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Wednesday, March 23, 2016 Vol. 11 No. 167
COURT ORDERS NCIP TO ISSUE CERTIFICATE OF PRECONDITION TO TAN’S FIRM
CA clears MacroAsia’s Brooke’s Point project T
Even decisions of administrative HE Court of Appeals (CA) has reversed its ruling issued in April agencies which are declared ‘final’ by law 2015, denying the bid of Lucio Tan’s MacroAsia Corp. to conduct mining are not exempt from operations in an area covering 1,113.98 judicial review when so hectares in Sitio Linao, Brooke’s Point, warranted.” Palawan. —C A C A B J R. S J
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Power industry given more time to adjust to CSP
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HE implementation of the Competitive Selection Process (CSP), a policy meant to discourage negotiated powersupply contracts between a distribution utility (DU) and a power producer, has been moved to April 30 to give stakeholders more time to adjust to the new scheme. “After judicious study and due consideration of the different perspective raised, with the end view of ensuring the successful implementation of the CSP for the benefit of consumers, DUs and gencos [generation companies], the commission has resolved to allow a period of transition for the full implementation of the CSP resolution, and, as such, restates the effectivity date of the CSP resolution to a later date,” the Energy Regulatory Commission (ERC) said in its four-page Resolution 01, 2016, signed on March 15 but posted on its website late Monday. The ERC, in its Resolution 13, Series of 2015. issued last October 20, called for the mandatory implementation of the CSP in November 2015. However, the commission was swamped with requests for exemption, while others asked the ERC to defer the implementation. “We received a lot of request, because they have either completed the negotiation, signed the PSA [power-supply agreement] or are about to sign it,” the ERC spokesman, lawyer Floresinda Baldo-Digal, said in a text message, when sought to elaborate on the latest ERC Resolution 01, 2016. The latest resolution effectively moved the start of the CSP implementation to April 30. The CSP seeks to curb negotiated PSAs between a DU and a power producer. It is meant to ensure that power supply is bought and passed on to consumers at the least possible cost by bidding out the power requirements of the DU, instead of entering into a bilateral power-supply contract with a genco. S “P,” A
‘Oil to rebound even if Iran won’t freeze’ PROPERTY
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BEAR MARKET A trader indicates with his hand gesture a market slump at the Philippine Stock Exchange in Makati City on Tuesday, the penultimate trading day before the Lenten break. ALYSA SALEN
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PESO EXCHANGE RATES n US 46.4930
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HE Organization of the Pet roleu m E x por t i ng Countries (Opec) expects oil prices to rebound to a “moderate” level, even if Iran doesn’t join other producers in an agreeagree ment to freeze production. About 15 or 16 nations will attend the freeze discussions in Doha, Qatar, on April 17, Abdalla El-Badri, secretary-general of the Opec, said at a press conferconfer ence in Vienna on news. While all members of the group have been invited, not all will attend, and he didn’t know whether Iran will join in. Oil prices, which sank to a 12year low earlier this year, have climbed more than a third since an accord reached on February 16 between Opec members SauSau di Arabia, Venezuela, Qatar and non-member Russia to cap propro duction at January levels. Iranian Oil Minister Bijan Zanganeh has dismissed the proposal as “ridicu“ridicu lous,” given the nation’s plans to
boost exports after the lifting of international sanctions. “We will see who will reply and who will not reply, but I hope it will be a successful meeting,” ElBadri said at the organization’s headquarters in Vienna. Iran has some “conditions” related to its own production, and it’s up to them whether they participate in the accord, or even opt to join in at a later date, he said. The freeze talks are being organized by some Opec states, rather than the organization itself, ElBadri said. He spoke at the end of an annual dialogue with the European Union, represented by Commissioner for Climate Action and Energy Miguel Arias Canete.
Saudi Arabia
SAUDI Arabia’s oil minister Ali al-Naimi confirmed on March 17 the Kingdom will take part in the Doha talks, while people familiar with policy in Kuwait,
n JAPAN 0.4154 n UK 66.8337 n HK 5.9973 n CHINA 7.1638 n SINGAPORE 34.1860 n AUSTRALIA 35.2370 n EU 52.2674 n SAUDI ARABIA 12.3991
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Source: BSP (22 March 2016 )
A2 Wednesday, March 23, 2016
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CA clears MacroAsia’s Brooke’s Point project C A
In a 16-page amended decision penned by Associate Justice Danton Bueser, the CA’s former Special Sixteenth Division granted the motion for reconsideration filed by MacroAsia and directed the National Commission on Indigenous Peoples (NCIP) to issue the certificate of precondition in favor of the mining firm. The certificate is needed before MacroAsia could proceed with the extraction activities at Brooke’s Point. The CA held that the NCIP committed grave abuse of discretion in disregarding the recommendation. In its April 2015 decision, the CA affirmed the validity of the resolution issued by the NCIP en banc denying MacroAsia’s application for issuance of a certificate of precondition. The CA agreed with the NCIP that
Power. . .
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“The effectivity date of the CSP resolution is hereby restated to be April 30. All PSAs executed on or after the said date shall be required, without exception, to comply with the provision of the CSP resolution,” the ERC stated. PSAs that were approved by the ERC
“exploration,” and “mining operation and development” are separate activities, although related, that must undergo separate processes. The appellate court held that NCIP’s refusal to issue the certificate was justified considering the failure of MacroAsia to conduct a separate field-based investigation (FBI) prior to the extraction stage of its mining operation. But, in its decision issued on March 14, the CA reversed and set aside NCIP’s resolution, saying that it committed grave abuse of discretion in denying MacroAsia’s application for certificate of precondition. In reversing its decision, the CA agreed with the contention of MacroAsia that it has complied with all the requirements for the grant of a certificate of precondition for its Mineral Production Sharing Agreement (MPSA) application. The appellate court explained
that it was erroneous for the NCIP to ignore the recommendations of its Free and Prior Informed Consent (FPIC) Team and the Validation Team for the issuance of the certification for precondition. The reviewing teams created by the NCIP noted the overwhelming approval of the Palawan tribes and the directly affected areas of the mining operations. “A ccord i ng ly, for w a nt of substantial basis, in fact or in law, the factual findings of an administrative agency, as respondent’s en banc resolution in this case, cannot be given the stamp of finality and conclusiveness normally accorded to it, as even decisions of administrative agencies, which are declared ‘final’ by law, are not exempt from judicial review when so warranted,” the CA ruled. “For want of substantial basis, in denying petition of MacroAsia’s
application for certificate of precondition, this court opted to take a second look at the pertinent issues in the present case,” it added. The CA added that the act of NCIP of imposing another FBI at each and every stage of the mining process is tantamount to judicial legislation, considering that the law requires it to be done once. Fur ther more, the C A said denying MacroAsia’s application for certificate of precondition despite full compliance with the requirements would send a wrong signal to the investors in the extractive industry. “Such approach discourages both domestic companies and foreign entry into large-scale exploration, development and utilization activities; and results in the unmitigated stagnation of this sector, to the detriment of our nation’s development,” the CA ruled.
or filed with the commission before the effectivity of this resolution may have one automatic renewal or extension for a period not exceeding one year from the end of their respective terms. The ERC made it clear that automatic renewal clauses or extensions of PSAs shall no longer be permitted upon effectivity of the resolution. Last year, the ERC has received several letters from industry stakeholders, who
raised issues on the constitutionality of the CSP resolution. They sought clarification on the implementation of the CSP and its applicability to the renewal and extension of PSAs, requested a determination of the accepted forms of CSP, and submitted grounds for exemption from its applicability, among others. ERC Chairman Jose Vicente Salazar said last February that the following asked for exemption from the CSP: Philippine
Rural Electric Cooperative Association Inc., the Association of Mindanao Rural Electric Cooperatives Inc., Agusan del Norte Electric Cooperative Inc., Negros Occidental Electric Cooperative, and Palawan Electric Cooperative. SMC Global Power and GN Power also sought for an exemption from the CSP, Salazar added. Region 8 electric cooperatives, meanwhile, requested to draw power from GN Power Ltd. Co.
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China power giant: Money no issue for overseas expansion
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HEN it comes to overseas expansion, money’s not a concern for China’s power-grid giant. State Grid Corp. of China’s ambitions are limited by the quality of assets it can find rather than how much cash it can spend, according to its chairman. The company reaped $13.3 billion in profit last year on more than $300 billion in sales, Liu Zhenya said in an interview on Monday in Beijing. The company, which employs about 1.9 million people and distributes electricity to 1.1 billion, can also rely on its sovereign-grade rating for low-cost financing, he said. “Money won’t be the issue standing in the way of us making international acquisitions,” Liu said. “We are capable of buying sizable assets that fit into our portfolio.” State Grid, whose revenue trumps the likes of Volkswagen AG and Apple Inc., is looking overseas as President Xi Jinping seeks to overhaul the nation’s bloated stateowned businesses and allow market forces to play a bigger role in the world’s second-biggest economy. Developed countries provide mature markets and clear regulations, though acquisition opportunities are scant, Liu said. Meanwhile, the better growth opportunities in developing nations come with higher political risks, he said. China’s big gest electr icit y distributor was among suitors planning to submit bids for Australian power network Ausgrid,
people with knowledge of the matter said last month. The utility has already invested in countries, including Brazil, Australia, Italy and the Philippines, in a bid to diversify and gain technical knowledge, according to a Bloomberg Intelligence report last November. Liu said the company is moving ahead with plans to spend 2.3 trillion yuan ($355 billion) in the next five years to expand its transmission network, a 28-percent increase over the previous period. The Chinese company is also continuing its push overseas, seeking investments everywhere from South America to Africa. China w ill spend more on expanding its grid, including building long-distance transmission lines, than it will on new power plants because the country already has a generating overcapacity, Charles Shum, BI analyst in Hong Kong, wrote in a report last week. State Grid has ambitions to build an ultra-high-voltage global power network to transmit electricity from country to country and continent to continent, a goal that may cost $50 trillion to develop by 2050, Liu said earlier this year. The chairman on Monday compared the concept of a global power link to travel between Beijing and New York City before the introduction of modern civil aviation. “A global energy network can do the same thing and turn previously impossible ideas into reality,” Liu said. Bloomberg News
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EV Summit eyes to lure more investments to PHL
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HE Electric Vehicle Association of the Philippines (Evap) eyes to attract more investments in the country as it sets the Philippine Electric Vehicle Summit 2016 next month. The Evap will hold the fifth EV Summit on April 14 and 15 at the Meralco Multipurpose Hall in Pasig City, with the theme “Investing in the EV Industry towards a Sustainable Transport and Closer Regional Economic Integration.” “This fifth edition of the annual EV Summit aims to highlight models of synergetic business collaborations in the EV industry, which have the investment potential in generating both profit and positive social impact. On the side, member-companies will put on exhibit their latest products and technological advancements,” Evap President Rommel Juan said. Over 500 local and international participants from the industry will participate in the EV Summit, including officials from national government agencies, heads of local government units, academic institutions and non-governmental organization partners in a high-level conference and exhibition.
“Evap has embarked on a program to have its member-companies such as manufacturers, assemblers, suppliers, importers, dealers, fleet operators and battery makers collaborate to provide a complete EV transport solution to clients,” Juan said. “We expect that in an interactive environment, business alliances will be forged and foreign investors will have joint ventures with local EV players to manufacture locally what used to be imported EV parts. We surely will benefit also from the transfer of technology that will ensue,” he added. He stressed that the EV Summit will showcase opportunities for local and foreign industry players on the opportunities of EV sector in the Philippines. “We want the whole world to come and see what we are doing in terms of EV adoption in the Philippines, especially in the area of mass transport application,” he said. “We therefore invite technology partners and funders to come in and invest in the Philippines. We aim to do this through the EV Summit, as we aim to make the Philippines the EV hub of Asia,” he concluded. PNA
RCBC fires Deguito, Torres for breach of bank policies
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CBC has terminated Maia Deguito and Angela Torres, the top 2 officials of the bank’s Jupiter branch, for violating bank policies and procedures and falsification of commercial documents. Other branch and bank officials are expected to be meted out various sanctions, ranging from termination to suspension, in the coming days when the internal investigation is
expected to be completed, the bank said in a statement. The bank said Deguito and Torres’s breaches facilitated the alleged laundering of $81 million of remittance that is now being investigated by the Senate and other government agencies. Appropriate charges in court will be filed by the bank against Deguito and Torres by next week.
