IN this April 21, 2016, file photo, US Deputy Secretary of State Antony Blinken (left) is seated with US Ambassador to Vietnam Ted Osius during his visit to Vietnam National University in Hanoi, Vietnam. Blinken on Thursday questioned China’s intentions with its massive land-reclamation project in the South China Sea during his visit. AP/TRAN VAN MINH
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IN this December 19, 2015, file photo, President Barack Obama is greeted by Commander of the US Pacific Command Adm. Harry Harris after arriving at Joint Base Pearl Harbor-Hickam in Honolulu, Hawaii. Harris has denied reports of a disconnect with the White House in strategy over the South China Sea. AP/EVAN VUCCI
IN this April 18, 2016, file photo, Chinese Foreign Minister Wang Yi (left) stands with Russian Foreign Minister Sergey Lavrov after a meeting in Moscow, Russia. Speaking on the South China Sea, Lavrov, meeting with his Chinese counterpart in Moscow, says Russia is against any interference from third parties—a reference to the US—or any attempts to internationalize these disputes. Story on A4. AP/IVAN SEKRETAREV
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BUSINESSMEN WANT PPP ACT ON 17TH CONGRESS’SPRIORITY AGENDA
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HE country is now experiencing what Andre C. Palacios, the executive director of the Public-Private Partnership (PPP) Center, tagged as an infrastructure gap.
If we do not act now, the gap may turn into an infra crisis.”—P
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INSIDE
‘THE COUSINS’ ON KITCHENS THIS April 24 photo shows a public-utility vehicle in Pasay City bearing photographs of a family of traditional politicians who are also campaigning for the 2016 national elections. The Constitution of the Republic of the Philippines generally prohibits political dynasties, “as may be defined by law.” NONIE REYES
LIFE
“The State shall guarantee equal access to opportunities for public service and prohibit political dynasties, as may be defined by law.”—Article 2, Section 26 of the 1987 Constitution
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| TUESDAY, APRIL 26, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana
MEGAWORLD BAGS MORE AWARDS Megaworld, the country’s largest developer of integrated urban townships, has won Bronze for Best CEO and Gold for Best Communications & Investor Relations Team at The Global Good Governance Awards 2016. Megaworld Foundation, meanwhile, bagged the Gold for Excellence in Provision of Literacy & Education Award at The Global CSR Awards held simultaneously in Bali, Indonesia, on Thursday night. Receiving the awards are Jennifer Romualdez, first vice president of Global-Estate Resorts Inc.; and Harold C. Geronimo, assistant vice president and head of public relations and communications of Megaworld.
RAFA IN HARNESS B Rafael Nadal added the Barcelona Open title to his trophy from Monte Carlo last week, as the 14-time Grand Slam winner regains form on his favorite surface ahead of next month’s French Open.
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OLORADO SPRINGS, Colorado—There was no stuffed animal to hug. Constant hunger pains. Hope a mom would show up and rescue her. Those were some of the memories that flooded back when Paralympian Oksana Masters recently returned to Ukraine, where she spent her first seven-and-a-half years shuttled among three orphanages. Masters visited with orphaned children that stared at her with an “Are you here to adopt me?” gaze. Two decades ago, that face was hers. She was adopted by an American woman who took in a malnourished Masters with birth defects believed to be from the aftermath of the Chernobyl nuclear reactor accident. On the 30th anniversary of Chernobyl this week, Masters is now in a much different place. She’s become a three-time Paralympic medalist in rowing and cross-country skiing, with her sights now set on making the cycling squad for the Rio de Janeiro Paralympic Games later this summer. She’s appeared in ESPN The Magazine Body Issue. Above all else: She has a mother. “My mom literally saved my life,” the 26-year-old Masters said recently before a training session at the US Olympic Training Center. “I wasn’t supposed to make it out of the orphanage.” Her journey began because of a black-and-white photo that Gay Masters saw through a Ukrainian adoption notebook. That picture of Oksana—circa age 5—captured the heart of a speech pathologist who was teaching in Buffalo, New York, at the time. Oksana was born with webbed fingers, no thumbs, six toes on each foot, deformed legs, one kidney and only parts of her stomach. She was perfect. The match was perfect. Adopting her, though, was quite a saga. With the Ukrainian government placing a moratorium on foreign adoptions, Gay Masters had to wait two-and-a-half years to bring her home. She sent care packages all the time, stuffed with teddy bears and other treats. The little girl never got them. She simply thought she was on her own again. That is, until one night at 11:30 p.m., with all the paperwork finally approved, Gay arrived to take her new daughter home.
RAFAEL NADAL wins his ninth Barcelona Open and equals claycourt record, while Angelique Kerber defended her Porsche Grand Prix title in Stuttgart. AP
ANOTHER CHANCE AFTER CHERNOBYL
PARALYMPIAN Oksana Masters prepares her hand-cycle during training at the Olympic Training Center in Colorado Springs. AP
“The adoption agency kept saying, ‘You can go to Russia and get a baby now,’” Gay said in a phone interview from her home in Louisville, Kentucky, where they moved when Oksana was a teenager. “But that was my daughter. I couldn’t abandon her.” At the time, the child weighed about 35 pounds— healthy for a 3-year-old, not so much for someone who was nearly 8. “I know friends who didn’t make it out and died,” she said. “I watched that.” The new mom and daughter didn’t speak the same language but found a way to communicate through gestures and by pointing at phrases in a book. It didn’t take long for them to get on the same page and settle into their new life. It was around that time when a dentist discovered the root cause of Oksana’s birth defects. She was missing the enamel from her teeth due to radiation. Being from the region near Chernobyl, it wasn’t hard to make the connection with the world’s worst nuclear accident, which occurred on April 26, 1986. They believe her birth mom either lived in an area that was contaminated or ingested produce that was riddled with radiation, leading to in utero radiation poisoning. “As a child, I didn’t think about [Chernobyl] because I didn’t know what it was. Being older and educated more what it was, knowing now how it is still affecting that whole area, it’s just jaw dropping,” said Oksana, who’s from Khmelnytskiy in western Ukraine. She was born with tibial hemimelia, which resulted in different leg lengths. She got by as a child by fusing her ankles so she walked on tippy toes, but her body could no longer support her weight. She had her left leg amputated near the knee at 9, and the right one at the same spot five years later. AP
ARCELONA, Spain— Rafael Nadal beat defending champion Kei Nishikori, 6-4, 7-5, to win the Barcelona Open for the ninth time on Sunday, equaling Guillermo Vilas’s record of 49 career clay-court titles. Nadal added this title to his trophy from Monte Carlo last week as the 14-time Grand Slam winner regains form on his favorite surface ahead of next month’s French Open. “I’m very happy because besides this being one of the most important tournaments that I have won, this is another week that I am playing very well,” Nadal said. “These have been two fantastic weeks, weeks I have been striving for for a long time.” Nishikori had won the tournament for the last two years after early exits by Nadal. In an entertaining clash of the two top-seeded players, Nadal proved more decisive under pressure, saving seven of eight break chances in the first set while converting the two chances he got. The Spaniard then bettered second-seeded Nishikori through several superb rallies in a back-and-forth second set to win key points and claim his 69th career title in his 101st final. “I was playing against the No. 6 player in the world, and if you don’t play at your best you aren’t going to win,” the fifth-ranked Nadal said. Besides matching Vilas’s Open Era milestone from the 1970s and 1980s, Nadal added Barcelona to his list of tournaments he has won a record nine times, along
SPORTS
HARU IN DALY DREAM COME TRUE L
IEGE, Belgium—Dutch rider Wout Poels attacked near the end and held off Swiss veteran Michael Albasini to take the Liege-Bastogne-Liege classic on Sunday, the biggest win of his career. With four riders left in the home stretch on slippery roads, the 28-year-old Poels pulled away with about 250 meters to go, and the Team SKY rider had enough of a lead to sit up in his saddle and raise his arms as he crossed the line. Poels became the first Dutchman to win the race since Adri van der Poel in 1988 and fifth overall. “It’s amazing to win Liege, it’s like a dream come true after my bad crash of [four] years ago,” said Poels, who ruptured a spleen and kidney and broke three ribs after crashing on the Tour de France in 2012. “Liege is a monument I would watch on TV when I was a child. To win it is incredible.” Albasini finished ahead of Portuguese cyclist Rui Costa, with 2008 Olympic road-race champion Samuel Sanchez of Spain crossing in fourth place. “Poels was just the strongest today, we were all tired,” Albasini said. “I should have attacked earlier.” Spanish rider Alejandro Valverde, meanwhile, was looking to win
the Ardennes double for a second year after his midweek victory in the Walloon Arrow, but finished out of contention in 16th place. A group of eight riders led for most of the 248-kilometer (154-mile) course, which was shortened by 5 kilometers (3 miles) due to snow and heavy rain along the route. “It was a really hard day due to the weather. You had to keep warm and I had prepared well to cope with that, especially in terms of clothing,” Poels said. “You always dream of winning a race like this one, but to do it in these conditions is even more special.” Two-time Tour de France champion Chris Froome—who is not a classics specialist— overcame a minor spill to finish in 112th place, while Italian rider Vincenzo Nibali, the 2014 Tour winner, placed 51st. With about 30 kilometers to go, only Frenchman Nicolas Edet and Alessandro de Marchi were left out in front. In driving rain, they managed to reach the top of the Col de la Redoute together, but were caught soon after. Valverde was among the race favorites, having become the first rider to win the Walloon Arrow four times after racing to a third straight title on Wednesday. He had his eyes set on a fourth win here, too, on the eve of his 36th birthday. Inside the last 20 kilometers, he urged his teammates to accelerate but Valverde struggled near the back of the group when some 20 riders entered the last few kilometers and he finished 12 seconds behind Poels. With 1 kilometer left, Albasini attacked first, with Costa, Sanchez and Poels just behind him. But Poels timed his attack just right to win the grueling race in six hours, 24 minutes and 29 seconds. “I decided to go flat out after the last corner,” said Poels, who is also a support rider for Froome on Grand Tours. AP
