote. His web site shows the long-serving lawmaker smiling in a crowd of dozens of young people flashing the victory sign.

“The millennials are falling into a postPeople Power state of mind, choosing to half-forget the horrors of martial law,” said Richard Javad Heydarian, an assistant professor of political science at De La Salle University in Manila, referring to the popular revolt that overthrew Marcos’s father in 1986. “With growing frustrations over the failures of post-martial law leadership, from heavy traffic to uneven development, people are embracing historical amnesia and flirting with the idea of strongman rule.”

Despite enjoying one of Southeast Asia’s fastest economic growth rates under outgoing President Aquino, the Philippines remains one of the poorest countries in the region, with development hampered by corruption that has fanned voter discontent.

While he acknowledges some of the abuses of his late father’s regime—the family is

estimated to have siphoned off as much as $10 billion in public funds—Bongbong defends gains made under military rule.

‘Say sorry’

“IF I hurt anybody, I will always say sorry, but what have I been guilty of to apologize about?” Marcos, 58, told ABS-CBN News last August. “Will I say sorry for the thousands and thousands of kilometers of roads that were built? Will I say sorry for the agricultural policy that brought us to self-sufficiency in rice? Will I say sorry for the power generation? Will I say sorry for the highest literacy rate in Asia? What am I to say sorry about?”

Seeking presidency?

WINNING the post would put him in a strong position to contest the presidency in the next election, to be held in 2022. Dynastic politics is common—almost 40 percent of Philippine legislators have links to politically connected families compared with about 6 percent in the US and 10 percent in Argentina, according to a 2012 study by authors, including Ronald Mendoza, an economics professor at the Asian Institute of Management.

Successive governments have recovered about $4 billion of the family’s ill-gotten

The millennials are falling into a post-People Power state of mind, choosing to halfforget the horrors of martial law.” —DLSU Prof. Heydarian gains. In a symbol of the dictatorship’s excesses, former First Lady Imelda Marcos left behind 3,000 pairs of shoes and a bulletproof bra when the family fled.

President Aquino, another political scion, is seeking to recover more funds before his term ends in May through an auction of more than 700 pieces of Imelda’s jewelry, with Christie’s International Plc. and Sotheby’s vying to run the sale. Mr. Aquino’s mother was the first president after the fall of Marcos and his father was an exiled opposition leader murdered by the military upon his return in 1983. Bongbong’s campaign is rattling victims of the dictatorship.

Hundreds gathered at a rally in Manila on Monday to condemn Bongbong for his defense of martial law.

‘Based on plunder’

“WE need to remind people that his father’s entire life was based on plunder,” said Marie Hilao-Enriquez, a veteran human-rights leader, whose sister was tortured and killed.

“Ferdinand Marcos’s 20-year rule has come to embody the worst excesses of tyrannical rule and people need to remember that.”

“I respect their opinion, as everyone is entitled to it,” Bongbong said in an e-mailed reply about the anti-Marcos campaign. “I have dealt with all these things, good and bad, for the past several decades, but I have work to do. I am advocating unity and that is what I will pursue if I win the election.”

For Bongbong, politics remains a family affair and he’s been central to the effort to revive the Marcos brand since winning a Senate seat in 2010. Imelda is now a representative, while sister Imee is governor of their home province of Ilocos Norte, the post Bongbong held at the time his father was toppled.

Bongbong attended the Wharton School of Business at the University of Pennsylvania in Philadelphia in the 1970s, before returning to the Philippines in 1991. He was elected representatives in 1992, before serving again as Ilocos Norte governor from 1998 to 2007. He was elected back to Congress that year, and authored a bill enacted in 2009 to define the country’s territorial holdings in the South China Sea—a major theme in the current campaign.

Voters need to look beyond Bongbong’s last name and assess Marcos in his own right, said Benito Lim, a political science professor from the Ateneo de Manila University.

“Bongbong should admit that his father did abuse human rights and had the military torture his political enemies, but it’s a bit unfair to expect him to apologize because it’s not his own doing,” he said. “He should be judged based on what he does now, because there’s no law that says the son should pay for the sins of his father.” Bloomberg News

IFC. . .

C  A

He said there are several commercial, technical, regulatory and procurement issues that need to be sorted out for the implementation of auctions in the Philippines.

“International experience may help, but each power sector is unique. There is not a single auctiondesign model. It needs to be tailored to the objectives, energy specifics and types of technologies. It is part of a learning curve,” he added.

Among others, Maurer said the CSP should be in line with the implementation of contestable markets, which make up electricity end-users who have choices in the suppliers of electricity.

When asked to comment, Energy Regulatory Commission (ERC) Commissioner Gloria Victoria Yap-Taruc said the country does have an enabling regulatory environment. “As to his comment that CSP must be tailored fit to the market, the commission is currently engaged in a working progress with respect to the guidelines of the CSP. Hopefully, in the next six months, we can come up with the guidelines.”

Though the CSP is currently enforced, the ERC has made it clear in its November 2015 resolution that a set of guidelines shall be forthcoming.

“We issued a resolution last November 2015. One of the sections stated that pending the issuance of a definitive guidelines for CSP, the DU [distribution utility] might undertake their own CSP. “We have not had a consultation regarding the CSP guidelines, but once we are able to complete it, it will be a take off from our initial work when we did our public consultations in 2013 and 2014. It will be more zeroed in on specific CSP guidelines,” Taruc said.

After the CSP guidelines are issued, Taruc said a series of public consultations would be conducted before the final guidelines are issued.