Wednesday, March 23, 2016 A3
Govt to award 2 more PPP deals before Aquino steps down in June
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HE government will award two more publicprivate partnership (PPP) projects before the Aquino administration ends its term in June, notwithstanding the postponement of the bid submission dates for seven big-ticket infrastructure projects.
Andre C. Palacios, newly appointed PPP Center executive director, expressed concern about the postponements but cited the reasons to continue with the bidding for the seven PPP projects. “We are mindful the postponement in procurement will mean delay in delivery of public services. But four factors strongly justify completing the bidding for the projects. First, these projects were properly reviewed and approved in 2014. Second, they have been going through a fair, transparent and credible procurement process for over a year now,” he said. “Third, the government has complied with all legal requirements, and has spent valuable resources to develop, approve and procure the projects. Fourth, there is genuine competition among serious bidders, both local and foreign, which will produce the best deals for the government,” Palacios added. The bid submission dates for five regional airport-development projects and the Davao Sasa wharf have been moved from March 28 to an unspecified date. The justice department, on the other hand, postponed the bidding for its regional prison project from March 22 to April 20. “The justice and transportation departments have worked hard to bring the procurement process very close to completion,” Palacios said. “The PPP Center is ready to
help them make the final push to complete the process by June 30.” He emphasized the “need to award these PPP projects so that the construction of better public infrastructure may commence in the next administration.” Bilibid inmates live in overcrowded, dehumanizing conditions. They urgently need facilities conducive to their reformation. This will be addressed through the investment of P50.2 billion in a modern prison complex in Nueva Ecija. Through the project, a suitable prison facility will be created to provide adequate living spaces, facilities, and address the basic needs of inmates incarcerated in existing penal facilities such as the New Bilibid Prison and the Correctional Institution for Women. The proposed prison complex can accommodate 26,880 inmates, including staff housing and administrative buildings, areas for rehabilitation (sports, work and religious activities), and will feature high-security equipment. The private partner will be responsible for the financing, detailed design and construction, and maintenance of the prison facility. A number of supporting accommodation and building-related services may be outsourced as part of the PPP agreement, such as laundry, waste treatment and disposal, sewage water treatment and power generation.
₧108B
Amount needed to modernize regional airports in Iloilo, Bacolod, Bohol, Davao and Cagayan de Oro A modern seaport in Davao, on the other hand, will allow Mindanao farm products to reach the global market. The P19-billion port project also aims to improve trade access to Mindanao from all points of the country by providing a dedicated containerized port in the region. This will also support the region’s growing agroindustrial sector and spur economic growth in Mindanao. The modernization of the existing port includes the construction of new apron, linear quay, expansion of the backup area, container yards, warehouses, and the installation of new equipment like ship-to-shore cranes and rubber-tired gantry. The winning bidder will also be responsible for the operation and maintenance of the multibillion-peso port. Once the first phase of the project is completed in 2018, the Sasa Port will be comparable to the country’s top ports in terms of speed and quality of service, cutting down cargo unloading from three days to three hours by using modern ship-to-shore cranes and port operating systems. And with air passengers projected to experience congestion in Iloilo, Bacolod, Bohol, Davao and Laguindingan airports, the government wants to expand these regional airports to prevent such congestion. This airport program has an aggregate cost of P108.19 billion. PPP projects are not covered by the election ban, which will last from March 25 to May 8 of this year.
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A4 Wednesday, March 23, 2016
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Palace: Ombudsman has power to check SALN
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ALACAÑANG made it clear that, even if the proposed lifting of the bank-secrecy law is still pending, existing rules requiring government officials to file their annual statement of assets, liabilities and net worth (SALN) already allows the Ombudsman to look into their assets. “Let me point out also, just as a reassurance for our listeners, that all officials, when they sign their SALN, they also sign a waiver that allows the Ombudsman to look into their assets. In other words, at least when it comes to government officials, they could not use the bank-secrecy rules to cover up or hide wrongdoing, because there is a requirement to file the SALN each year and this includes the said waiver,” Communications Undersecretary Manolo Quezon III said. However, the waiver that all government officials sign, along with the SALN, only authorizes the Ombudsman to obtain documents, which may show the assets, net worth, business interests and financial connections of a government official from all ap-
RA 1405 Or the bank-secrecy law, mandates that all deposits of whatever nature with banks in the Philippines are considered absolutely confidential
propriate government agencies. It do es not cover pr iv ate banks where a government official can stash millions of pesos and invoke the bank secrecy law to keep the deposits away from pr ying eyes. Under Republic Act (R A) 1405 or the bank secrecy law, all deposits of whatever nature with banks in the Philippines are considered absolutely confidential
and may not be examined by any person or government office, except upon written permission by the depositor, or in cases of impeachment, or upon order of a competent court, in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation. Other exceptions under the bank-secrecy law is when a taxpayer applies for a tax compromise with the Bureau of Internal Revenue, in which case, he is required to waive the confidentiality of his bank deposits. T he loophole in the r u les on the confidentia lit y of bank deposits appears more v u lnerable to abuse in the case of foreig n-cur renc y deposits, which are accorded an absolute confidentia lit y pr iv ilege. Section 8 of RA 6426 or the Foreign Currency Deposit Act of the Philippines states that: “All foreign currency deposits authorized under this Act are hereby declared as and considered of an absolutely confidential nature and, except upon the written permission of the depositors, in no instance shall such foreign currency deposits be examined, inquired or looked into by any person, government official, bureau or office, whether judicial or administrative or private.” Quezon appeared cool to the proposals to remove the bank-secrecy laws, saying the safety of account holders should also be considered in any proposal to partially lift bank secrecy laws. The Philippines is among the three remaining countries in the world that still has a bank secrecy law, the other two being Switzerland and Lebanon. But even then, Switzerland is already planning to relax some of its confidentiality rules, known in the past to be intractable. “I do think there’s one real concern in anything about the bank-secrecy law, and that would be the security or the safety of account holders, and bearing that in mind, I’m sure there will be proper safeguards for this,” Quezon said.
NO MAJOR CHANGE Foreign Affairs Secretary Jose Rene Almendras gestures, as he answers questions from
reporters during his first press conference at Department of Foreign Affairs headquarters in Pasay on Monday. Almendras, who replaced Albert del Rosario after the latter resigned due to health reasons, said there would be no major change in the country’s foreign policy in the last few months under President Aquino, whose six-year term ends on June 30. Under Mr. Aquino, the Philippines brought territorial disputes with China to international arbitration, further straining Manila’s already shaky relationship with Beijing. AP
ACB eyes closer collaboration with UN heritage site body B J L. M
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HE Asean Centre for Biodiversity (ACB) is eyeing to forge closer partnership with the United Nations Educational, Scientific and Cultural Organization (Unesco) Heritage Parks Committee to strengthen the Asean Heritage Parks (AHP) Programme. ACB Executive Director Roberto V. Oliva said a meeting with the UN heritage parks body is in the works to, among others, exchange views to boost the management of AHPs in Southeast Asia. “We are initiating a meeting with Unesco for possible collaboration,” Oliva said. ACB acts as the secretariat of the AHP Program, which essentially aims to aid Asean member-states in the management of protected areas that are considered as biologically important to the region. “We are hoping to strengthen the management of AHPs, and learn from the Unesco World Heritage Site Program,” Oliva added. The Philippines currently has a total of eight AHPs and six World Heritage Sites. The Unesco World Heritage Sites include the Baroque Churches of the Philippines, Tubbataha Reefs Natural Park, Rice Terraces of the Philippine Cordilleras, Historic Town of Vigan, Puerto Princesa Subterranean River National Park and Mount Hamiguitan Range Wildlife Sanctuary. The eight AHPs are Mount Apo Natural Park, Mount Kitanglad
We are hoping to strengthen the management of AHPs, and learn from the Unesco World Heritage Site Program.”–O
Range Natural Park, Mount Malindang Range Natural Park and Mount Hamiguitan Wildlife Sanctuary, and Mounts Timpoong-Hibok-Hibok Natural Monument (MTHNM), all in Mindanao; Mounts Iglit-Baco National Park in Occidental Mindoro; Mount Makiling Forest Reserve in Laguna; and Tubbataha Reefs Natural Park in Palawan. The Unesco heritage site body has been known to be strict in maintaining the status of World Heritage Sites. A Unesco World Heritage Site can be removed from the list, as a result of failure to conserve or protect and mismanagement or neglect that lead to destruction or degradation, which are essential matters that the ACB hopes to learn from for possible adoption in the AHP Program, Oliva added. “We are studying if removing an AHP from the list is possible. Pinagaaralan namin yan and we are hoping to learn from UN,” he said. Meanwhile, Oliva added that the ACB is eyeing to put up AHP markers in all the 37 AHP sites in Southeast Asia. This, he said, will add prestige to the AHP after having been declared as among the “best of the best” pro-
tected areas in the region. In the Philippines Environment and Secretary Ramon J.P. Paje had ordered the installation of AHP markers in all eight sites, starting with the MTHNM in Camiguin, the 37th in Southeast Asia and eigth in the Philippines. The AHP marker for MTHNM was unveiled during its official launching as an AHP on March 16. The ceremonies was attended by DENR officials led by Environment Undersecretary for Field Operations Demetrio Ignacio and local government officials led by Camiguin Governor Jurdin Jesus Romualdo. “Secretary Paje wants to put up markers for all AHPs in the Philippines. This is going to happen very soon,” he said. “The environment secretary wants visitors to read the declaration which highlights the importance of biodiversity, [and] to encourage the people to be biodiversity champions,” Oliva said. ACB promotes the sustainable development and management of A HPs in partnership w ith various stakeholders primarily led by the Protected Area Management Boards.