Sports
with Roland Garros and Monte Carlo. No other player has won a tournament nine times. “This is truly special, I don’t know if it is repeatable,” Nadal said about his records. “If I have done it, it is possible, but it will be truly difficult. I have won titles nine times, and won so many titles on clay and in tough tournaments. I am very satisfied for Barcelona to join this group of nine.” After losing to Fabio Fognini in the round of 16 last year, Nadal blamed his poor forehand. A year later, all Nadal’s power was back on display, driving forehand strokes past Nishikori when it really mattered. Playing near their best, both top 10 players never let the other settle in while serving. Level at 3-3 in the first set, Nishikori had three break points, but Nadal saved them all by winning five straight points. Nadal earned a second break to claim the first set when the Spaniard won with a shot which clipped the top of the net. Nishikori immediately responded by rallying from 0-40 down to break Nadal’s first service game of the second set. Nadal answered with a hard-fought game—which included two superb rallies won by the home favorite at the net—to recover the break. Nishikori got back in the match after Nadal misjudged a ball that he thought was going wide when he could have smashed it. The ball fell in, and Nishikori broke Nadal with an unreachable drop shot for 4-3. Nishikori then landed another risky drop shot to save a championship point and make it 5-5, but Nadal claimed victory two games later when the Japanese sent the ball into the net. In Stuttgart Angelique Kerber defended her Porsche Grand Prix title with a comprehensive 6-4, 6-0 win over qualifier Laura Siegemund in Sunday’s all-German final. Siegemund made a great start and went 3-0 up in nine minutes, but Kerber recovered and converted three of her five break opportunities to take the first set in 39 minutes at the indoor clay-court tournament. The Australian Open champion started the second set with a break and capitalized on a host of unforced errors from Siegemund—playing her first final in her hometown—to wrap up the match in 81 minutes with her first match point. “It doesn’t get any better. I needed a bit of time to find my rhythm and I’m happy I managed it in the end,” Kerber said. It was the ninth career win for the second-seeded Kerber, and the first time she had successfully defended a title. The 71st-ranked Siegemund bettered her previous best finish, a quarterfinal on clay at Charleston this month. She had seen off top-seeded Agnieszka Radwanska, fourth-seeded Simona Halep and sixthseeded Roberta Vinci and didn’t drop a set in reaching the final. She’ll reach a career-high 42nd place in the rankings on Monday. “I’m really tired and I know I can play much better,” the 28-year-old Siegemund said. “There is no situation in tennis in which you play more games than at a tournament, and at some stage, the limit is reached.” AP
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JAPAN’S Haru Nomura wins the Swinging Skirts Ladies Professional Golf Association Classic. AP
The 23-year-old Japanese closed with a one-over 73 in steady 35-40 mph wind at Lake Merced to finish at nine-under 279 and beat South Africa’s Lee-Anne Pace by four strokes.
WOUT POELS: Liege is a monument I would watch on TV when I was a child. To win it is incredible.
GOT THIS!
Los Angeles Dodgers right fielder Yasiel Puig holds up his glove to show that he caught a fly ball off the bat of Colorado Rockies’ Brandon Barnes to end the bottom of the fourth inning of their Major League Baseball game on Sunday in Denver. The Dodgers won, 12-10. AP
HARU DALY D in
ALY CITY, California—Haru Nomura held on in strong wind to win the Swinging Skirts Ladies Professional Golf Association (LPGA) Classic on Sunday for her second LPGA Tour victory of the year. The 23-year-old Japanese closed with a one-over 73 in steady 35-40 mph wind at Lake Merced to finish at nine-under 279 and beat South Africa’s Lee-Anne Pace by four strokes. “It wasn’t the windiest conditions I’ve ever played in, but it was certainly up there, but also temperature-wise, I thought it was one of the coldest days,” Nomura said. “Everybody same situation today, so I try my patience. I picked up my patience.... I feel so cold, but I also feel happy.” Nomura won the Australian Women’s Open in February, pulling away to beat top-ranked Lydia Ko by three strokes for her first LPGA Tour title. “When I came into this year, I had two goals. That’s to win an LPGA tournament and also win an LPGA major tournament,” Nomura said. “Now I’ve won two tournaments [in the] LPGA this year, so I
‘Laws of Baseball’ L fetches $3 million
P-Noy beats Arroyo in OK’d projects
think my goal now is to win a major.” After birdieing the par-5 sixth to reach 11 under, Nomura bogeyed four of the next five holes. She rebounded with a speeding 70-foot birdie putt on the par-3 12th. “That putt rolled on a line. I felt 100 percent it would go in,” Nomura said. “When it did go in, I thought, ‘I’m winning.’” She added another birdie on 14 and offset a bogey on 16 with a birdie on 17. “I like tight courses,” Nomura said. “You guys will find this strange, but I like windy situations. I like playing in the wind. I like tough situations, so when I spoke to the caddie [Jason McDede], even before the championship last week in Hawaii, I told him, ‘I’m going to come here and win this tournament because I really like this course. I enjoy this course.’” Nomura was projected to jump from 36th to 23rd in world ranking. She joined Ko and Ha Na Jang as the only two-time winners this season. The Japanese player had a rules scare on Saturday. After her third-round 71, she met with rules officials to examine her play from an awkward stance on a slope in a bunker on the par-5 sixth hole. The officials decided no penalty was warranted for building a stance, leaving her with a par instead of a double bogey. Pace bogeyed the first five holes in a 74. “I don’t think after five holes I was thinking about smiling,” but after I made a few birdies, yeah. It was definitely tough out there, but Haru played amazing golf. She was very steady.... “It was freezing. It was very, very gusty. A lot of the shots you stood over and it was just really, really difficult to commit to the lines. It was a very tough day.” Ko shot a 75 on her 19th birthday to tie for sixth at one under. The New Zealander won the tournament the previous two years. “If I was half my weight, I’d probably already be flying away like a balloon,” Ko said about the wind. “It was just tough today straight out of the bit. I came out here to warm up, and it was blowing. It didn’t seem like it was going to settle down any time soon, so just even a wedge shot was tough.” Gerina Piller and Na Yeon Choi tied for third at four under. Piller shot a 73, and Choi had a 75. Piller’s husband, Martin Piller, tied for fourth earlier Sunday in the Professional Golfers’ Association Tour’s Texas Open. “Nothing makes me more happy than to see him succeed,” Piller said. “It’s just something we love to do, and we’re in a situation that we’re playing on the top tours in the world, so it’s pretty cool.” So Yeon Ryu, the first-round leader after a tournament-record 63, was fifth at two under after a 75. Brooke Henderson joined Ko in the group at one under after a 76. The 18-year-old Canadian extended her top-10 streak to eight events. Third-ranked Lexi Thompson (71) also was one under along with Jenny Shin (72) and Mi Jung Hur (74). Michelle Wie withdrew because of neck spasms after playing the first 15 holes in 11 over. Wie was 16 over after opening with rounds of 73, 73 and 75. She’s winless since the 2014 US Women’s Open and hasn’t had a top-10 finish in 33 events. Last year she struggled with left hip and ankle injuries. In 2014 she fought a stress fracture in her right hand. AP
SPORTS
OS ANGELES—Documents that baseball historians have called the Magna Carta of the game have sold at auction for nearly $3.3 million. SCP auctions says the 1857 papers called the “Laws of Baseball” sold early Sunday to an anonymous buyer after more than two weeks of bidding. The auction house had predicted prior to the auction’s April 7 start that they could sell for more than $1 million. The anonymous seller hadn’t realized the value of the papers he purchased in Texas for $12,000 in 1999. It was only when the auction house appraised them that their significance became clear. The documents thoroughly change the early history of baseball, making Daniel Lucius “Doc” Adams the proper father of the modern game, and putting its birth date three years earlier than had been expected. Adams may never be a household name like baseball’s imagined inventor Abner Doubleday or basketball’s actual inventor James Naismith. But the newly verified set of documents go a long way toward lifting him to legendary status. They lend him credit for the distance of the base paths at 90 feet, the length of the game at nine innings and the size of a team at nine players, all in 1857, three years earlier than previously thought. Here’s a closer look at baseball’s new-old daddy. Adams was an actual physician, whose father was also a doctor. He was born in 1814 in Mont Vernon, New Hampshire, and went to Amherst College and Yale University as an undergraduate before moving on to Harvard Medical School. He first went into practice with his father in his hometown before setting out on his own in Boston, then New York. He practiced medicine and played baseball simultaneously into the 1860s, when he married, had five children and served as a Connecticut state legislator. AP
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RESIDENT Aquino is ending his term in June with P1.63 trillion worth of projects approved by the National Economic and Development Authority (Neda) Board, which he chairs, according to government data. Based on Neda data obtained by the BusinessMirror, the cost of projects approved under the Aquino administration was higher by P3 billion, compared to the total project approvals during the six-year term of President Arroyo.