‘Oil to rebound even if Iran won’t freeze’. . . Algeria and Libya have confirmed they were invited. Nigeria will attend the meeting, a person familiar with the matter said on Monday. Ecuador’s oil ministry, which tried to organize a meeting of Latin American producers earlier this month, didn’t immediately respond to telephone and e-mailed requests on Monday for comment. Brazil
won’t attend the meeting, the energy ministry said on Monday in an e-mailed response. Argentina isn’t planning to send a delegation, Juan Jose Aranguren, Argentina Energy & Mining Minister, said on Monday in an e-mail. El-Badri said he hopes that prices have “bottomed” and will continue to rebound, adding that he expects crude to reach “moderate” rather
than “high” levels. The retreat in production outside the group, and drop in drilling activity in the United States, shows that Opec’s strategy to let the market rebalance itself, rather than intervene by cutting its own production, is working, elBadri said. While inventories remain about 300 million barrels above the five-year average, this surplus will dissipate in time, he said. Bloomberg News
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AseanWednesday BusinessMirror
Virulent anti-gay remarks testing Indonesia’s conservative image
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AYS are a contagion, declares the banner in bold red and black lettering that hangs on the sidewalk of a bustling neighborhood in the Indonesian capital close to embassies, luxury hotels and the homes of some of the country’s leaders. Erected by an ultra-conservative Islamic group, it’s the latest manifestation of a virulent campaign of denigration against gays, lesbians and other sexual minorities that has entered the mainstream and is testing Indonesia’s image for moderation. Echoing venomous headlines in conservative newspapers, government officials and leaders in areas from psychiatry to religion also have heaped condemnation on homosexuality. The defense minister even said gays and lesbians were a more serious threat to national security than nuclear war. The fevered atmosphere began emerging in late 2015, when top academics attacked gay-support groups at universities. By February it had become an onslaught. Pressure from Islamic hard-liners forced the closure of an Islamic boarding school for transgender students in Yogyakarta last month. “Everyone in society is reading the propaganda of hate,” said Augustine, a veteran lesbian activist who goes by one name. “They forget LGBT are human.” She said that for several weeks, she has received phone calls late at night or
before dawn from men who threaten to kill her if she does not close the advocacy organization she works for. Augustine said she has not felt so abused over her sexual orientation since she fled her own father’s anti-gay violence in the late 1990s. Indonesia’s human-rights commission has deplored the outpouring of hatred, but President Joko “Jokowi” Widodo has been silent. He was elected on a platform that included human rights and respect for diversity as a top priority. Kyle Knight, a researcher for New York-based Human Rights Watch, said it feels like the cause of equality has been set back by a generation. Bigoted officials “actually do ruin people’s lives,” he said. Among the startling announcements from officials, the minister for technology, research and higher education said LGBT people should not be welcome on university campuses. Harking back to medical theories discredited decades ago, the head of the psychiatry association called homosexuality a mental condition that could be treated, earning a rebuke from professional associations abroad. Smartphone messaging app Line pulled stickers showing same-sex couples from its Indonesian emoji store in a response to a quixotic order from officials to stop the spread of gay and transgender imagery. AP
Editor: Max V. de Leon • Wednesday, March 23, 2016 A5
Myanmar president to include Aung San Suu Kyi in his Cabinet
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YANMAR’S president-elect on Tuesday proposed an 18-member Cabinet that will include party leader Aung San Suu Kyi, the former dissident who for decades had campaigned for a democratically elected government to replace the country’s military junta. President-elect Htin Kyaw submitted the names to the parliament for a formal review and approval by legislators on Wednesday, after which the Cabinet positions of the ministers will be decided. Notable, and top on the list, is Suu Kyi, who was not able to become president because of a constitutional block, even though she led her party to a landslide win in general elections last November. It was widely rumored that Suu Kyi will become the foreign minister, but that’s far from certain because if
I doubt that Aung San Suu Kyi would take the position of the foreign minister.” —P T K H
she were to take that post she would have to give up her parliament seat and end party activities. “I doubt that Aung San Suu Kyi would take the position of the foreign minister,” said Toe Kyaw Hlaign, a political analyst. “Also, working as a foreign minister requires a lot of time traveling around the world. She will have to do a lot of international relations and overseas trips, and she won’t have the time to exercise control over the government,” he told The Associated Press. Suu Kyi has said in the past that she will be “above the president” and indirectly govern the country from behind the scenes. Still, Suu Kyi’s entry into the government is a remarkable turn of fortunes not only for the Nobel Peace laureate but also for the country, which had been under an ironfisted military rule since 1962. For decades the junta kept Myanmar in isolation and economic stagnation, while refusing to listen to international counsel or homegrown demands for democracy. Suu Kyi came to prominence in 1988, when popular protests
were building up. The junta simply crushed the protests that had turned into anti-government riots, killing thousands of people and placing Suu Kyi under house arrest in 1989. The general did call elections in 1990 but refused to hand over power when Suu Kyi’s National League for Democracy party won overwhelmingly. Suu Kyi was awarded the Nobel Peace Prize a year later. As Myanmar continued to wallow under military rule, Suu Kyi was released and rearrested several times. The junta finally started loosening its grip on power in 2010, allowing elections that were won by a militaryallied party after the NLD boycotted the polls as unfair. After more reforms, another general election was held last November 8 that was swept by the NLD, a reflection of Suu Kyi’s widespread public support. The constitutional clause that denied her the presidency excludes anyone from the job who has a foreign spouse or children. Suu Kyi’s two sons are British, as was her late husband. The clause is widely seen as having been written by the military with Suu Kyi in mind. AP
The W
Business India has the most people without clean water–report
A6 Wednesday, March 23, 2016 • Editor: Lyn Resurreccion
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CUBAN President Raul Castro (right) lifts up the arm of President Barack Obama at the conclusion of their joint news conference at the Palace of the Revolution on Monday in Havana, Cuba. AP/RAMON ESPINOSA
Obama, Castro speak of HR but sound discordant notes
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AVANA—Saying he hoped to bury a last vestige of the Cold War, President Barack Obama held a historic meeting with Cuban President Raul Castro on Monday, but acknowledged that issues of human rights and democracy remained “a powerful irritant” blocking better relations between the two countries.
On a day when the US flag repeatedly appeared alongside potent symbols of the Cuban revolution, Obama insisted that engagement with Cuba after a half-century of hostility was the only way to improve the plight of Cubans and promote reconciliation, while also opening the island to US investment and travel. Obama’s visit to the communist-ruled country—the first by a sitting US president since 1928— marked the culmination of the administration’s rapprochement with its erstwhile bitter enemy. On Tuesday, before continuing to Argentina, Obama was set to deliver a speech on national Cuban television, meet with dissidents and, with Castro, attend an exhibition baseball game between the Tampa Bay Rays and Cuba’s national team. Both governments say they want to start a new chapter in their countries’ relations, but not all tensions could be glossed over. “As we do wherever we go around the world, I made it clear that the United States will continue to speak up on behalf of democracy,” Obama said. “We’ll speak out on behalf of universal human rights, including freedom of speech and assembly and religion.” Obama and Castro disagreed publicly over the very definition of human rights. Castro chided the US failure to provide universal health care or equal pay, which he considers to be human rights. Obama held firm but also sought not to appear interventionist. “Cuba’s destiny will not be decided by the United States or any other nation,” he said, adding that his talks with Castro had been frank, candid and constructive. The comments came after the two leaders met at length in private and delivered remarks before
50 yrs Period of hostility between Cuba and the US agreeing to take questions from among the hundreds of journalists in Havana to cover Obama’s visit. It is rare for Castro to answer reporters’ questions in such settings, and what followed was quite a spectacle. Castro bristled when an American reporter asked if he was willing to release political prisoners. First he pretended his headphones with the translation weren’t working. Then he countered that Cuba doesn’t have political prisoners. “Show me a list…. Tell me a name,” Castro retorted. “If you can show me one, I’ll release them tonight.” Human-rights activists quickly took to social media to provide such lists. Castro then lectured another American reporter on the meaning of human rights before abruptly declaring an end to the news conference. Both Obama and Castro acknowledged they were far apart on political issues, although they listed numerous areas of accord, including ocean conservation, drug interdiction and fledgling commercial projects. Castro also used his remarks to demand the US return the Guantánamo naval base, located at one end of the island, and end its economic embargo against Cuba. Obama has issued several executive orders to chip away at the embargo, but only an act of Congress can end it. “The embargo is going to end,”
Obama said. “When, I can’t be entirely sure. And the path we are on will continue beyond my administration.” For his part, Castro did not address a question about the arrest of dozens of dissidents hours ahead of Obama’s arrival on Sunday. Most were from the Ladies in White, a group of wives and daughters of political prisoners who demonstrate against the Castro government every Sunday. Obama said he still hoped to meet with representatives of dissident groups and other members of civil society. In the welcoming ceremony on Monday morning, Obama placed a wreath of red, white and blue roses at an imposing monument honoring Cuban independence hero Jose Marti, who is revered throughout the hemisphere. “It is a great honor to pay tribute to Jose Marti, who gave his life for independence of his homeland,” Obama inscribed in a visitors book. “His passion for liberty, freedom and self-determination lives on in the Cuban people today.” Obama was greeted by Salvador Valdes Mesa, a member of the Communist Party politburo and storied fighter in the revolution and in repelling the US-backed Bay of Pigs attack in 1961—the year of Obama’s birth. The 96-year-old director of the museum that faces the monument, Aide Diaz Ortega, spoke to Obama about Marti and told the president it was “muy amable [very kind]” of him to visit. Then, at the Revolutionary Palace, past huge portraits of revolutionary commanders Ernesto “Che” Guevara and Camilo Cienfuegos, and the slogan “Hasta la victoria siempre” (“Until victory, always”) Obama met Castro, they shook hands and then reviewed a line of military service members in dress uniform presenting arms. Hundreds of Cubans lined the streets to watch the president’s motorcade pass, waving and calling out. Several Cubans have said they were instructed not to shout anti-US slogans. Later on Monday Obama oversaw a gathering of budding Cuban entrepreneurs and American and Cuban-American businesspeople to underscore the role the administration sees for economic improvement as a catalyst for political change. “I’m here today to say that America wants to be your partner,”
Obama told the group. Political reforms are slow in the communist system, where detention and harassment of activists go on, amid US pressure for greater freedom. And Cuban authorities remain adamant about changing at their own pace. Since the US and Cuba announced detente in December 2014, Obama’s critics have questioned whether the prisoner releases announced at the same time would be the only such gesture from the Cuban side. Four of the prisoners released then were even rearrested. Many Republican and Cuban American members of Congress are dismayed that Obama would meet with the head of the authoritarian government at all, given its grave abuses of power. Obama has faced similar criticism before as he sought to expand diplomatic relations with China, Myanmar and Iran. But at the heart of Obama’s foreign-policy doctrine is a conviction that the US must find ways to engage with even the harshest of regimes, partly because it is the only way to export American beliefs about justice and liberty. The White House also strongly believes that if Cubans gain more spending power, they can loosen the government’s hold and improve their own lives with goods and services, such as telecommunications access. And it doesn’t hurt to open a new consumer market to US businesses that’s just 90 miles offshore. Mom-and-pop businesses, including restaurants, beauty parlors and car washes, have sprouted up all over Havana since Castro began allow ing a measure of private enterprise. Obama took his family to dinner on Sunday at San Cristobal, one of the socalled paladars, privately owned restaurants that are key to Cuba’s emerging private sector. Freedom follows commerce, as supporters of Obama’s view see it; economic improvements can open Cuban society. For evidence, they point to the changes in motion in Cuba, including Starwood Hotels and Resorts’ announcement that it will build in Cuba, the first US company to do so in 60 years. “Each time a new hotel opens, you have a new lobby with Wi-Fi in it,” said Dan Restrepo, Obama’s former Latin America adviser, who played a role in the president’s early Cuba policy opening. TNS
EW DELHI—India has the world’s highest number of people without access to clean water—imposing a major financial burden for some of the country’s poorest people, according to a report released on Tuesday. The international charity Water Aid says 75.8 million Indians—or 5 percent of the country’s 1.25 billion population—are forced to either buy water at high rates or use supplies that are contaminated with sewage or chemicals. That accounts for more than a tenth of the 650 million people worldwide without clean water access—more than any single country in Africa or China, where 63 million have no access. The situation worldwide has improved since 1990, with 2.6 billion people gaining access to clean water since then. But the report urged more action in “a world where one in 10 people are trapped in a cycle of poverty and disease for want of a safe, affordable water supply of their own.” Poor Indians without water access are forced to spend an average of about 72 cents to buy 50 liters of water a day, the amount recommended by the World Health Organization, according to the report. That’s nearly 20 percent of their typical daily income, according to the report. By comparison, people in Britain spend about 10 cents a day for 50 liters. “Poor management of water resources is the biggest problem holding India back,” the report said. “Misappropriation in planning and execution of water-supply projects is another key factor. And projects often use inadequate sources, or pipelines do not reach habitations.” The alternative to buying supplies—using dirty water—comes with sober consequence, sickening countless people every year. About 315,000 children die from diarrheal diseases each year, with 140,000 of those deaths happening in India. India already faces chronic water shortages and drought, as rivers become increasingly polluted and groundwater reserves rapidly decline, thanks to the unchecked use of water pumps by farmers and villagers. The problem is set to worsen as global temperatures rise and rain becomes more erratic
with climate change. Within 15 years, the country is expected to have only half the water it needs to meet competing demands from cities, agriculture and industry. Some Indian cities, including New Delhi and elsewhere in the northern state of Rajasthan, are rolling out water kiosks in drought-prone areas. Others, including Nagpur, in the central state of Maharashtra, are experimenting with privatization schemes to try to improve service. The breadbasket state of Punjab, which produces the vast majority of India’s grains, has set up public water-filtration units to clean groundwater contaminated by sewage and agricultural chemicals, including pesticides and fertilizers. “We don’t handle public goods well,” said environmental economist Pavan Sukhdev. “You need public management systems to manage public goods, and there are no market lessons to help guide that management.” Experts worry the water crisis could exacerbate community conflicts or regional tensions, and have urged authorities to impose strict regulations on water pumping and water use. India’s Supreme Court “has already held that the fundamental right to clean water is a right to life,” said court advocate Satya Tripathi, adding that it’s only a matter of time before the issue comes back before the court. “The government really has to pay attention. Water is the one thing that can tear this country apart.” While India has the most people lacking clean water access, the much smaller countries of Papua New Guinea, Equatorial Guinea, Angola, Chad and Mozambique topped the list of countries with the highest population percentages lacking clean water. And in Papua New Guinea, the 4.5 million without access—or 60 percent of the Southwest Pacific island country’s population—spend more than 50 percent of their typical income on average on water each day, according to the report. Rising seas and more frequent extreme weather events—both consequences of ongoing climate change—“will make water supplies, and life in general, ever more fragile,” it said. AP
Clinton hits Trump over ‘dangerously wrong’ views on Mideast peace talks
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ASHINGTON—Donald Trump’s stated willingness to enter Mideast peace talks from a position of neutrality make him unfit to be commander in chief, Hillary Clinton told a major pro-Israel group on Monday. Speaking from the same stage where Trump, the Republican front-runner, will address the American Israel Public Affairs Committee later on Monday in Washington, Clinton alluded to a number of Trump’s broad pronouncements on foreign policy and especially the US relationship with Israel. Clinton, the former secretary of state, questioned Trump’s temperament as much as his overall foreign-policy vision—or lack thereof. She warned against isolationist tendencies of Trump and others in the Grand old Party. “Candidates for president who think the United States can outsource Middle East security to dictators or that America no longer has vital national interests at stake in the region are dangerously wrong,” she said, adding that it would be a “serious mistake” for the US to “cede the mantle of leadership for global peace and security to anyone else.” “Yes, we need steady hands, not a president who says he’s neutral on Monday, pro-Israel on Tuesday, and who knows what on Wednesday, because everything’s negotiable,” she
said. “Some things aren’t negotiable,” she added later. “And anyone who doesn’t understand that has no business being our president.” Trump’s precise views on foreign policy are, indeed, something of a moving target. In a recent Republican debate, Trump asserted that he was the most pro-Israel candidate but said he would enter negotiations between Israel and Palestinians, framing himself as “somewhat neutral” in hopes of reaching a peace deal. Clinton reiterated her support for a two-state solution, saying that Palestinians “should be able to live and govern themselves,” even as she seemed to share Israel’s doubts that “a willing and capable partner for peace even exists.” Clinton said one of her first acts as president would be to invite the Israeli prime minister to the White House. She downplayed the tensions between President Barack Obama and Prime Minister Benjamin Netanyahu, but said it was time to take the US-Israel relationship to “the next level.” She highlighted her role in building sanctions against Iran that paved the way for the historic nuclear agreement between Iran and six world powers—an Obama initiative that she said has made Israel, the United States and the world safer, and one she would vigorously enforce. TNS
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news@businessmirror.com.ph • Wednesday, March 23, 2016
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HK property crash averted
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ONG KONG homeowners could be forgiven for fearing the worst. In a city notorious for its realestate booms and busts—including a 70-percent tumble triggered by Asia’s financial crisis in the late 1990s—property prices are once again sliding from all-time highs. Yet, there’s little reason to worry that the latest slump will spiral into another crash, if shares of Hong Kong’s biggest developers are anything to go by. After a 34-percent selloff from its June peak t hrough Ja nu a r y 21, t he Hang Seng Properties Index has jumped 18 percent in just two months—outpacing the broader Hong Kong equity market by almost 7 percentage points. The last time the property stock gauge reversed a drop of similar magnitude, in October 2011, home prices began climbing three months later. The index has been a decent leading indicator over the long term, too, foreshadowing turning points in the housing market 70 percent of the time since 1994, according to data compiled by Bloomberg. While that’s not a perfect track record, it does bolster the case of optimists who say the current slide in property values is just a temporary correction, rather than a prolonged tumble. “A price recovery in the physical market is very likely,” said Wee Liat Lee, an analyst at BNP Paribas SA in Hong Kong who predicts home prices will bottom out by year-end and resume annual gains of about 10 percent through 2019. “ The reason share prices are able to lead is because fund managers do a thorough analysis of the physical market condition and predict it will turn,” said Wee, who has a buy rating on all but one of the Hong Konglisted developers he covers.
Volumes rebound
ANALYSTS point to several reasons a crash is unlikely. For one, sales volumes are starting to recover as prices drop to levels that entice buyers. After falling to the lowest level in at least 14 years in mid-February, secondary transactions in major housing estates rebounded fivefold to a nine-month high in the week ended March 13, according to Midland Realty. The market is thawing as fears over an exodus from Hong Kong assets fade. The city’s dollar has rebounded from the weak end of its trading range against the US currency, reaching the strongest level in two months on Monday, while interbank borrowing costs have tumbled from five-year highs as investors scale back bets on higher US interest rates and an economic hard landing in China.
Stocks rally
HONG KONG could reconsider some of its property curbs if prices fall too far, said Cusson Leung, the head of Hong Kong research, conglomerates and property at JPMorgan Chase and Co. Over the past six years, authorities have increased the minimum down-payment requirement on mortgages, lifted taxes on nonresident homebuyers and introduced a special stamp duty for purchasers who flip properties within 36 months. L eung , who sees home prices dropping another 10 percent in 2016 to levels that
would make government easing more likely, has overweight ratings on developers including Cheung Kong Property Holdings Ltd. and New World Development Co. C heu ng Kong Property, which gets about 84 percent of its revenue from the residential market, and New World, which relies on the residential segment for 46 percent of sales, have both jumped 20 percent since the Hang Seng Properties gauge started rallying in January. The index has recorded 23 swings of at least 30 percent since Bloomberg started compiling the data in 1994.
Priciest market
OF course, the stock market does sometimes diverge from the physical-property market, and Hong Kong faces multiple headwinds—including shrinking retail sales, declining port cargoes and waning interest from Chinese tourists—that could translate into lower demand for real estate over the long term. There’s also the problem of affordability. Hong Kong was ranked as the most expensive housing market among 87 major metropolitan areas as of the third quarter of 2015, according to an annual survey compiled by Demographia, after home values surged more than 360 percent from a 2003 nadir t h rou g h m i d - S e p t e m b e r. The government will continue to increase housing supply a nd c u rb dem a nd f rom specu lators, Hong Kong Chief Executive Leung Chun-ying said on Tuesday. “We’ve been reducing our exposure to Hong Kong property,” said Charlie Awdry, a London-based portfolio manager at Henderson Global Investors Ltd., which oversees more than $131 billion. “If you look at the longer-term trend of where the industry fundamentals are going, they tell you that physical property prices are heading down in Hong Kong and there is a lot of supply coming.”
Cheap shares
THE latest home-price data show continued downward pressure. Centaline Property Agency’s index of secondarymarket values sank 2.15 percent in the week ended March 13, the biggest drop since 2008, to extend its decline since midSeptember to 13 percent. Still, that hasn’t stopped shares of real-estate companies from rallying. The Hang Seng Properties gauge climbed to the highest level in more than three months on Thursday, and closed on Monday within 2 percentage points of a bull market. It slipped 0.7 percent at 11:40 a.m. local time on Tuesday. Hong K ong ’s prop e r t y stocks have more than priced in the potential for lower home values, according to Sandy Mehta, the CEO of Value Investment Principals Ltd., a Hong Kong-based advisory firm. The Hang Seng property gauge’s price-tobook ratio fell to 0.58 in January, the lowest level since 1998, and was trading at 0.69 on Monday, according to data compiled by Bloomberg. “ D i scou nt s to c u r re nt marked-to-market land and asset values are high, even if one assumes prices may decline,” said Mehta, whose stock picks include New World. “There is a lot of value for investors who have a one to two year time horizon.” Bloomberg News
A “FOR SALE” sign hangs in front of an existing home in Atlanta in January. AP/JOHN BAZEMORE
Previously owned US home sales decline more than forecast
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ALES of previously owned US homes dropped more than forecast in February after reaching the second-highest level since 2007, as low inventory levels continue to limit progress in housing.
Closings on existing homes, which usually take place a month or two after a contract is signed, decreased 7.1 percent to a threemonth low 5.08 million annual rate, after a 5.47-million pace in January, the National Association of Realtors said on Monday. Sales were weaker than the most pessimistic forecast in a Bloomberg survey of economists. Faster growth in residential real estate is being hampered by a limited selection of available properties which has led to higher offering prices. While mortgage rates are attractive, affordability remains an issue for potential first-time and lower-income buyers whose participation would help broaden the market’s improvement. “The recovery in housing continues to held back by a chain of factors,” Nancy Vanden Houten, a senior analyst at Stone and McCarthy Research Associates in Princeton, New Jersey, said before the report. “It seems like there’s certainly upside for the housing sector, but I would be surprised if it were to suddenly take off.” The median forecast of
7.1% Decrease in sales of existing homes
a Bloomberg survey of 70 economists called for 5.31 million, with estimates ranging from 5.15 million to 5.53 million. Purchases of existing homes decreased in all four regions last month, led by a 17.1-percent slump in the Northeast and a 13.8-percent decline in the Midwest. While a blizzard on the East Coast may have played a role in the drop in closings, the Realtors group said lack of supply and affordability are the bigger restraints.
Housing affordability
“THE question is, is this the beginning where homebuyers are beginning to show resistance to higher prices or is this a one-month fluke in the data,” Lawrence Yun, NAR
IRAQ 1ST NATURAL-GAS SHIPMENT An Iraqi engineer observes a gas carrier as it prepares to set sail at the southern port of Umm Qasr near Basra, Iraq, on Sunday. A government spokesman says Iraq has exported the first shipment of natural-gas condensate in its history, a key development for the Organization of the Petroleum Exporting Countries member struggling to feed a cashstrapped economy amid an expensive fight against the Islamic State group. AP/NABIL AL-JURANI
chief economist, said in a news conference as the figures were released. “Now we are seeing fewer renters interested in buying. They’re indicating affordability is an issue.” Compared with a year earlier, purchases increased 6.4 percent in February on an unadjusted basis. The number of existing properties on the market fell 1.1 percent to 1.88 million in February, from 1.9 million a year earlier. At the current pace, it would take 4.4 months to sell those houses compared with four months at the end of January. It was 4.6 months in February, 2015. The median time a home was on the market decreased last month to 59 days, from 64 days in January.
Median price
IN general, tight inventory levels have helped boost the values of homes on the market. The median price of an existing home rose to $210,800 from $201,900 in February 2015. Higher prices are keeping homes out of reach for some firsttime buyers. They accounted for 30 percent of all purchases, the report showed, compared to the 40 percent that is considered more typical. Cash transactions accounted for about 25 percent of all purchases in February, according to the report. Sales of distressed property, including foreclosures, accounted for 10 percent of the total. Existing home sales, which are tallied only when purchase contracts close, account for more than 90 percent of the residential market. A timelier barometer is new-home
purchases, because they are tabulated earlier in the process, when deals are signed. That report is due from the Commerce Department on March 23.