PESO EXCHANGE RATES n US 46.5780
₧1.63T Total cost of projects approved under the Aquino administration
Neda Board approvals under the current administration include many big-ticket infrastructure projects, the biggest of which are the P170.7-billion North-South Railway
Project (NSRP)-South Line and the P117.3-billion North-South Commuter Line Project Phase 1. The NSRP is being funded through the public-private partnership scheme and involves commuter and longhaul railway operations. Commuter railway operations will be from Tutuban to Calamba, while long-haul operations will stretch all the way to Legaspi City. The North-South Commuter Line Project Phase 1, meanwhile, involves the construction of a 36.7-kilometer narrow-gauge, elevated commuter
@elefantefil
Second of three parts
E pushed hard; but his effort was not enough. If Christian S. Monsod had his way during the 1986 Constitutional Commission, the provision banning political dynasties would not have been included in the 1987 Constitution. “We should give our people full choice,” Monsod told members of the Constitutional Commission. “Let them run, and let the people decide. That is the essence of suffrage.” Immediately after making that statement, he moved to have the section prohibiting political dynasties deleted once again. He also reminded the body that they have already decided against including the political-dynasty ban from the Constitution’s Article on Local Governments. “This body has already made a decision on the same point, and, second, for the reasons I have stated, I do not think we should curtail the right of the people to a free choice on who their political leader should be,” Monsod said. Another member of the Constitutional Commission, Jose N. Nolledo, responded. “I would like to comment on the assertion of Commissioner Monsod that this was already adequately discussed,” Nolledo said. “The issue, at that time, was whether to authorize Congress to include in the Local Government Code a provision against political dynasty. And the issue here now is whether to put that as a declaratory principle.” Blas F. Ople, another member of the Constitutional Commission, then asked Nolledo whether political dynasties were a cause or an effect of the “lopsided socioeconomic system in the countryside, where the advantage of birth favored those more likely to fall in the category of dynasties,” as Nolledo called them. C A
S “P,” A
n JAPAN 0.4165 n UK 67.3937 n HK 6.0054 n CHINA 7.1642 n SINGAPORE 34.3648 n AUSTRALIA 35.8278 n EU 52.2605 n SAUDI ARABIA 12.4208
Source: BSP (25 April 2016 )
BMReports BusinessMirror
A2 Tuesday, April 26, 2016
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Banning political dynasties: The beginning C A
“The reasons groups of families rotate power only among themselves is that they were the only ones with the means for sustaining political campaigns, is that not correct?” Ople asked. “Yes, the commissioner is correct,” Nolledo replied. “In that sense, therefore, socalled dynasties are the effects rather than the causes of an imperfect social and economic system, especially in the countryside,” Ople said. “That is a factor to be considered,” Nolledo answered. Ople also asked that, “if political dynasties were the effect rather than the causes of prevailing and traditional social structures that maldistribute opportunities, should this commission not attack the causes rather than the effects?” Then he suggested that the word “dynasty” was probably being misapplied to distinguished political families. He mentioned the political families of Cojuangco and Aquino in Tarlac, the Padilla family in Manila and Pangasinan, the Rodrigo family in Bulacan, the Laurel family in Batangas, the Sumulong-Cojuangco family in Rizal and the Calderon family in Nueva Vizcaya. “We see lots of evidence that, in fact, people disadvantaged by the accident of birth have, indeed, risen through their own efforts to become successful competitors of entrenched political dynasties in their provinces and cities,” Ople said. Ople also asked Nolledo if the right of suffrage should not be abridged. He explained that the right to vote and to be voted upon was derived from the same concept of the right of suffrage. Nolledo denied that his pro-
posal did not infringe upon the right of suffrage. “We only regulate the right of some people to run because we want to equalize the conditions between the poor and the rich candidates,” Nolledo said.
Pros and cons
COMMISSIONER Serafin Guingona rose to support Nolledo. Guingona noted that the provision on political dynasties would be more acceptable to the commission if the word prohibit was changed to regulate and that the phrase, “as provided by law,” be added. Commissioners Rene Sarmiento and Minda Luz Quesada then rose to speak in favor of the section banning political dynasties. Commissioner Florangel Rosario Braid then asked Nolledo if the prohibition on political dynasties would lead to the development of a pluralistic society and widen political opportunities. Nolledo answered: “Yes.” Monsod then rose in defense of the deletion. The matter was called for a nominal voting on the motion to delete t he prohibition on political dynasties. According to the minutes of the Constitutional Commission, there were at least two roll calls made to settle the matter. The motion to delete the prohibition was turned down by one vote. Seventeen voted to delete the prohibition, while 18 voted for retention. Commissioner Hilario Davide abstained. Monsod disagreed with the result and asked for a revote while moving to have recess for lunch. The session was suspended 48 minutes past noon.
Resumption
ONCE the session resumed midafternoon, Sarmiento quickly opposed Monsod’s motion.
However, Davide, who had abstained in the previous vote on the political-dynasty ban, sided with Monsod’s call for another vote on the issue. Davide added that Monsod’s motion was in order. The presiding officer, Commissioner Efrain Treñas, then called for a vote on Monsod’s motion. Commissioner Quesada questioned the ruling, prompting the presiding officer to say, “Let the whole commission decide this matter.” At 3:13 p.m., Monsod then asked to have the session suspended for a few minutes. Quesada granted Monsod’s motion. W hen the session resumed at 3:27 p.m., Sarmiento told the presiding officer that Monsod’s motion was “improper.” Sarmiento explained that, under the rules being used by the Constitutional Commission, its members were not allowed to change their vote. Monsod responded by withdrawing his motion to call for another vote. “In the interest of the body, so that we do not exacerbate the situation, I would like to withdraw my motion,” Monsod explained.
The Davide compromise
DAVIDE offered a compromise. He suggested that the word “broaden” be changed to “ensure equal access to.” “Then instead of ‘office, I propose to substitute the same with the word ‘service,’” Davide explained. “So the entire section will read: ‘The State shall ensure equal access to opportunities to public service and prohibit political dynasties.’” “If we change ‘office’ to ‘service,’ we would refer to both elective and appointive positions,” Davide said. “And political dynasties do not necessarily apply to elective positions alone. They would
include appointive positions and, perhaps, more on the latter because it is easier to get a political appointment if somebody close to the family is an elective official, but it is difficult to have a political dynasty on the basis of election because election is an expensive exercise.” “I changed the word ‘broaden’ to ‘ensure equal access’ because what is important would be equal access to the opportunity,” he added. Davide’s motion was accepted. But the bitter fight over the constitutional ban on political dynasties was not over.
Delete a phrase
CONSTITUTIONAL Commissioner Francis Rodrigo rose and proposed that the phrase “and prohibit political dynasties” be deleted. Another commissioner, Yusuf Abubakar, seconded Rodrigo’s motion. The presiding officer asked Davide to comment on the motion. Davide declined to offer a comment. “I would rather leave it to the commission, Mr. Presiding Officer,” Davide replied. Nolledo immediately opposed Rodrigo’s motion.
Technicalities raised
RODRIGO quickly responded to Nolledo’s objection. “That is an amendment to the amendment which was neither accepted nor rejected,” Rodrigo replied. “The proponent [Davide] says that he would rather leave it to the body.” Guingona then took the floor. “ Yes,” Guingona said. “But would that mean that if it is deleted, we will not be able to introduce further amendments along this line not exactly in the same words but still referring to political dynasties, Mr. Presiding Officer?” Nolledo then raised a point of order.
“We have already decided to retain these words, including prohibition against political dynasty, as stated,” Nolledo said. “There was a move to delete the provision and the substance of the provision is found in the term ‘political dynasties.’ The intention of the committee is to prohibit political dynasties and, therefore, this intention must be correlated with the entire provision. Therefore, the motion of Commissioner Rodrigio is out of order.” Rodrigo disagreed. “My motion is not out of order because what was voted down was the deletion of the whole section,” Rodrigo replied. “And now, there is a reworded proposal, and I am asking for a deletion of a portion of the reworded proposal.” “There is a difference,” Rodrigo explained. “After the motion to delete the whole section was voted down, this amendment by substitution was submitted. And my amendment to the amendment is to delete a portion of the amendment by substitution. So that is not res judicata, if we were to use a judicial term.” Nolledo continued contesting Rodrigo’s proposed amendment. “The very life and substance of the provision is found in the word s ‘proh ibit pol it ic a l dynasties’ and I think it was in that sense that the commission voted in favor of retaining the provision,” Nolledo said.
The rules
BECAUSE of the points raised by Rodrigo and Nolledo, the members of the Constitutional Commission’s focused their discussion on their rules. Regaldo Maambong, another member of the Constitutional Commission, explained that Nolledo’s point of order was covered under Section 50 of the commission’s rules, which read: “A motion to strike out being lost shall not
preclude an amendment or motion to strike out and insert.” “That is precisely the reason the committee and the chairman allowed Commissioner Davide to introduce an amendment, because if it were not allowed and if we were to follow the point of order raised by Commissioner Nolledo, there is no point of Commissioner Davide standing up and amending the particular section not deleted by the decision of the body,” Maambong explained. “So the amendment of Commissioner Rodrigo is quite valid because of Section 50.”