New construction
SOME relief from tight inventories may be in store in the months ahead, with a separate Commerce Department report showing last week that new-home construction rose more than forecast in February to a 1.18 million annualized rate. The gain was led by the strongest single-family home building in more than eight years. Meanwhile, low bor row ing costs should continue to support the housing industry. Federal Reserve policy-makers last week held off on raising interest rates and scaled back forecasts for how high they’ll go this year, citing the potential impact on the US economy from weaker global growth and financial-market turmoil. The average rate of a 30-year, fixed-rate mortgage was 3.73 percent in the week ended March 17, according to data from Freddie Mac. That’s little changed from 3.78 percent a year earlier and compares with a 3.31 percent rate reached in late 2012 that was the lowest in records back to 1971. Still, builders remain cautious, with their confidence holding in March at a nine-month low as a measure of the six- month outlook decline to the weakest level in a year, according to a report from the National Association of Home Builders and Wells Fargo. Bloomberg News
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Wednesday, March 23, 2016
The World BusinessMirror
Fearful of China’s reach abroad, asylum seekers try risky voyage
SONG ZHIYU (foreground) and Li Xiaolong sit at a police station in Chumphon province, southern Thailand, after a failed attempt to reach New Zealand by boat. Song and Li were among nine Chinese asylumseekers who attempted a risky sea voyage to New Zealand but turned back after their boat was lashed by violent seas. ZHANG HONG VIA AP
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ANGKOK—Dong Junming was detained several times in his Chinese homeland before he and his family fled to Bangkok in February 2015. A year later, he was preparing to make a more desperate journey to evade Chinese authorities who still felt dangerously close. In the months since he arrived in Thailand, dozens of Chinese asylum-seekers have been sent back home by Thai authorities. Other dissidents have simply disappeared from Thailand and Hong Kong before re-emerging in mainland Chinese custody. Beijing appears increasingly eager to snatch back countrymen who have attempted to escape its grasp. Dong is a practitioner of the Falun Gong spiritual movement, which is banned in China and whose members are persecuted there. He, his wife and daughter have a long wait to obtain refugee status and get resettled in a third country— they won’t even interview with the
UN refugee agency until at least 2017. In the meantime, he’s unable to work legally and his family’s travel documents have expired. So Dong decided to flee once more. This time it would be by boat, to New Zealand, some 6,000 miles away. The country is so isolated that, as far as authorities know, not one refugee boat has successfully reached its shores. He would leave with six other Chinese adults, including a couple taking their two sons, ages 1 and 7. They believed New Zealand offered them the best chance of gaining refugee status. Dong, as well as eight other Chinese dissidents living in Thailand
who did not make the boat journey, described lives of anxiety and frustration bordering on outright despair in interviews with The Associated Press. Though free and under no immediate deportation threat, Dong said he feared what the future might bring. So when offered a berth on the yacht in January, he took it. “It’s highly risky out there on the ocean, but we are so fearful here in Thailand that I thought I should take the risk,” he said. Dong and fellow travelers boarded the yacht the night of February 29. The captain was democracy activist Li Xiaolong, the father of both children aboard. He bought the secondhand vessel, which also carried his wife and two brothers. They had a month’s supply of food and water. Their confidence was boosted by a fellow activist who succeeded in making a shorter sea voyage from Thailand to Australia. They believed their own journey would be smooth. They were wrong. Fears over the growing reach of Chinese security services crystallized among many Chinese dissidents with the recent disappearances of people associated with a Hong Kong bookstore that sold gossipy titles on the lives of Chinese leaders. One of the missing was believed to have been
100 Asylum-seekers from China’s Turkic Muslim Uighur minority sent back by Thai government
abducted from Thailand, another from Hong Kong, though both have since said they voluntarily returned to mainland China. Asylum-seekers in Thailand were more alarmed that the Thai government sent back about 100 asylumseekers from China’s Turkic Muslim Uighur minority last summer, and repatriated two Chinese dissidents in November, saying they violated immigration rules. Critics viewed Thailand’s military-led government as catering to China, its biggest trading partner. With President Xi Jinping at China’s helm and brimming with confidence, the communist government is pursuing greater cooperation with police abroad. One aspect of the campaign popular within China is Beijing’s Skynet operation, which seeks the
return of corrupt Chinese officials and others accused of absconding overseas with ill-gotten gains. Since October 2014, China has seen the return of 124 corruption suspects who had fled to 34 countries, the country’s chief justice told the national legislature this month. That campaign has had limited success in the US, which has no extradition treaty with China and requires evidence that the offences they are accused of by China would also constitute a crime in America. Beijing has raised the heat not only on corruption suspects but also on dissidents who fled China. Forced repatriations and alleged abductions have particularly rattled Chinese asylum-seekers who have congregated in Thailand, where the UN High Commissioner for Refugees has an office. “Beijing has become so ruthless that it grants us no way out at all,” said Hu Junxiong, a democracy activist who fled to Thailand last year, after Chinese authorities detained him 35 days for helping other activists with computer and technology issues. “It won’t let us flee, but stays on our tail to catch us and bring us back to China, where we surely will be met with harsh persecutions and end up in misery,” Hu said in an interview from Bangkok. The yacht set off from Pattaya, southeast of Bangkok. Dong’s wife and daughter stayed in Thailand because the family’s funds were limited and, since their visas had expired, they were at risk of being detained by Thai authorities. The next day, the vessel was battling waves up to 5 meters tall, Dong said. About 135 kilometers into the journey, a problem emerged with the yacht’s steering. One of those aboard managed to fix it, but after another 100 km the waves returned and the rudder went out again, Dong recalled. “The boat was spinning, and it was shaking violently,” Dong said. “We were still 100 km from the closest shore.” They turned the boat toward shore and manually operated the rudder. Their distress calls went unanswered. “I was extremely fearful,” Dong said. “We were in lifejackets, and I was so sick I could not get up.” The baby and his brother were quiet, Dong recalled. “The little one had his eyes wide open and did not cry at all. The older one was simply lying there. I did not know if he was scared or was feeling numb. Their mother was vomiting and could not do anything.” Deep into the night of March 1, the yacht ran aground in southern Thailand’s Chumphon province. The boat was taking on water and listed on the shore. After waves gradually pushed it to an upright position, the adults waded to land, fetched the children and called for help, Dong said. “Our boat could have sunk out there,” Dong said in an interview from Bangkok. “We are lucky to be alive.” AP
Witness, funeral helped lead police to Paris attacks suspect
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RUSSELS—A keen-eyed witness who spotted a pale, slender figure fleeing an apartment near a Brussels auto plant one week ago set in motion a vast police dragnet that within 72 hours led to the capture of Salah Abdeslam, the most-wanted man in Europe. Another key—if unwitting—helper in leading authorities to the hideout of their high-value quarry was a pallbearer at the burial of the fugitive’s brother. Abdeslam is being held in a Belgian high-security prison, with France seeking his extradition so he can stand trial for his alleged role in the November 13 rampage of gunfire and suicide bombings that killed 130 people. The 26-year-old Frenchman was ar-
rested on Friday after being run to ground by investigators in the same gritty Molenbeek neighborhood of Brussels where he grew up. Much remains unclear about Abdeslam’s movements in the four months he managed to elude authorities multiple times. “We’re still far from completing the puzzle,” Belgian federal prosecutor Frederic Van Leeuw acknowledged on Monday. The fugitive’s luck began to run out on the afternoon of March 15, when a sixmember police team showed up to search an apartment believed linked to the Paris attackers, according to government and security officials. The joint Belgian-French search party thought the residence near an Audi fac-
tory in south Brussels was vacant because the water and power had been turned off for weeks. But as soon as they opened the door, they were fired on from inside by at least two people wielding a Kalashnikov assault rifle and a riot gun, officials said. In the melee, four police officers were slightly wounded, and two occupants of the apartment managed to slip away, reportedly via the rooftop. One witness got a good enough look at one of the escapees to describe him to a police sketch artist, said Ahmed El Khannouss, the first deputy mayor of Molenbeek. The portrait that resulted “bore a very strong resemblance to Salah Abdeslam,” El Khannouss said. Forensic scientists found Abdeslam’s fingerprints in the apartment.
There also was the body of a suspected Abdeslam accomplice who was shot and killed by a police sniper as the gunman prepared to fire on police from a window, along with a Kalashnikov, a stockpile of ammunition, and a banner of the Islamic State extremist group. That’s what Belgian authorities made public. What they didn’t disclose, said former French intelligence agent Claude Moniquet, was that they also recovered cell phones that quickly told them who the apartment’s occupants had contacted. Now that his cover had been blown, “the working assumption of the police was that Abdeslam would go to a place he knew,” said Moniquet, director of the Brussels-based European Strategic Intelli-
gence and Security Center. Most likely, that meant Molenbeek, home to one of the largest North African communities in Belgium and the area where Abdeslam grew up with several of the Paris attackers. Abdeslam’s older brother Brahim, one of the Paris suicide bombers, was buried on Thursday in a Brussels cemetery after French investigators finally released his remains to the family. A score of mourners came to the funeral, as did police. El Khannouss said identity papers were checked. Moniquet added that police “interrogated people, took information on their phones.” Photos published in the Belgian press showed that one of mourners who carried Brahim Abdeslam’s casket was a young man with a beard who wore a black knit cap. AP
news@businessmirror.com.ph
YEMENI JEWS BROUGHT TO ISRAEL COVERTLY
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ERUSALEM—Seventeen Yemeni Jews were spirited out of their country to Israel in a secret operation on Sunday night, said Yigal Palmor, spokesman for the quasi-governmental Jewish Agency for Israel that coordinated it. The 17 and two others who arrived last week were the last Jews who wished to leave their war-torn country for Israel, Palmor said by phone on Monday. About 50 others, most of them elderly, declined the agency’s offer to emigrate and will remain in Yemen without an organized Jewish communal structure, he said. He called the operation “the end of the story” of the Jewish community in Yemen. Channel 2 TV said the US State Department was involved in the airlift, which first brought the Jews to an unidentified third country before Israel. According to a Jewish Agency statement, attacks against Jews in Yemen have risen since 2008, when a teacher was murdered in the northwestern town of Raydah. As Yemen descended into civil war and the humanitarian situation in the country worsened, “the Jewish community has found itself increasingly imperiled,” it said. The operation had been in preparation for months, said Palmor, who declined to disclose details. “They were living in a very hostile surrounding, and obviously actions to bring them out had to be secret,” he said. The agency has extracted about 200 Jews from Yemen in the last few years, he said. A family of five came from the capital, Sana’a, and 12 others came from Raydah, including the community’s rabbi, who brought a 600-year-old Torah scroll. A grandfather of the Sana’a family was murdered in 2012 for being a Jew, and the Jewish Agency brought his body to Israel for burial, Palmor said. The last arrivals mark the closing chapter in a tale of secret operations to bring Yemeni Jews to Israel. Shortly after the Jewish state was founded, close to 50,000 community members—the overwhelming majority—were brought in months of secret airlifts known as Operation Magic Carpet. “From Operation Magic Carpet in 1949 until the present day, the Jewish Agency has helped bring Yemenite Jewry home to Israel,” Jewish Agency Chairman Natan Sharansky said in the statement. “Today we bring that historic mission to a close.” Most of the Jews who remain in Sana’a live in a closed compound near the US embassy and enjoy the protection of Yemeni authorities, the agency said. Bloomberg News/TNS
Airline worker flees, cocaine found in bag
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OS ANGELES—Federal authorities are searching for a flight attendant they say ran from a security screening at Los Angeles International Airport (LAX), leaving behind about 31 kilograms of cocaine stashed in her luggage. Transportation Security Administration (TSA) officers stopped the woman at random on Friday, and she remained at large on Monday, said Special Agent Timothy Massino with the US Drug Enforcement Administration. The flight attendant was sent to a secondary screening area, but she quickly dropped her bag, ditched a pair of Gucci heels and fled barefoot downward an upward-moving escalator, said Marshall McClain, president of the union representing LAX airport police officers. McClain said the case shows why all flight attendants and other airport employees need to be screened. “With her bringing this amount of narcotics in the airport, chances are this wasn’t her first time through,” said McClain, head of the Los Angeles Airport Peace Officers Association. Security threats from “insiders,” including airline and airport employees and workers hired by contractors, have been a focus of the TSA, particularly after the December 2014 arrest of several Delta Air Lines baggage handlers. Prosecutors allege they smuggled guns, including an AK47, from Atlanta to New York. The TSA has said that full screening of all employees would cost too much. Instead, the agency has urged airports to increase random screenings of workers and to keep background checks up to date. AP
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Editor: Lyn Resurreccion • Wednesday, March 23, 2016
FBI: Attacker’s phone possibly accessible without Apple help
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OS ANGELES—The government has been adamant for weeks: Federal Bureau of Investigation (FBI) investigators need to unlock an encrypted iPhone used by one of the San Bernardino attackers, and Apple Inc. was the only one that could do it.
In a stunning reversal on Monday, federal prosecutors asked a judge to halt a much-anticipated hearing on their efforts to force Apple to unlock the phone. The FBI may have found another way, and Apple’s cooperation may no longer be needed, according to court papers filed late on Monday, less than 24 hours before Tuesday’s hearing. “An outside party” came forward over the weekend and showed the FBI a possible method to access the data on Syed Rizwan Farook’s encrypted phone, according to the filing. “Testing is required to determine whether it is a viable method that will not compromise data on
Farook’s iPhone,” the filing said. “If the method is viable, it should eliminate the need for the assistance from Apple.” If it’s viable, that also means the government has significantly undermined its arguments against Apple, said Kristen Eichensehr, a visiting law professor at the University of California, Los Angeles. “If they found another way into the phone, that doesn’t just weaken their case. It means they can’t satisfy the legal standard to sustain the court’s order,” said Eichensehr, referring to Magistrate Judge Sheri Pym’s February 16 ruling compelling Apple to create software that would disable
security features on the phone. Pym granted the government’s request to postpone Tuesday’s arguments in the case and stayed her previous order. She ordered the government to file a status report by April 5. The development raised more questions than it answered. It’s unclear who is helping the FBI with the phone and why it took so long for a possible solution to be identified. One thing seems clear—that the government likely would not have disclosed it had found another possible way to unlock the phone unless it was almost certain the method would work, said Robert Cattanach, a former US Department of Justice lawyer who handles cybersecurity cases for the Dorsey and Whitney law firm. He said the disclosure alone weakens the government’s case by introducing doubt that it could only access the phone with Apple’s help. “They’ve created ambiguity in a place where they’ve previously said there is none,” he said. In a conference call with reporters, Apple lawyers said it’s premature to declare victory in the case because authorities could come back in a few weeks and insist they still need the company’s help. The lawyers spoke under an Apple pol-
14
Number of people killed by Syed Rizwan Farook and his wife in San Bernardino, California, on December 2, 2015
icy that wouldn’t allow them to be quoted by name. The company hopes the government will tell Apple about whatever method it uses to access the phone’s encrypted files. But the lawyers said it might be up to the FBI to decide whether to share the information. Lawmakers, civil-rights advocates and other tech companies have criticized the FBI for not doing more to try to crack the iPhone itself before seeking to force Apple’s hand. “To me, it suggests that either the FBI doesn’t understand the technology or they weren’t giving us the whole truth when they said there is no other possible way” of examining the phone without Apple’s help, said Alex Abdo, staff lawyer for the American Civil Liberties
Union (ACLU). “Both of those are scary to me.” The ACLU has filed a court brief supporting Apple’s position. Prosecutors have argued that the phone used by Farook probably contains evidence of the December 2 attack in which the county food inspector and his wife, Tashfeen Malik, slaughtered 14 at a holiday luncheon attended by many of his work colleagues. The two were killed in a police shootout hours later. The FBI has said the couple was inspired by the Islamic State group. Investigators are still trying to piece together what happened and find out if there were collaborators. The couple destroyed other phones they left behind, and the FBI has been unable to circumvent the passcode needed to unlock the iPhone, which is owned by San Bernardino County and was given to Farook for his job. Apple has argued that the government was seeking “dangerous power” that exceeds the authority of the All Writs Act of 1789 it cited, and violates the company’s constitutional rights, harms the Apple brand and threatens the trust of its customers to protect their privacy. The 18thcentury law has been used on other cases to require third parties to help law enforcement in investigations. It’s not clear what method the government now wants to test. But even as the FBI has insisted that only Apple is able to provide the help it needs, some technical experts have argued there are other options. The most viable method involves making a copy of the iPhone’s flash memory drive, said Jonathan Zdziarski, a computer expert who specializes in iPhone forensics. That would allow investigators to make multiple tries at guessing the iPhone’s passcode. A security feature in the phone is designed to automatically erase the data if someone makes 10 wrong guesses in a row. But if that happens, Zdziarski said, investigators could theoretically restore the data from the backup copy they have created. The data itself would remain encrypted until the phone is unlocked, but it would remain viable while investigators continued to guess the passcode, he added. “It’s a lot more involved than it sounds,” Zdziarski cautioned, and no one has demonstrated that it would work in this case. Some experts have also suggested that investigators could use lasers and acid to deconstruct the phone’s memory chip, in order to physically examine the encrypted data and the encryption algorithm, in hopes of cracking the code. But hardware experts say that method has a high risk of destroying the memory during the process. AP
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Armed British ship believed carrying plutonium leaves eastern Japan port
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OKYO—An armed British ship believed to be carrying enough plutonium to make about 40 atomic bombs has left a port in eastern Japan to transport the shipment to the US for storage. Kyodo News agency says the British-flagged nuclear fuel transport ship Pacific Egret left the port in Tokai village, northeast of Tokyo, on Tuesday, one day after arriving with another armed ship that had waited offshore. Tokai is home to Japan Atomic Energy Agency, a research complex where the plutonium had been used for research. The ship, operated by Pacific Nuclear Transport Ltd., was to take the 331 kilograms of plutonium to a US government facility in South Carolina under Japan’s 2014 pledge. AP
US commander in Afghanistan apologizes for hospital attack
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UNDUZ, Afghanistan—The new commander of US and North Atlantic Treaty Organization (Nato) forces in Afghanistan apologized on Tuesday to the people of Kunduz for the deadly attack on a hospital in the city last year that killed 42 people. US Army Gen. John Nicholson traveled to the northern city to meet local leaders and relatives of those who died in the October 3 attack. A US Air Force AC-130 gunship attacked the hospital run by medical charity Doctors Without Borders in what Nicholson called a “horrible tragedy.” Nicholson’s wife Norine accompanied him to Kunduz, along with acting Defense Minister Masoom Stanekzai. More than a dozen US military personnel have been disciplined for mistakes that led to the sustained attack. A US military report on the hospital attack is expected to be released within days. A separate US report on the incident obtained last fall by The Associated Press said the aircraft fired 211 shells at the hospital compound over 29 minutes before commanders realized the error and ordered a halt. Afghan officials, including Stanekzai, insisted that Taliban fighters, who had overrun the city on September 28, were using the hospital as a base from which to attack Afghan forces. No evidence has been found to support the claims. Doctors Without Borders, also known by its French initials MSF, immediately ceased operations in Kunduz and has yet to return. The hospital was the only trauma clinic in northern Afghanistan. The Taleban’s insurgency spread across the previously peaceful north of the country last year, following the end of the international combat mission in 2014. Military leaders expect another year of fierce fighting amid uncertainty about the future of the peace process and talks between the Afghan government and the Taliban. AP
Explosions rock Brussels airport, subway; at least 13 people dead
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RUSSELS—Authorities locked down the Belgian capital on Tuesday after explosions rocked the Brussels airport and subway system, killing at least 13 people and wounding many more. Belgium raised its terror alert to its highest level, diverting arriving planes and trains and ordering people to stay where they were. Airports across Europe tightened security. The explosions, which the Brussels prosecutor’s office called terror attacks, came just days after the main suspect in the November Paris attacks was arrested in Brussels. After his arrest, Salah Abdeslam told authorities he had created a new network and was planning new attacks. At the Brussels airport, two explosions splattered blood across the departure lounge and collapsed the ceiling. Witnesses told The Associated Press (AP) that one occurred at an excess baggage payment counter and the other near a Starbucks cafe.
All flights were canceled, arriving planes and trains were diverted and Belgium’s terror-alert level was raised to its highest level. Authorities told people in Brussels to stay where they were, bringing the city to a standstill. Airport security was also tightened in Paris, London and other European cities. European security officials have been braced for a major attack for weeks, and warned that the Islamic State group was actively preparing to strike. Abdeslam’s arrest on Friday heightened those fears, as investigators said many more people were involved in the November 13 attacks that killed 130 people in Paris than originally thought, and that some are still on the loose. There was no immediate claim of responsibility for Tuesday’s attacks. Belgian media reported 13 people were killed at the airport. It was not clear whether any died in the metro explosion. Zach Mouzoun, who arrived on a flight from Geneva about 10 minutes before
the first blast, told BFM television that the second, louder explosion brought down ceilings and ruptured pipes, mixing water with victims’ blood. “It was atrocious. The ceilings collapsed,” he said. “There was blood everywhere, injured people, bags everywhere.” “We were walking in the debris. It was a war scene,” he said. Near the entrance to the Maelbeek subway station, not far from the headquarters of the European Union, rescue workers set up a makeshift treatment center in a pub. Dazed and shocked morning travelers streamed from the metro entrances as the police tried to set up a security cordon. “The Metro was leaving Maelbeek station for Schuman when there was a really loud explosion,” said Alexandre Brans, 32, wiping blood from his face. “It was panic everywhere. There were a lot of people in the metro.” Francoise Ledune, a spokesman for the Brussels Metro, said on BFM television that there appeared to have been
just one explosion, in a car that was stopped at Maelbeek. First responders ran through the street outside with two people on stretchers, their clothes badly torn. The explosions at the airport hit at the middle of the busiest time there. Smoke was seen billowing out of the terminal. Amateur video shown on France’s i-Tele television showed passengers including a child running with a backpack, dashing out of the terminal in different directions as they tugged luggage. Another image showed a security officer patroling inside a hall with blown-out paneling and what appeared to be ceiling insulation covering the floor. Marc Noel, 63, was about to board a Delta flight to Atlanta to return to his home in Raleigh, North Carolina. A Belgian native, Noel says he was in an airport shop buying automobile magazines when the first explosion occurred about 50 yards away. “People were crying, shouting, chil-
TWO women were wounded in Brussels Airport in Brussels, Belgium, after explosions were heard on Tuesday. A developing situation left at least one person and possibly more dead in explosions that ripped through the departure hall at Brussels airport on Tuesday, the police said. KETEVAN KARDAVA/ GEORGIAN PUBLIC BROADCASTER VIA AP
dren. It was a horrible experience,” he told AP. He said his decision to buy the magazines might have saved his life. “I don’t want to think about it, but I would probably have been in that place when the bomb went off.” With three runways in the shape of a
“Z,” the airport connects Europe’s capital to 226 destinations around the world and handled nearly 23.5 million passengers in 2015. Passengers were led onto the tarmac and the crisis center urged people not to come to the airport. AP
A10 Wednesday, March 23, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
The role of drones: A welcome change
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T is with pride and joy that we greet the news that the Food and Agriculture Organization (FAO) of the United Nations is collaborating with our Department of Agriculture (DA) to use drones for the purpose of disaster risk reduction in our agricultural sector. Until this instance, the drone has been associated with the indiscriminate killings of hundreds, if not thousands, of civilians in Pakistan, Somalia, Libya, Yemen and Afghanistan by the United States arising from its so-called war on terror. “The use of drones, or unmanned aerial vehicles, in agriculture can significantly enhance risk and damage assessments, and revolutionize the way we prepare for and respond to disasters that affect the livelihoods of vulnerable farmers and fishers, and the country’s food security,” FAO Representative in the Philippines Jose Luis Fernandez is quoted as saying. The FAO said the information gathered through drone missions can be used in the preparation of early-warning systems and farm-level advisories. Farmers and fishermen can use the information to make informed decisions, and the government’s response programs can be strengthened because of it. The information can also be used for environmental monitoring and in the design of agricultural infrastructure. Drone use has, in fact, already begun in Pampanga. It will be extended to neighboring areas as necessary. It will be carried out entirely by Philippine personnel, who have appropriate qualifications, or who will be given the essential training, if they need it, with equipment provided by the FAO. How gratifying this is, to think that the drone has been used by the US in the last decade-and-a-half almost exclusively for killing purposes. From what is known, George W. Bush authorized 50 drone strikes during his administration, while President Barack Obama has, so far, given the go signal to 500 such strikes. The anonymity of the executioners of drone operations emboldens these people to feel unaccountable for their actions. But one thing is known: Drone attacks are approved by the President of the US acting on recommendations of the Pentagon and the Central Intelligence Agency. It is only when important people outside of the loop express outrage that we are awakened to the abomination of this barbaric act. In a case of too little too late, to quote a New York Times editorial, the White House now apparently wants to disclose the results of drone actions outside of combat zones, because “it is the right thing to do” and is essential to the maintenance of the “legitimacy” of US counterterrorism actions. But back to the Philippine DA-FAO collaboration. Disaster risk reduction remains one of our weakest programs in the agricultural sector, when it exists at all. We hope efforts in this direction will be helped by this collaboration. In addition, we hope the collaboration brings about improvements in productivity in our agricultural sector, and enhancement of incomes of farmers, fishermen and others involved in our agriculture. We wish these two agencies all success in their joint endeavor.