No compromise
NOLLEDO remained adamant in his objection. He refused to concede. “I would like to say that the motion of Commissioner Rodrigo is really a motion to delete the very life of the provision,” Nolledo said. “So he is restating the original motion, which was already defeated.” Rodrigo disagreed. “No, Mr. Presiding Officer,” Rodrigo said. “The substance of the provision, even before the amendment, is to broaden the opportunities to public office.” “That is not the substance,” Nolledo immediately replied. “This matter of political dynasty is just a colatilla and in the reformulated amendment by substitution, the substance is also to broaden opportunities to seek public office,” Rodrigo answered. “As a matter of fact, I am asking for the deletion of ‘and prohibit political dynasties’ because, by prohibiting political dynasties, we do not broaden but restrict opportunities for public office. That phrase is even incompatible, inconsistent with the very substance of the proposed amendment.”
Lost and confused
QUESADA then took the floor. “Parliamentary inquiry,” Quesada said. “Can we ask our parliamentarian, Commissioner Maambong, to clarify for us ‘nonparliamentarians’ who are getting confused with the rigmarole of rules that are being used?” Quesada added that she and several of the commissioners were getting “lost somehow in the process of the discussion.” Maambong turned to the presiding officer and was granted permission to explain. “Mr. Presiding Officer, let us translate the rules into simple terms,” Maambong said. “We have a formulation presented by the committee. Then there was a motion to delete. The motion to delete was lost. What is the effect? We are back to square one.” “We still have the formulation of the committee, which is now subject to amendment, and that is exactly what we are doing,” Maambong explained. “When the motion to delete was lost, the original formulation of the committee remains on record and it is now subject to amendment.” Maambong pointed out that, when the motion to delete was lost, it did not preclude an amendment or motion to strike out and insert. “Meaning, we are back to square one,” he said. “We still have the original formulation of the committee, which is now subject to amendment.” Quesada asked if the basic concepts in the proposed provision could be changed. “We can change the concept; we can even change the whole provision because we are now open to amendment—we call it primary amendment—because the original provision is now back in the committee report, since the motion to delete was lost,” Maambong answered. Despite Maambong’s efforts, the matter was not immediately settled. To be continued
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Tuesday, April 26, 2016
A3
PamCham pushes for Clark railway link to Regions 1, 2, 3 and Cordilleras B A M
C
@ashleymanabat
LARK FREEPORT—The Pampanga Chamber of Commerce and Industry Inc. (PamCham) is pushing for a railway system that will link this freeport to Regions 1, 2, 3 and the Cordillera Administrative Region (CAR). In letter to Regional Development Council (RDC) Chairman Gov. Wilhelmino Sy-Alvarado of Bulacan, dated April 18, Renato G. Romero, PamCham vice chairman, said the proposed railway system will “facilitate the fast and easy access” of passengers in the north to the Clark International Airport (CIA). “I…humbly propose to the government, and for the RDC III’s support, the construction of a North Quad Railway System that will link Clark to Regions 1, 2, 3 and CAR,” Romero said. The businessman said railway system, once completed, will also significantly contribute to the full development of the CIA. CIA’s declaration as a premier gateway to the Philippines has been a long-standing advocacy of PamCham, he added. “Unfortunately and for reasons we fail to fathom…despite the airport’s many attributes that, by all sense and logic, makes it an
ideal international portal to the country, it has yet to be declared as such,” Romero lamented. “We continue to hope, however, that somehow, someday—sooner rather than later—this aspiration will, indeed, become a reality.” R omero s a id Pa mC h a m i s supporting the principle that “C l a rk ’s development shou ld parallel the Ninoy Aquino Inter n at ion a l A i r por t ’s [Na i a] because, admittedly, Manila is, and will always be, the center of trade, commerce and finance.” A s an added bonus, Romero said, having Clark as a twin airpor t facilit y w il l “considerably re l ie ve congest ion i n Met ro Manila, improve the qua lit y of its living conditions and, at the same time, contr ibute to the spread of g row th and progress nor thward.” PamCham has recently declared its support behind the Advocacy for the Dual Airport Priority, which calls for a dual
CLARK International Airport Corp. (CIAC) President and CEO Emigdio Tanjuatco III (right) listens intently as CIAC Vice President Darwin Cunanan of the Commercial and Business Development Group discusses the features of the CIA with representatives of foreign airlines who visited the airport on Saturday. The foreign airline representatives are among the delegates attending Routes Asia 2016, which was held at the SMX Convention Center from March 6 to 8. Routes Asia is an event for aviation-based companies, such as airlines, airports and tourism authorities, as well as some of the largest carriers who wish to conduct business to, from and within the Asian region. Seven foreign airlines will meet with CIAC officials at the Routes event, as they are considering the Clark airport as a new destination. CIAC-CORPORATE COMMUNICATIONS OFFICE
airport system in tandem with Naia. “It is my belief that efforts at promoting Clark ’s fundamental advantages as an international gateway must not wane, but rather be intensified to keep it within the ambit of awareness, not only of the national leadership—both the current and incoming administrations—but of the international community, as well,” he added. Romero said it is more sensible to take advantage of the local population-catchment area of Regions 1,2,3 and CAR currently estimated at 23 million. He said this is enough to sustain CIA’s
operations and maximize the utilization of its facilities, considering that CIA is considered one of the biggest aviation complexes in Asia with two runways in parallel configuration that can easily be extended to 4 kilometers to accommodate the new-generation wide-bodied aircraft.” R ome ro s a id t h i s i s e ve n more sig nif icant g iven the current sit u at ion where C l a rk ’s potent i a l i s h i ndered b y it s d i st a nce f rom Ma n i l a , add i ng t h at t he prov ision of a c r it ic a l ra i lw ay s y stem t h at w i l l l i n k it to Na i a m ay, a s of yet , be “a not her w i sh f u l t h i n k i ng.”
It is my belief that efforts at promoting Clark’s fundamental advantages as an international gateway must not wane, but rather be intensified to keep it within the ambit of awareness, not only of the national leadership—both the current and incoming administrations—but of the international community, as well” —R
to start money-laundering case EY poll: Executives still DOJ vs RCBC manager, junket operator hungry for M&As after T record deals in 2015 B $627.8B B J R. S J
ELIEVE it or not, companies still want to make deals. Half of executives expect to pursue acquisitions in the next 12 months, and 40 percent aim to boost sales through partnerships, according to EY’s Global Capital Conference Barometer, a survey of more than 1,700 executives in 45 countries. W hile that’s dow n from t he 59 percent of pa r t ic ipants who were ant icipating mergers and acquisitions (M& A s) in the October report—when dea l-making was on its way toward hitting a peak that would ultimately ra ke in $3.6 tr il lion of acquisitions—low grow th and volatile markets have companies look ing for ways to boost earnings and diversify. “Prolonged economic challenges are driving investment decisions, leading companies to ally and cooperate to generate growth,” Pip McCrostie, EY’s global vice chair of transaction advisory services, said in the report. “M&A remains a strong option to accelerate strategic plans and offer the prospect of game-changing competitive advantage.”
Assets on sale
TO be sure, the numbers so far are pointing to a slower year
International buyers
The value of global M&A deals in the first quarter, down 10 percent
for deals. Global M&A activity in the first quarter dropped about 10 percent from a year earlier to $627.8 bil lion, according to data compiled by Bloomberg. T he UK’s threat to leave the European Union has damped dea ls there. More d if f icu lt f inancing m a r k e t s a n d g e o p o l it i c a l r isks cou ld a lso be ma k ing wou ld-be buyers cautious. Still, uncertainties in the market may, ultimately, work in acquirers’ favor when it comes to the price for assets, EY said. Most executives said the gap between buyers’ and sellers’ valuations are down to less than 10 percent, an improvement from six months ago. More than a third of those surveyed said distressed asset sales will become more prominent. “The big M&A story of 2015 was the surge of mega-deals,” McCrostie said. “However, in 2016 executives may face regulatory challenges to megadeals, particularly if they involve large industry consolidations.”