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OCIAL Security System (SSS) members—both individuals and employers—don’t have to go to the agency’s branch just to inquire about their contributions records, file sickness or maternity notifications or even salary-loan applications. They can do all these transactions in the comfort of their offices or homes, for as long as they have Internet access.
Aside from viewing general SSS information through the SSS web site (www.sss.gov.ph), members and employers can transact securely through the My.SSS portal, an interactive facility that provides a convenient alternative to over-the-counter transactions. Launched in 2011, the facility allows the online submission of salary-loan applications and maternity and sickness notifications by individual members, and reports of newly hired workers, employee-maternity and -sickness notifications, contribution
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and loan-collection lists, and certification of employee salary-loan applications by employers. Registration is necessary to ensure information security and prevent identity theft for both individual and employer members. They must have valid e-mail addresses where SSS can send the next phase of the registration process. Once registered, it will be easier, faster and more convenient for members and employers to do business with the SSS. As of end-2015, some 3.5 million members have registered for
the use of the My.SSS facility, while the number of registered employers reached 247,385. Total transactions through the online facility totaled 5.5 million at end-2015, and the bulk of these transactions, or 5.41 million, were from employers using the SSS web site to submit their employment, contribution and loan-collection reports, salary-loan applications of employees, and sickness and maternity notifications to facilitate the benefit applications of their workers. The rest were transactions by individual members who often use the online facility to apply for salary loans. Last September the SSS launched the online issuance of social-security (SS) numbers. By going to the SSS web site and clicking on the number-issuance icon, new entrants to the private-sector work force can easily apply for an SS number without having to queue in SSS branches to obtain it. SS numbers issued through the SSS web site are tagged as temporary, but can already be used for employee reporting and contribution payment by employers. To convert it
to a permanent SS number to allow the availment of loans and benefits, the member would have to present any accepted supporting documents, such as his or her birth or baptismal certificate or valid passport to any SSS branch. At the end of 2015, close to 26,000 new members were issued their SS numbers online. The SSS is looking for more ways to make it more convenient for members to do business with it. Aside from transactions through the Web, members can also use text messaging to access their own records or find out the status of their benefit or loan applications. By simply texting SSS REG to 2600, they can register to this SMS-inquiry facility for a P2.50 fee for every text message. 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.
Presidentiables must learn from FDR and his story Michael Makabenta Alunan
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SSS’s convenient alternative to over-the-counter transactions
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HE petty peeves and personal intramurals that characterize the recent presidential debates have turned a political exercise into a circus, and have reduced Filipinos to mere voyeurs and kibitzing spectators, when what should have been tackled more are issues topping surveys and people’s concern—jobs and poverty eradication. ‘New Deal’ or No Deal? This brings us back to the many lessons in history, foremost among which are the programs of the great US President Franklin Delano Roosevelt (FDR) and his story on how he bailed out America out from the Great Depression of food lines and massive unemployment in the 1930s and transformed the nation into the most powerful economy in the world. There are many accounts about FDR’s contributions, including distortions about his work, but on the contrary, an author of many books, Nick Taylor, declared in his book When FDR Put the Nation to Work that Roosevelt, through Harry Hopkins, director of his Civil Works Administration (CWA), put over 4 million Americans to work” in over a month’s time in the winter of 193334. FDR called his overall program the New Deal and believed he could not deal otherwise. The book noted that “Hopkins was not a businessman, but spent all his life in social work.” It added that he “blew into Washington like a hurricane. Finding the
furniture had not yet been moved into his office, ...he grabbed a chair and a desk in the hallway, and within two hours [after getting hired], he approved and issued $5,336,317 in grants” to eight states. When FDR assumed office in March 1933, the Great Depression was at its worst, with industrial production down by half, farm prices plunging by 60 percent and unemployment soaring at 25 percent. But because existing jobs were not enough, underemployment was as high as 58 percent, and food lines were all over the place. And 32 of the 48 states closed their banks owing to bank runs. 4 Million jobs in a month? FDR instantly made many reforms and luckily got Hopkins later in the year. With marching orders, Hopkins immediately summoned on November 15 all mayors and governors to Washington, telling them that FDR’s newly signed National Industrial Recovery Act, creating the CWA, aims to employ 4 million people within a month. Taylor estimated that the 4 million targeted jobs are equivalent to 9.6 million jobs by 2010 alone.
CWA laid 12 million feet of sewer pipe, built 255,000 miles of roads, 40,000 schools, 3,700 playgrounds, about 1,000 airports and 250,000 outhouses. Hopkins approved over 100 projects a day, and the Bureau of Printing had to go three shifts just to print more checks. FDR’s New Deal thrust had many programs and offices, among which are the Temporary Emergency Relief Administration, later institutionalized as Federal Emergency Relief Administration, the CWA later changed to Works Progress Administration, the Public Works Administration, Reconstruction Finance Corp. and Tennessee Valley Authority, etc. The most popular under the CWA was the Civilian Conservation Corps, which herded hundreds of thousands of jobless people from the cities into training camps and teached them literacy and skills like carpentry and plumbing, etc., and made them build roads, sewers, dams, piers, airports, farms, schools, bridges, hospitals, and water systems, etc. Efficient at 2 percent Admin cost. Apart from being effective, FDR’s programs were efficient. About 80 percent went directly into workers’ pockets that stimulated consumer demand and the economy. The rest went to equipment and capital outlay, and only less than 2 percent on administration, a far cry from the 20 percent in the Philippines for a bloated bureaucracy of admin personnel, not to mention the corruption that can go as high as 30 percent to 40 percent in some cases, or even higher for ghost-projects. Some of FDR’s critics wanted people to believe that it was the ideas of economist John Maynard Keynes that allegedly made government solve the Great De-
pression by boosting consumer demand or putting money in people’s pockets, even to the extent of ridiculously hiring people to dig up ditches, then hiring another group to fill them up. Keynes didn’t do it? Shades of Keynesian economics are manifested in the massive employment in services, similar to the hiring of street sweepers and Metro Aides, or even the consumer demand-enhancing Conditional Cash, Transfer, or Pantawid Pamilyang Pilipino Program. FDR’s job generation, on the contrary, is not Keynesian economics, but a concrete application of Gottfried Wilhelm Leibniz’s concept of physical economy or physical wealth creation combined with the ideas of American Revolution’s First Treasurer and main Constitution framer Alexander Hamilton, who believed government could utter credit to fund any development, provided it is spent on something productive that generates more value-added earnings and higher multiplier effects. His story matters? Whatever it is, which entails an entire discourse altogether, indeed, it helps to learn from history. This reminds us of SpanishAmerican poet George Santayana (18631952) who said: “People who don’t learn from history are compelled to repeat it.” Indeed, we can learn from FDR and all the experiences of great leaders from other countries. As for our presidentiables, apart from having the commitment, character, compassion and charisma as leaders who could inspire the people, they must also have the competence, which they can gain partly by learning from history. E-mail: mikealunan@yahoo.com.
Opinion BusinessMirror
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Wednesday, March 23, 2016 A11
Multidimensional leadership The acquisition of 51% of PNB Life Insurance Inc. Henry J. Schumacher
Atty. Dennis B. Funa
INSURANCE FORUM
VIEW FROM THE 19TH FLOOR
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ECENTLY, I wrote about “distributed leadership” as the answer to the convergence of the era of transparency, change as the new romance and the purpose-driven customer. It shifts the responsibility for leadership from a few senior leaders to employees. In reality, leadership has already been distributed if employees are expected to create an exceptional experience in every transaction and adapt to changing customer demands. Transparency requires everyone in the organization to become a chief spokesman and defend the organization’s actions. Adaptation to change is happening faster than we are willing to admit. Today I wish to focus on “multidimensional leadership.” Our business environment is facing unprecedented change, becoming more complex and unpredictable day by day. Our current view of leadership tends to be one-dimensional, with one or two people at the top. In reality, leadership is multidimensional. Exploring those different expressions offers a clear road map for leadership development. Here are five different expressions of leadership: Leading from within—when we are leading from within, we remain flexible and open to outside influences, but rely most heavily on our moral compass. We let go of performing and striving for approval and, instead, seek to lead according to our own values and principles. By leading from within, we remain centered in our own self-authority and strive to offer our best to the world every day. We lead by example through the integrity of our day-today activities and our leadership is nourishing. Leading from the front—true “leaders from in front” inspire those who are following by providing a clear vision and direction, while, at the same time, encouraging connection and collaboration. Without a connection to people, leading from the front can be isolating and burdensome. The most important aspect of a “leader in front” is knowing when to sit down and move to leading from behind and encouraging others to take charge. This can foster a dynamic, rather than static, relationship between the leader and his or her world, and encourage shared leadership throughout the organization. Leader from behind—focuses on evoking the brilliance in others by championing them and coaching them through deep listening and powerful questions. It is important for leaders to have the ability to shift from leading from in front to leading from behind by being able to sit down and empower others to take charge. Note that sitting down does not mean sitting back. Leading from behind has tremendous influence and reach. By empowering others,
“leaders from behind” leverage leadership throughout the organization and capture the breadth of talent and creativity available. Leading from beside—coleading consists of dividing responsibilities and a “your-turn, my-turn” way of doing things. Leading from beside is a true partnership, with both people being fully responsible for every part of the initiative. Dynamic and enthusiastic disagreement is an important aspect of leading from beside. There is no one of us (or even a group of us) that has the whole answer to all the challenges we face. The more we are able to engage in enthusiastic disagreement with each other, the more we will be able to uncover the best in ourselves and each other. Leading from the energetic field—there is an energetic field in every organization. Leading from the energetic field is about expanding our attention beyond individual people to connect with the energetic field, using our imagination, instinct, and intuition to access a deeper resonance and knowing than is available from what has already been proven. In leading from the energetic field, we refuse to accept that the only thing that exists is the factual, pragmatic reality right in front of us. To create new ideas that are truly innovative, we must reach into the invisible and unseen with our intuition, instinct and imagination. Which of these expressions of leadership feel the most comfortable and familiar to you? Which one feels most challenging? Practicing expressions that are more unfamiliar will bring agility and range to your leadership. Experiencing and embracing failure is the best leadership practice of all. Why am I focusing on new types of leadership? I am involved in the Imperial Consulting Inc., a partner organization of the European Chamber of Commerce of the Philippines; Imperial Consulting is deeply engaged in leadership training, both in open enrollment and in-house. I suggest you try us in leadership and strategic training, and in executive coaching.
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N January Allianz SE (Singapore Branch) signified its intention to acquire 51 percent of the outstanding capital stock, or 12,750 common shares of stock, of PNB Life Insurance Inc. from the Philippine National Bank (PNB). Pursuant to Section 302 of the Amended Insurance Code and Circular Letter 2014-37, or the Documentary Requirements for the Acquisition of Control of a Domestic Insurance Company, regulatory approval was sought by Allianz in a letter to the Insurance Commission dated January 22, 2016. A month later, after compliance with all regulatory requirements, the Insurance Commission gave its approval. The partnership will operate under the corporate name Allianz PNB Life Insurance Inc. Allianz is a financial conglomerate, founded on May 2, 1890, in Berlin by insurance specialist Carl Thieme and banker Wilhelm Finck, with an initial capitalization of 4 million marks. Thieme had earlier founded Munich Re. By 1893 it had opened an office in London, and soon in the United States, Italy, France, Belgium, the Netherlands and the Balkans. By 1895 Allianz was listed in the Berlin stocks exchange. In 1922 Allianz Life was created, which soon became Germany’s largest life insurer. By 1962
It isn’t time to normalize with Russia yet
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B M C | Bloomberg View
ECENT articles by two of the smartest analysts writing on Russia today argue that it is time to reengage with President Vladimir Putin, following his decision to draw down its military intervention in Syria.