ALMOST three quarters of participants said they’re weighing c ross - border i nvest ment s. Buyers in China, which is looking for intellectual property, as well as consumer and services businesses to rebalance its decelerating economy, are driving much of that. The biggest deal announced globally this year was China Nat ion a l C hem ic a l Cor p.’s agreement to buy Swiss pesticide and seeds maker Syngenta AG for about $43 billion. While the level of megadeals may fall, companies are, in general, thinking bigger when it comes to M&A. Five times as many executives plan to do deals in the $1 billion-to-$5 billion range as six months ago, according to the report. Deal-making activity will also benefit from buyout firms, which should be more active as they have about $1.3 trillion in firepower for transactions, according to Steve Krouskos, EY’s deputy global vice chair of transaction advisory services. “Over the past three years, private-equity firms have been busy selling the bulk of their portfolios, but the realization cycle is winding down and firms are entering a new buying phase,” Krouskos said. Bloomberg News
HE Department of Justice (DOJ) is set push through with the preliminary investigation on the antimoneylaundering cases filed against former Rizal Commercial Banking Corp. (RCBC) Branch Manager Maia Santos-Deguito and casino junket operator Kam Sin Wong on May 3. Deguito and Wong are expected to file their separate counter-affidavits to answer allegations that they were involved in laundering $81-million stolen from the Bank of Bangladesh, which slipped through the Philippine financial system, through RCBC. The two are facing violation of Section 4 (a) and (b) of Republic Act (RA) 9160, otherwise known as the Anti-Money Laundering Act of 2001. Section 4 (a) holds accountable for money laundering any person who transacts or attempts to transact a monetary instrument or property, which represents, involves, or relates to, the proceeds of any unlawful activity; while section 4 (b) covers any person who performs or fails to perform any act, despite knowledge that any monetary instruments or property involves the proceeds of any unlawful activity and, therefore, facilitates the offense of money laundering. The complaint cited the testimonies during the Senate inquiry where Wong, the president and general manager of the Eastern Hawaii Leisure Co. Ltd., was mentioned to have received $21.6 million (P1 billion) from the $81-million in laundered money, as well as making several withdrawals
FORMER Rizal Commercial Banking Corp. (RCBC) Branch Manager Maia Santos Deguito smiles as she emerges from a media forum on the Philippine Senate probe on the $81 million of Bangladesh’s stolen funds that were transmitted online to four private accounts at the RCBC branch. AP/BULLIT MARQUEZ
$21.6M
Received by casino junket operator Kam Sin Wong from the $81-million laundered money. from his personal and corporate accounts on February 10 and 11. The DOJ also issued subpoenas to Michael Francisco Cruz, Jessie Christopher Lagrosas, Alfred Santos Vergara and Enrico Teodoro Vasquez, the persons who allegedly opened bank accounts at RCBC on May 15 last year based on identity documents that were later verified to be fictitious. Deguito dug herself a deeper hole after admitting she lied before the Senate hearing on the multimillion-dollar international heist by still unknown hackers. During a hearing presided by Sen. Teofisto Guingona III, chairman of
the Senate Blue-Ribbon Committee, the latter said Deguito lied to the RCBC head office by reporting that Lagrosas called her on February 5 to inquire about the fund transfer from Bangladesh. She said she should have named Wong as the one who called her, but instead pointed to Lagrosas, whose account was later found to be fictitious, along with four other US dollar accounts opened in May. Deguito also revealed that Lagrosas and the four other fake depositors had peso-denominated accounts with RCBC’s Jupiter branch that were opened in December 2015. In previous testimonies, she repeatedly said she communicated with Lagrosas when in truth, she was aware there was no such person since the Social Security System identification card he presented used the photo of RCBC Reserve Officer Adrian Yujuico. The entire time, she admitted she was only talking to Wong and getting instructions from him.
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DRIVES VS REBELS, LAWLESS GROUPS NEGLECTED
Military’s dilemma: Balancing territorial, internal defense tasks F
B R A
@reneacostaBM
OR the past six years, the military has steadily shifted its focus to territorial from internal defense with President Aquino’s modest, but nevertheless, billions of pesos worth acquisition of jet fighters and warships—something that was not accomplished by the previous three administrations combined.
The spin toward the territorial defense posture was influenced by two factors: the urgent need for the country to secure its stakes in the West Philippine Sea (South China Sea) in the face of an aggressive and determined China and the “illusion” that the Maoist-inspired insurgency that has pestered and tormented the country for decades is on the retreat and will be over in a couple of years. The deceiving belief was etched under and buttressed by the Internal Peace and Security Plan (IPSP) Bayanihan, a counterinsurgency campaign that was crafted by former Military Operations Chief Emmanuel Bautista, who was later catapulted to chief of staff. IPSP Bayanihan is designed to break the three-pronged war that the Armed Forces has been waging against communist rebels, Moro separatists and the bandit Abu Sayyaf Group (ASG) and even other lawless groups. However, just two months before the end of the term of the Aquino administration and Bautista already retired for nearly two years, the whole-of-government approach that is Bayanihan is following the track of the other previously military-initiated operational plan—a failed experiment. At least two reasons were offered by some why the internal security plan Bayanihan—which was supposed to end the country’s domes-
tic threats, more particularly from the Communist Party of the Philippines-New People’s Army (NPA)National Democratic Front—was a failure or is failing. One, because defense and military planners have put too much emphasis on the country’s territorial-defense needs that they have negated or failed to balance the equally pressing need for the country to address its internal security threats, reacting only when the government is attacked by NPA rebels, Abu Sayyaf bandits and even by other lawless groups. Two, because the Armed Forces is already lost in the notion that IPSP Bayanihan is successfully breaking the backbone of all the threat groups and even showing the exit to the rebels and to the terrorists and bandits in Mindanao. While it may be true that the memberships of the NPA and the ASG are on the decline as constantly drumbeated by military apologists—owing to the figures of neutralized personalities and key leaders—both groups, though smaller in number, were, however, bolder and more daring, as shown by their encounters with the government during the past couple of weeks. “The problem with the government is it is totally sold to the idea that Bayanihan is winning. It refuses to reexamine or reevaluate it to the point that it rejects or gloss over facts,” one military observer said.
IN this December 24, 2015, photo, provided by Filipino fisherman Renato Etac, a Chinese Coast Guard boat approaches Filipino fishermen near Scarborough Shoal in the South China Sea. AP/RENATO ETAC
The government has already scored an initial victory against Moro secessionism, archiving it through the peace agreement with the Moro Islamic Liberation Front (MILF), but its conflict with the NPA and the Abu Sayyaf remains, with the two groups escalating it. From north to south, the rebels tagged by the government as “terrorists” scored successful attacks, even detonating homemade bombs in 11 areas in Masbate on a single day and engaging troops in Catanduanes, Camarines Sur, Oriental Mindoro, some places in the Bicol region and the rebel-infested areas in Southern Tagalog. On the occasion of the NPA’s 47th anniversary in late March, the rebels put up at least seven checkpoints in broad daylight in Agusan del Sur, Agusan del Norte and in Bukidnon, something that the NPA has not done in many years. In February eight policemen were killed and several others were
The problem with the government is it is totally sold to the idea that Bayanihan is winning.” —M wounded in a series of ambushes and attacks in Cagayan, Bukidnon and Negros, which the military said were part of the rebel group’s extortion activities. On April 16 the rebels also raided a military detachment in Paquibato District, Davao City, taking away several high-powered firearms and five policemen who had the misfortune of passing a checkpoint that they have put up. In a surprise move, the military, which has been calling the NPA for years as a “terrorist group” and does so whenever it encounter its members, branded those behind the Davao City attack as a “lawless group.”
The Abu Sayyaf, on the other hand, killed at least 18 soldiers and wounded 57 others in a series of skirmishes just two weeks ago in Basilan, while recently in Tawi-tawi and even Sabah, it has snatched more than a dozen of Malaysian and Indonesian boat crewmen in three separate kidnappings. During the encounter in Basilan, the government killed a Moroccan jihadist, while two months ago, an Indonesian militant was killed in a massive military operation in Lanao del Norte. The operation in Lanao del Norte uncovered the operations and existence of what the military said was a “foreign-affiliat-
ed terrorist group” in the country. The deaths of the two foreign jihadists and even the acts of the Abu Sayya and the Bangsamoro Islamic Freedom Fighters (BIFF) in pledging their allegiance to the Islamic State in Iraq and the Levant (ISIL) has confirmed directly or indirectly the presence of the Arab-based terrorist group in the country. However, for the sake of IPSP Bayanihan, the military refused to acknowledge the presence and existence of ISIL in the country, even when reports tell it so. The BIFF broke away from the MILF during the implementation of the “cure all” IPSP Bayanihan. On assets and equipment, most, if not all, of the acquisitions made by the military was for territorial defense, with the exceptions of M-4 carbines, refurbished armored vehicles and seven alleged poorly repaired UH-1D helicopters, one of which even crashed under questionable circumstances.
West Philippine Sea watch: Nations take sides T
ENSIONS in the South China Sea are rising, pitting China against smaller and weaker neighbors that all lay claim to islands, coral reefs and lagoons in waters rich in fish and potential gas and oil reserves. China’s recent construction of artificial islands in the Spratly archipelago, complete with airstrips and radar stations, and US patrols challenging Beijing’s vast territorial claims, have caused concern that the strategically important waters could become a flashpoint. China said the United States is overblowing a humanitarian emergency mission that involved one of its military planes landing on an artificial island—which also happens to be one of three recently built military outposts with long runways. The Y-8 transport aircraft made a trip to Fiery Cross Reef in the Spratlys to evacuate three injured construction workers, according to the Ministry of Defense. State Department Spokesman John Kirby questioned the need for a military aircraft, citing concern that China keeps militarizing the disputed region. He said that the injured workers were involved in infrastructure improvements of a military nature.
“One could argue that it’s just another sign that the Chinese are willing to keep militarizing the effort in general,” he told reporters. China’s Defense Ministry said it was completely within the mission of the People’s Liberation Army to rescue people—and carry out construction activities and deployment of defense facilities on related islets and reefs in the Nansha Islands, the Chinese name for the Spratlys.
More Chinese ships
FILIPINO fishermen said they’ve seen more Chinese coast guard ships than usual around the contested Scarborough Shoal, which China effectively took over in 2013 after a tense standoff with Philippine vessels. Although fishermen have been complaining they’re being driven away by Chinese ships, the Philippine Defense Department said it could not confirm an increase in Chinese presence at the shoal, 145 miles (230 kilometer) from Luzon island. Meantime, the US Air Force flew its first mission over the Scarborough area as part of a new Air Contingent force stationed in the Philippines. It involved four A-10C
Thunderbolt jets and two Sikorsky HH-60 helicopters. The mission: establishing air and maritime “domain awareness” and “assuring all nations have access to air and sea domains throughout the region in accordance with international law,” according to a US military statement. Free navigation “is extremely important, international economics depends on it—free trade depends on our ability to move goods,” said Col. Larry Card, commander of the Air Contingent, part of the stepped-up US assistance to its Philippine ally.
Nations take side
AS China and other claimants await the ruling of a United Nations tribunal on a case filed by the Philippines, which challenges Beijing’s vast territorial claims, world and regional players are lining up behind one side or the other. China has refused to take part in the proceedings at the UN Court of Arbitration, and it’s not clear how the ruling can be enforced. Russian Foreign Minister Sergey Lavrov, meeting with his Chinese counterpart in Moscow, said Russia is against any interference
The US and Vietnam share the interest in maintaining peace and stability in the region. So does China. But its massive land-reclamation project in the South China Sea and increasing militarization of these outposts fuel regional tension and raise serious questions about China’s intentions.” —US D S S A B
from third parties—a reference to the US—“or any attempts to internationalize these disputes.” Russia repeated China’s position that “only parties can resolve their dispute through direct talks.” Britain, on the other hand, said it will stand alongside the US in supporting the ruling. Hugo Swire, British minister of state for the Foreign Office, told a Washington think tank that growing tensions in the South China Sea are driven by China’s assertive actions. He said any ruling by the court should be binding on both parties. In Southeast Asia, which is broadly divided between pro- and anti-China blocs, Chinese Foreign Minister Wang Yi said that Beijing
had reached consensus with Brunei Darussalam, Cambodia and Lao PDR—its traditional allies—on the South China Sea issue. The four countries say territorial disputes are not an issue between China and the 10-member Association of Southeast Asian Nations and should be resolved by parties directly. Chinese Foreign Ministry Spokesman Hua Chunying said earlier that the case filed by the Philippines is an attempt to deny China’s sovereignty over the Spratly Islands and “an abuse of international law.”
No rift with White House
THE Pacific Fleet Commander Adm. Harry Harris has denied reports of a disconnect with the
White House in strategy over the South China Sea. Navy Times reported on a gag order issued to military commanders for making comments over the South China Sea in the run-up to the nuclear summit in Washington that included China. Harris said in a statement “any suggestion that the White House has sought to ‘tamp down’ on my talking about my concerns is patently wrong.” He said during recent congressional testimony and press engagements in Washington, “I was very public and candid about my concerns regarding many issues in the IndoAsia-Pacific to include the fact that China’s militarization of the South China Sea is problematic.” AP
AseanTuesday BusinessMirror
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Editor: Max V. de Leon • Tuesday, April 26, 2016 A5
Asean white-collar wages lower than China’s
As Zeti term ends, Malaysia poised to name central bank governor
M
ALAYSIA’S central bank Governor Zeti Akhtar Aziz has one week to go in the job and investors still don’t know who will replace her. Zeti is credited by investors with strengthening the credibility and independence of Bank Negara Malaysia in the 16 years she’s been at the helm and the longer Prime Minister Najib Razak drags his feet on announcing a successor, the more market analysts are worrying. It’s something the economy can ill afford with sentiment already under pressure, as Najib faces his biggest political crisis since coming to power seven years ago. “Trepidation is particularly pronounced” given the uncertainty over Zeti’s successor, said Jack Chambers, an economist at Moody’s Analytics Australia Pty Ltd. While the ringgit has gained about 10 percent this year after a 19-percent slump in 2015, a measure of its implied volatility is the highest in Asia. Zeti ends her term with Najib facing questions about possible embezzlement at state investment company 1Malaysia Development Bhd. (1MDB), whose advisory board he chairs. She had become increasingly critical about the situation at 1MDB, which has consistently denied wrongdoing. Aides to Najib said there’s no exact indication when he will announce Zeti’s replacement. Kuala Lumpurbased New Straits Times reported on Monday that Najib will make the announcement this week, without saying where the information was obtained. The central bank didn’t reply to an e-mail seeking comment. “The person should have the best credentials for this current environment,” Zeti said in an interview on April 16, when asked if she’d prefer an internal or external candidate to replace her. “We’re all waiting with bated breath for the announcement.” Below are potential candidates to succeed the governor, according to people familiar with the discussions since late last year and news reports.
Deputy Governor Muhammad Ibrahim
MUHAMMAD joined the central bank in 1984 and has been deputy governor since June 2010. He oversees international reserve management, and money market and foreign-exchange operations. He has served in areas from banking supervision and regulation to insurance and offshore banking. Muhammad was previously managing director at Danamodal Nasional Bhd., a bank recapitalization agency created during the Asian financial crisis in the 1990s. He has a master’s degree from Harvard University. “Appointing someone from within the Bank Negara Malaysia would be a positive sign that the central bank’s independence remains, even after its investigations of the 1MDB affair,” Chambers said.
Mohd Irwan Serigar Abdullah, Finance Ministry’s top bureaucrat IRWAN, secretary-general of the Treasury, started his government career in the Economic Planning Unit in 1984 and in 2003 joined the Finance Ministry, where he has held
ZETI
Trepidation is particularly pronounced given the uncertainty over Zeti’s successor.” —M’ A
T
HE labor-cost advantage enjoyed by some Southeast Asian economies over China goes beyond factory jobs, according to a new study by Willis Towers Watson (WTW).
Average base professional salaries in China are 1.9 to 2.2 times those of Vietnam and the Philippines, the study said. Entry-level white-collar professionals in China receive an average annual base salary of about $21,000, or 30 percent more than their counterparts in Indonesia, according to WTW’s “2015/2016 Global 50 Remuneration Planning Report.” “Wages in China have been rising for a while,” Sambhav Rakyan, WTW’s data services practice leader for the Asia Pacific, said in a phone interview on Friday. “The lower salaries
in Asean economies are giving them a real competitive edge and we feel this will lead companies to reconsider whether they need to relocate operations that were once based in China. The aging work force and shrinking work force in China suggest salaries there will remain higher than in the Asean markets minus Singapore.” The report covers the professional level and middle, senior and top management. It shows that, across the board, China base salaries are about 5 percent to 44 percent higher than Indonesia, the most expensive labor market in the
$21,000
The average annual base salary of white-collar professionals in China, 30% higher than that of Indonesia
emerging Asean economies. “If companies are looking at labor costs, they see that China wages are getting higher,” Rakyan said. “If they were to move their plant from China to Indonesia or Malaysia, they would be able to save on labor costs. That’s just one factor among a lot of other factors that affect moving operations, such as infrastructure and the availability of labor. “We have certainly seen a trend
where companies have been taking a more conscious approach to looking at whether there is now a competitive advantage for them being in China based on the labor cost alone, which is a big cost.” However, China still enjoys some advantages that mean it remains attractive to some employers, he said. “Though China is much more expensive, its more mature infrastructure and skilled work force will likely continue to attract companies.” The competitive advantage enjoyed by the low-cost economies may be short-lived. “Wages have gone up in China, it will happen in Vietnam in another 10 years, and then it may be Myanmar after that,” Rakyan said. “In Vietnam and some of the other markets it’s not easy to find middlemanagement or senior-management talent, and that will command a premium compared with the blue-collar sector and entry-level professionals.” Bloomberg News
Singapore consumer prices decline for 17th straight month
various positions. Irwan has a PhD in economics from the International Islamic University Malaysia and holds a master’s degree in energy management and policy from the University of Pennsylvania. He sits on the boards of state oil company Petroliam Nasional Bhd. and one of Malaysia’s biggest pension funds. Irwan is part of the central bank’s board of directors.
Abdul Wahid Omar, government minister and former banker THE son of a factory worker who grew up in poverty, Wahid earned his British accounting degree through a government scholarship and has been a promoter of Malaysia’s affirmative-action policy aimed at helping ethnic Malays. Wahid has held top management positions in several governmentlinked companies and was CEO of Malayan Banking Bhd., the country’s biggest lender. Najib appointed him a minister in charge of economic planning in 2013. Two past CEOs of Maybank went on to become central bank governors. Wahid currently heads the Economic Planning Unit, which served as a launchpad for another former Bank Negara chief.
Awang Adek Hussin, former ambassador to the US
THE former deputy finance minister has a PhD in economics from the University of Pennsylvania’s Wharton School—Zeti’s alma mater. He worked at the central bank for more than a decade from 1985 in departments, including economics and banking regulation, and later became an assistant governor. He was appointed US ambassador in 2014 and his term ended this month. He is a senior official in Najib’s ruling party and has said he wants to return to “active politics,” official news agency Bernama reported. The government wants Awang to remain in Washington until his replacement is found, the New Straits Times said on Monday, without saying where it got the information. Bloomberg News
SINGAPORE’S retailers saw the prices of their goods fall for the 17th consecutive month in March. BLOOMBERG
S
I N G A P OR E ’S c o n s u m e r prices fell for a 17th consecutive month in March, the longest period of decline on record, reflecting the impact of lower oil costs and a weakening economy. Consumer prices dropped 1 percent from a year earlier, as transport and housing costs fell further, the statistics agency said in a statement on Monday. That compares with a previously reported 0.8-percent fall in February, and the median estimate for a 1-percent decline in a Bloomberg News survey of 20 economists. Core inflation, which excludes private transport and accommodation costs, was at 0.6 percent last month. The record price slump is the latest sign of a sputtering economy. GDP growth was flat on an annualized basis in the first quarter compared with the previous three months, the trade ministry said earlier this month, just as the Monetary Authority of Singapore unexpectedly eased its policy stance, adopting an
The slowdown in growth momentum and the impact of earlier macroprudential measures on housing and car purchases are also having significant impact on the headline number.” —DBS G approach last used during the 2008 global financial crisis. “The slump in oil prices is certainly one of the key factors for the negative inflation,” DBS Group Holdings
Ltd. said in a research note before the data release. “But the slowdown in growth momentum and the impact of earlier macroprudential measures on housing and car purchases are also having significant impact on the headline number.”