Whether the conditions exist to end sanctions over Ukraine and establish a new working relationship with Russia is the right question to ask—if not, we are guaranteed a repeat of the Cold War. The answer, however, can’t be based on assumptions of good faith. Normalizing relations with Russia now would be premature. Fyodor Lukyanov, who heads Russia’s Council of Foreign and Defense Policy, says nobody should have been surprised by Putin’s decision to decelerate in Syria: Russia said all along the plan was for a short intervention, with the limited goal of securing the survival of the Syrian state. Mission accomplished. Now Russia can sit down with Bashar alAssad’s opponents, and the West should be ready to reengage over Ukraine—for which read, lift sanctions.
Anatol Lieven, a Georgetown University professor based in Qatar, goes a step further in an article headlined: Don’t Fear the Russians. Not only were Putin’s goals always limited in Syria, but so were they in Ukraine, says Lieven. Last year’s Ukrainian cease-fire has largely held. Putin did not give rein to Russian nationalist desires to continue the offensive and recreate the 18th century Russian imperial territory of Novorossiya, because that was never his intent. Yet, this is not as clear as Lieven makes out, and Russia’s leaders do little to reassure that their ambitions pose no further threat to Ukraine or other neighbors. Listen, for example, to Foreign Minister Sergei Lavrov, in an article for the journal Lukyanov edits, Russia in Global Affairs. He, too, makes the case for nor-
malizing relations. Yet, what follows is a lengthy, historical analysis of Russia’s perennial victimization by the West, from the days of Kieven Rus, to Napoleon, the Crimean War and the present. On the start of World War II, for example, Lavrov skips over Stalin’s 1939 pact with Hitler—under which the two men began the war by invading Poland— to blame an anti-Russian plot: Clearly, the anti-Russian aspirations of the European elites, and their desire to unleash Hitler’s war machine on the Soviet Union played their fatal part here. Again, after the collapse of the former Soviet Union, Lavrov’s view of the desperation of the ex-Warsaw Pact countries to join the European Union (EU) and the North Atlantic Treaty Organization (Nato) absolves the former Soviet Union of any responsibility for more than 40 years of occupation: If you take an unbiased look at the smaller European countries, which previously were part of the Warsaw Treaty, and are now members of the EU or Nato, it is clear that the issue was not about going from subjugation to freedom, which Western masterminds like to talk about,
Allianz is a financial conglomerate, founded on May 2, 1890, in Berlin by insurance specialist Carl Thieme and banker Wilhelm Finck, with an initial capitalization of 4 million marks. Thieme had earlier founded Munich Re. By 1893 it had opened an office in London, and soon in the US, Italy, France, Belgium, the Netherlands and the Balkans. By 1895 Allianz was listed in the Berlin stocks exchange.
its premium income exceeded the 1-billion mark with over 50 percent of its premium income coming from motor insurance. In 1973 Allianz became Europe’s largest insurer. Today it is headquartered in Munich, Germany, with a branch office in Singapore. Allianz was originally a transport and accident insurer. Today it operates under the laws of the European Union and the Federal Republic of Germany. Allianz is principally engaged in insurance, reinsurance and asset management. It is a holding company, also called Allianz
Group. As of 2015 it has about 85 million retail and corporate clients in more than 70 countries. It has over 142,000 employees worldwide (as of 2015), with revenues of 125 billion euros and an operating profit of €10.7 billion (about $12 billion). At least 53 percent of its revenues was generated from life and health insurance; 41 percent from property and casualty insurance; and 5 percent from asset management. It generates 34 percent of its business from Western and Southern Europe; 24 percent from Germany itself; 12 percent from the US; and 10 percent from across Asia Pacific, Central and Eastern Europe, Latin America and other growth regions. In terms of shareholder structure, 84 percent of its stocks are owned
but, rather, a change of leadership. There are two questions to separate here. The first is whether the world is better off with Russia inside or outside the tent. That’s easy: inside. The second is trickier. It concerns whether Russia can be a partner in jointly determining the continent’s security, so long as it insists this can only be achieved by eliminating Nato; that membership in the EU is equivalent to occupation by Soviet tanks; that all popular protests are Central Intelligence Agency plots; and that the Western world is reflexively anti-Russian, rather than reacting to actions Russia may have taken. It isn’t obvious that recent developments in Syria and Ukraine have cleared up this second question. Russia’s intervention in Syria, as Lukyanov set out when we spoke weeks after the intervention began last year, was aimed at ensuring that jihadists didn’t topple the regime in Damascus. What remains uncertain, though, is whether Putin’s end-game in Syria is genuinely aligned with that of the United States; namely, to create a power-sharing government in Damascus that protects the security and
interests of Alawites and Sunnis alike. This seems unlikely, simply because it would be so very difficult to achieve and the attempt would require a commitment to democratic principles that Putin doesn’t share. But as I’ve argued before, both the US and Russian goals are unrealistic: It is hard to understand how the fighting ends without some form of soft partition for Syria, at which point the interests of the outside powers can indeed be aligned. If not, Putin may feel the need to restart airstrikes in order to secure the outcome for Assad that he wants. Lieven is probably right that Putin has no desire to invade the Baltic States or Poland; the risks he takes are calculated. Yet he is also unpredictable. Putin has sent strategic bombers into Nato airspace, submarines into Swedish waters, missiles to the Kaliningrad enclave and his own security forces across the Estonian border on a kidnapping raid—all to make his opponents believe that he is ready to escalate to any point. This resolve has not been tested and we don’t know how Putin would respond if it were. In the same way, we don’t know what might have happened had Putin faced no
by institutional investors, while the 16 percent is owned by private investors. The PNB, on the other hand, is the 4th largest private local commercial bank, in terms of assets and deposits, in the country. PNB Life is the 10th-largest life-insurance company in the country. It is chaired by Lucio Tan. A significant feature of the deal is the 15-year exclusive bancassurance agreement, which will give Allianz bancassurance access to PNB’s 660 branches nationwide, or about 4 million customers. With the Commission’s approval, it increased to nine the number of life-insurance companies with bancassurance agreements with Philippine banks. Allianz is not new to the Philippines. It had been in a joint venture partnership with the Pioneer Group to form the Pioneer Allianz Life Assurance Corp. since 1998, until it sold its 50 percent shareholding to Pioneer in January 2003 ending its five-year partnership. Allianz then was not satisfied with the country’s market growth. The withdrawal led to the recreation of Pioneer Life, now a 100-percent Filipino-owned insurer. Dennis B. Funa is currently the deputy insurance commissioner for Legal Services of the Insurance Commission. E-mail: dennisfuna@yahoo.com.
cost to expanding the fight in Ukraine. Nor do we know what would have happened if Russia’s initial efforts to duplicate Crimea’s bloodless coup across “Novorossiya,” from Odessa in Southern Ukraine to Kharkiv in the northeast, had succeeded. The evidence, however, suggests that Putin shaped his military decisions in response to events and setbacks, not out of self-restraint. Lieven also believes Putin has abandoned his plans to build a Eurasian Union to rival the EU and restore Russian influence, which drove his responses in Ukraine. But I see nothing in what he or Lavrov have said or done to give confidence that is true. So, yes, Putin contributed to a ceasefire in Ukraine’s Donbas region. But Russian operatives and military equipment remain in place on Ukrainian soil. Russia continues to control the border and the threat of further offensives and escalation remains. Until that changes and until Russia has fulfilled the requirements for lifting sanctions, they should remain in place. We still don’t know how far Putin is willing to go. He may not either.
2nd Front Page BusinessMirror
A12 Wednesday, March 23 , 2016
MPIC set to bag ₧27.9-B Cebu-Cordova bridge deal
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ONGLOMERATE Metro Pacific Investments Corp. (MPIC) is this close to actually building the multibillion-peso toll bridge in Cebu, after the city council approved the project and allowed the city chief executive to sign the joint-venture agreement with the infrastructure giant. Metro Pacific Tollways Corp. President Rodrigo E. Franco said the group’s presentation of the P27.9-billion Cebu-Cordova Bridge project before the City Council of Cebu went well, the project promptly approved for implementation. “The next step is to sign the joint-venture agreement with Cebu City. It should happen anytime soon, within the month, possibly,” he said in an interview. “The schedule will be set by the Cebu City government, but we’re hoping we could sign it soon.” After signing the agreement with Cebu City Mayor Michael L. Rama, the group will proceed with meeting the conditions set by the Philippine Reclamation Authority and the Toll Regulatory Board. “We have until the end of the year to secure that and, at the same time, we’re going to mobilize already the procurement of a contractor for the detailed engineering and design of the project,” Franco said. Metro Pacific bag ged the project
The schedule will be set by the Cebu City government, but we’re hoping we could sign it soon.”—F through joint venture with the local governments of Cebu and Cordova. But the project will undergo a competitive challenge, as it is an unsolicited proposal. Not a single company has challenged Metro Pacific’s proposal. With the award, the toll-road operator will take on the financing, design, construction, operation and maintenance of the Cebu-Cordova Bridge under an unincorporated joint venture with the
local government units. The project aims to decongest vehicular traffic in the two existing bridges—Marcelo Fernan Bridge and Mandaue Bridge— between Mactan and Cebu, due to the worsening traffic condition in the area. It includes the construction of the connections to Cebu City and Cordova, the main bridge structure, viaduct, causeway, roadway and toll facilities. It is some 7.5 kilometers south of the Mandaue Bridge and will take off from the Cebu South Coastal Road, crossing the Mactan channel to Mactan Island. The project is estimated to cost no more than P27.9 billion, which includes inflationadjusted construction cost over a four-year period, the toll facilities and operating system, the right-of-way cost, as well as financing costs. The project price tag has inflated by as much as P10.9 billion from the original project cost of P17 billion. Funding will be sourced from a combination of loans from local banks and equity contribution. Project construction should start sometime in 2017 and seen completed by 2020. The Cebu-Cordova Bridge is the infrastructure conglomerate’s first bridge project and the first toll-related deal outside Metro Manila. The toll-road company is the parent firm of Manila North Tollways Corp., the operator of the North Luzon, Subic-Clark-Tarlac, Manila-Cavite Toll, and the soon completed Cavite-Laguna expressways. MPIC has similar significant interests in thoroughfares outside the country, particularly in Thailand and Vietnam.
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Global stocks fall after blasts in Brussels airport, subway
PEOPLE walk past an electronic stock board showing Japan’s Nikkei 225 at a securities firm in Tokyo on Tuesday. AP
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LOBAL shares were mostly lower on Tuesday, with European shares all in the red in early trading, after explosions ripped through the departure hall at Brussels airport and a subway station. Britain’s FTSE 100 fell 0.9 percent to 6,127.59. France’s CAC 40 was down 0.8 percent to 4,391.05. Germany’s DAX fell 0.9 percent to 9,859.45. Wall Street looked set for a weak start, with Dow futures down 0.4 percent at 17,451.00, while S&P futures fell 0.6 percent at 2,029.90. Explosions rocked the Brussels airport and the subway system on Tuesday, killing at least one person and injuring many others just days after the main suspect in the November Paris attacks was arrested in the city, police said. Japanese shares rose as the yen weakened, despite the release of a preliminary survey showing a deteriorating outlook for manufacturing in March. Contrary to expectations of an improvement, the Nikkei“flash”purchasing managers index fell to 49.1 from 50.1 last month. It was the first dip below the
50 level dividing expectations of expansion versus contraction since April 2015. “Trading is likely to be quiet in the run up to Easter. Markets will be looking at data from Europe and China this week for cues,” Alex Furber of CMC Markets said in a client note. Japan’s Nikkei 225 climbed 1.9 percent to 17,048.55. Hong Kong’s Hang Seng index shed early gains to shed 0.1 percent at 20,666.75. South Korea’s Kospi gained 0.4 percent to 1,996.81 and Australia’s S&P ASX 200 edged up 0.1 percent at 5,230.80. The Shanghai Composite Index shed 0.6 percent at 2,999.36. Southeast Asian markets were lower. Benchmark US crude lost 7 cents to $41.45 a barrel in New York. On Monday, it rose 38 cents, or 1.2 percent, to close at $41.52 a barrel. Brent crude, the benchmark for international oils, fell 6 cents to $41.48. It gained 34 cents on Monday, closing at $41.54 a barrel in London. The dollar fell to ¥111.71 from ¥112.08. The euro fell to $1.1202 from $1.1242. AP