Inflation outlook
DBS is estimating an average decline of 0.2 percent in consumer prices in 2016. The central bank said in its Monetary Policy Statement on April 14 that core inflation should pick up “more gradually” over the year than previously forecast. “Core inflation is expected to pick up gradually over the course of the year, as the disinflationary effects of oil, as well as budgetary and other one-off measures ease,” the central bank and trade ministry said in a statement accompanying the inflation report. “However, the increase in core inflation will be milder than earlier expected, given the weaker external price outlook, subdued
growth prospects, and a reduction in labor market tightness.” For the whole of 2016, core inflation is likely to be in the lower half of the 0.5 percent to 1.5 percent forecast range, barring a sharp rise in global oil prices, the authorities said. Car prices and housing rentals will continue to dampen overall inflationary pressures, and headline inflation will probably remain negative throughout 2016 to average -1 percent to 0 percent for the whole year, they said. Rentals across the city-state’s home, office and retail properties dropped in the quarter ended March, with demand weakening partly because of curbs on immigration, data released last week by the Urban Redevelopment Authority showed. The home rental index dropped 1.3 percent in the three months ended March 31 from the previous quarter, while office rentals slid at a faster pace, falling 2.1 percent, the agency said. Bloomberg News
Thailand’s Chularat Hospital targets Chinese couples wanting second child
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HUL ARAT Hospital Pcl., which runs health-care facilities in the provinces east of Bangkok, predicts revenue growth will accelerate as it adds beds and looks to attract Chinese couples to a new fertility clinic. Revenue from hospital operations may rise at least 20 percent this year, up from 18-percent expansion in 2015, and the total number of beds
will grow from around 300 to 500 by next month, Managing Director Kumpol Plussind said. The company aims to open a fertility clinic in 2017 that will target an expected increase in demand from Chinese couples following the scrapping of Beijing’s one-child policy, he said. “We have a shortage of facilities to serve the rising number of overnight patients, and inpatients
will offer much better revenue and margins,” Kumpol said in an interview at his office in Samut Prakarn near Bangkok on Friday. Older Chinese couples will need medical help to have a second child and the facilities in China will not be sufficient to meet the need, he said. Chularat joins other private hospita l operators, including
Bangkok Dusit Medical Services Pcl. and Bumrungrad Pcl. in boosting capacity to meet rising local demand from an aging local population and medical tourists from Asia. A measure of listed Thai health-care companies has surged 27 percent in the past 12 months, the best-performing group in the SET Index, which has dropped 9.2 percent over the period.
Chularat completed the acquisition of a hospital in Rayong province, 200 kilometers east of Bangkok, for 117 million baht ($3.3 million) last month. The company’s stocks have climbed 43 percent in the past year, the fifth-best performer among 16 listed health-care companies, according to data compiled by Bloomberg. The share price rose 1.4 percent to 2.88 baht as of
11:45 a.m. in Bangkok on Monday. The company operates seven hospitals and seven clinics in Samut Prakarn, Chachoengsao, Chon Buri and Rayong provinces. Chularat is looking at opportunities for more purchases to boost earnings growth and has allocated about 500 million baht for capital expenditure and acquisitions this year, Kumpol said. Bloomberg News
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Disgruntled Pennsylvania Democrats switch parties
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NEPALESE people release balloons in memory of those who died in last year’s devastating earthquake in Kathmandu, Nepal, on Saturday. The April 25, 2015, earthquake killed nearly 9,000 people. AP/NIRANJAN SHRESTHA
Nepal has done little against next ‘big one’ K
ATHMANDU, Nepal—Last year’s massive earthquake in Nepal killed nearly 9,000 people, yet could have been much deadlier. It was spared, not by disaster preparedness, but by the calendar. It hit on a Saturday. Most children were out of school, and most adults were working in their fields, rather than in the hundreds of thousands of buildings that were damaged or destroyed. The Himalayan country can’t count on that kind of luck next time, but since it’s in the middle of a highly active seismic region, it can count on another major quake at some point. Yet, experts say Nepal and neighboring India have a long way to go to implement earthquake-safe building practices.
Building codes
NEARLY a year after the disaster, Nepalese authorities have yet to announce new building codes. “I haven’t seen any significant initiative or change that would help the next time,” said Mattias Bryneson of the Plan International aid agency. The gover nment has said more than 8,000 schools were damaged or destroyed in last year’s quake. Still, “similar types of schools are still standing in other parts of Nepal,” Bryneson said. If a quake hit tomorrow and affected those areas, those schools could also collapse. T he ne x t h i g h - m a g n it ude quake “is going to be a massive, huge disaster for Nepal,” Bryneson said. Similarly, Nepal also faces the threat of quake-triggered landslides, of which there were at least 3,000 last year, burying villages, blocking roads and ruining farmland. The April 25 quake killed nearly 9,000 people in Nepal, while damaging or destroying almost 800,000 homes. Another 102 people were killed on the Indian side of the border, where some 13,000 houses were badly damaged. The Himalayas are result of smashing
9,000
Estimated number of people who were killed in the 7.8-magnitude earthquake in Nepal last year
and buckling between the tectonic plates on which India and China sit. Since the 7.8-magnitude struck on April 25, 2015, in the central district of Gorkha, Nepal has been rattled by constant aftershocks. Other quakes have hit nearby, most significantly a January 4 rattler of 6.7 magnitude in the northeast Indian state of Manipur, and a 6.9-magnitude temblor on April 13, centered in the hills of neighboring Myanmar. Seismologists warn there are several places across the Himalayas that are overdue for a “big one,” possibly much stronger than last year’s quake. Some Nepalis are still afraid of moving back inside heavy buildings. Mahila Prajapati has lived with his family in a tin shed since their home crumbled in last year’s quake, killing his uncle. “I don’t know if I will ever be able to move into brick-andconcrete house again. I saw many people crushed underneath piles of bricks. I still get nightmares,” Prajapati said. When he does go into buildings, the first thing he checks for is stairways and exits. Others who have started rebuilding, mostly without government help, are doing what they can to make sure their homes are earthquake-safe. They are opting to build with bamboo and wood, more flexible and lighter than the stone and brick buildings that crumbled last year, causing most of
the 8,856 deaths. They are building structures with fewer stories. And engineers must now sign documents declaring homes they plan to build are safe, or they won’t be issued building permits. “I am putting in more iron rods in the pillars, and have decided to limit the floors to two,” Kathmandu resident Narayan Maharjan said, as he was shopping in a hardware store for supplies to rebuild his family home. “I will be able to sleep better knowing my family is safe.” Though Nepal’s long-dysfunctional government has much room for improvement in building safety, last year’s quake did give it more experience in handling the logistics of search, rescue and immediate humanitarian aid. “ The earthquake was a big experience for us, and now we are better prepared for another disaster,” said Mahesh Dahal of the country’s National Emergency Operation Center, set up in 2010 with UN funding to foster coordination among relief agencies. Since last year’s quake, Nepal has set up five regional warehouses stocked with food and emergency supplies, as well as offices in all 75 district capitals. The Red Cross has started training stonemasons, carpenters and community members in earthquake-resistant building techniques. But even that has stalled, since the agency must wait for stillunannounced building regulations. “We are hoping that the government’s priorities and perspectives on reconstruction will soon be clear so that we can help people to rebuild and get their lives back on track,” Max Santner, head of the Nepal office for the International Federation of Red Cross and Red Crescent Societies, said in a written statement. In India builders still routinely flout building codes and use substandard materials, leading to disasters like the deadly collapse— not earthquake-triggered—of an overpass under construction in Kolkata on March 31. Settlements are still being constructed on marshlands— which are considered less stable on soggy, shifting ground—and overcrowding continues to be a potential problem for emergency
vehicles should they be deployed. “The government is in deep slumber on this front, and its approach is very bureaucratic,” said seismologist B.S. Bali, a professor at the University of Kashmir, in the Indian-controlled portion of the disputed Himalayan region surrounded by India, Pakistan and China. “We don’t want to create fear, but the stress is building under the Himalayas, and an earthquake of magnitude 8 or 9 is already overdue.” Kashmir also has a history of devastating quakes, including a 2005 temblor of 7.6-magnitude temblor that killed more than 80,000 people and left another 3 million homeless. “It’s appalling that the government continues to be muted in its response, despite impeccable research suggesting that the Kashmir Himalayas are a dangerously active seismic zone,” seismologist M.I. Bhat said. “There’s no policy for ensuring construction of earthquake-resistant buildings.” India also makes it difficult for scientists to study the quake potential, by refusing to share data with other nations, though seismologists say they already have enough to be clear about the risks. “ T he pol it ic a l at t it ude to earthquakes in India has traditionally been to ignore future seismic risk if it gets in the way of progress, but to do whatever is considered needed if it doesn’t,” said geologist Roger Bilham, a professor at the University of Colorado in Boulder who was denied an Indian visa in 2012 after conducting earthquake research in the country. Meanwhile, India is fighting an insurgency in the portion of Kashmir it holds. In 2013 it published an advisory telling Kashmiris to be prepared for possible nuclear war with neighboring Pakistan by building bomb-proof basements and collecting two weeks of food and water rations. “ It ’s f u n n y. T h e g o v e r n ment wants you to be prepared for such a possibility, but it’s missing its duty in preparing for the reality” of an earthquake, said Mohammed Abdullah, who teaches political science at one of Srinagar’s state colleges. AP
EAVER, Pennsylvania—A retired middle-school principal was so moved by Donald Trump that he switched his Democratic Party registration so he can vote for him in Tuesday’s Republican presidential primary. So did the daughter of a steelworker, who t w ice voted for President Barack Obama, but says she is “over” the Democrats’ political correctness. And a husband-wife team of Trump volunteers—she’s a laidoff airport worker, he’s a laid-off truck driver—were Democrats for 30 years, until recently. “We always voted Democrat,” said Laurie McGinnis, as her husband Ricky hung a Trump banner outside their South Greensburg home. “But not any more.” Some of these newly minted Pennsylvania Republicans are formalizing a process that began with Ronald Reagan’s election in 1980, when conservative-leaning Democrats began shifting away from the party in the faded industrial state. Others moved abruptly, inspired by Trump and fed up with a party they say no longer speaks their language. Together, the result is one of the most sizable shifts of partisan allegiance ever in Pennsylvania: 61,500 Democrats have become Republicans so far this year, part of a 145,000 jump in Republican registrations since the fall 2015 election, according to state figures analyzed by both parties. It’s more new Republicans than in the previous four years combined. T he onsl aught h a s helped make Trump the favorite heading into Tuesday’s primary, helping put Pennsylvania, which voted for Obama twice, in play in the November presidential election. “The party-switching has been going on in an evolutionary way for two decades. This just propelled it faster,” said G. Terry Madonna, a professor at Franklin and Marshall University in Lancaster, Pennsylvania. “Many of them are Reagan Democrats—white, working-class, blue-collar, incomes of $35,000 to $40,000 or less, highschool educations or less.” “ They feel frustrated, they feel left behind,” Madonna said. “ They feel Trump is sticking it to the man.” East of urban Pittsburgh, at Trump headquarters in Monroeville, volunteer Tricia Cunningham said that half the people who walk through the door are party-switchers.
S o m a ny sup por ters h ave come in to pick up lawn signs or volunteer that the office has had to open a second f loor, and signs are limited to just one per person, Cunningham said. Even her mother, a lifelong Democrat now living in a nearby nursing home, made the change, she said. “I look in the mirror and I say, ‘What the hell are you doing?’” Rox Sarrao, the former principal, said with a laugh. He voted for Obama in 2008 and had kept his party affiliation so he could back Democrats in local elections, even though he was once a Republican. He went to the county courthouse last month to switch to the GOP. He now drives 40 miles daily to volunteer at the Trump office. In some ways, it’s no great political mystery what has happened in Pennsylvania, where the remains of the long-gone steel industry rust the landscape and coal country fights for its life. The mostly white electorate here comes from an earlier iteration of the American melting pot—Eastern Europeans, Italians, Irish— who have little resemblance to the newer Democratic coalition of young people, minorities and urban white-collar professionals. Many families have stayed here for generations, as the nation’s economy and demographic trends have moved on. “We voted Democrat for 59 years,” said Eleanor Kanick, a retired postmaster, with her husband Stanley, a welder, in Avonmore. “Our parents were Democrats, too. I said they’re going to turn over in their graves.” Tom Balya, a former Democratic County Commissioner in Westmoreland who hosts a local radio show, said callers often voice fears about shifting socioeconomic conditions that have left them struggling to keep up. It’s going take a generation for Democrats to recoup their losses, he said. “They see this world changing around them,” he said. “It’s a generational thing. You’re not going to get people over 50 to change their beliefs. It’s not going to change quickly.” But others see a deeper disconnect in a Democratic Party that has put its emphasis on attracting moneyed metropolitan voters and fast-growing minority groups while taking its core blue-collar electorate for granted, a theory spelled out by author Thomas Frank in his new book, Listen, Liberal. TNS
Prime minister wins majority in Serbian election
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ELGRADE, Serbia—Serbian Prime Minister Aleksandar Vucic’s Progressive Party won a majority in parliament in snap elections on Sunday, securing a new fouryear term to overhaul the economy and lead the country closer to the European Union (EU). The Progressives, who forced an election two years early for the second time since 2012, won 48.6 percent of the vote, enough to secure a majority in the 250-seat parliament, an independent election monitor said, citing 50 percent of ballots counted. The Socialist Party, led by Foreign Minister Ivica Dacic, was second with 11.2 percent, and the ultranationalist Radical Party, led by acquitted war-crimes suspect Vojislav Seselj, was third with 8 percent, Ipsos Strategic Marketing said. Ipsos, which conducted a parallel tally with the Election Commission, said four more parties made it into the assembly. The prime minister has pledged to continue an economic overhaul endorsed by the International Monetary Fund (IMF) to end state support of unprofitable companies, shrink the public administration, and liberalize markets in the country of 7.2 million people. With his party’s result close to the 48.8 percent it won in 2014, Vucic overcame resurgent nationalist candidates, including Seselj, who advocated shunning the EU and boosting ties with Russia. He also defeated other parties who want to halt an austerity drive. “Serbia will continue it’s European path,”
Vucic said after declaring victory at his party’s headquarters in Belgrade. “We’ll try to accelerate it, but we will also maintain our traditional ties with Russia and China, and, of course, the United States.” The election victory gives Vucic, 46, a chance to implement reforms that will probably hurt his popularity in the short term, but that the IMF considers necessary to eventually create jobs and improve living standards. One of Europe’s poorest countries, Serbia’s unemployment rate is above 18 percent, and its average take-home wage is $407 a month. Vucic also wants to prepare Serbia for EU entry by 2020 to follow former Yugoslavia partners Slovenia and Croatia, which joined in 2004 and 2013. Opposition leaders complained of voting irregularities, with Sasa Radulovic, the leader of the Enough is Enough party, saying it would check every ballot. Critics of Vucic have complained that his consolidation of power, while bringing some economic change, is threatening democracy. His detractors say he has suppressed media, while the EU’s executive commission, in a report last year, said Serbia had made no progress in improving freedom of expression and hadn’t addressed recommendations to ensure campaign finances and electoral processes are transparent. Vucic has said he will form a coalition even if he wins an outright majority, as he did after the 2014 elections, to have broader support for his reform agenda. Bloomberg News/TNS
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World powers leaning on econ sanctions that seldom work
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O rein in countries from North Korea to Sudan, global powers are boosting their reliance on United Nations sanctions aimed at forcing recalcitrant governments to drop weapons programs, stop attacking their civilians or respect the results of elections. They usually fail. In March the 15-member Security Council voted to toughen economic sanctions against North Korea, already one of the world’s most isolated regimes, for a missile launch and nuclear test that violated previous UN resolutions. Pyongyang responded with more launches, including one fired from a submarine on Saturday. Few analysts expect leader Kim Jong Un, who has tolerated widespread hunger and malnutrition among his people, to abandon his weapons program before he has the technology to deliver nuclear weapons to the US mainland. And while the pressure of economic sanctions is credited with helping broker a nuclear accord with Iran, that result was almost a decade in the making. Most examples are less positive. “Sanctions have failed to achieve their objectives, and even the success stories have a mixed record,” said Daniel Wagner, who heads the Country Risk Solutions consulting firm and is author of the Political Risk Insurance Guide. “Countries have found ways around the sanctions and can counter them.”
Patience required
THE Security Council in April renewed year-old travel sanctions and an asset freeze on South Sudan. Members should be patient: The council has had sanctions on neighboring Sudan for 13 years. Sudanese President Umar al-Bashir, the first sitting president indicted by the International Criminal Court for fostering violence in the western Darfur region, remains defiant. As many as 16 countries have been placed under UN sanctions this decade, double the number from the 1990s. Countries should be
wary of seeing sanctions as a magic bullet, US Treasury Secretary Jacob J. Lew said in a speech last month. “We must guard against the impulse to reach for sanctions too lightly or in situations where they will have negligible impact,” Lew said. “And we must be conscious of the risk that overuse of sanctions could undermine our leadership position within the global economy and the effectiveness of our sanctions themselves.” In the late-1990s and 2000s, sanctions on Iraq and the prospect of war with the US failed to persuade Saddam Hussein to fully open his country to UN weapons inspectors. When the US and its allies invaded, no program to produce weapons of mass destruction was found and the US got mired into becoming an occupation force. Sanctions have become more sophisticated since then, Lew said. The oil-for-food program placed on Iraq to help ordinary citizens while targeting military spending “wasn’t very effective,” Lew said, because “instead of providing the relief on a humanitarian basis it ended up enriching many of Saddam’s cronies.”
Squeezing Putin
BY contrast, Lew cited measures the US imposed on Russia’s government and close allies of President Vladimir Putin in the wake of Moscow’s takeover of Crimea. “We went with targeted sanctions that went right to the inner circle and at the first stage had very little impact on the general public. We’ve learned a great deal.” Russia was also hit by plunging prices for oil, its biggest export. A 2013 Brown University study of 22 UN targeted sanctions regimes since 1991 found that the measures were effective in forcing behavior changes 10 percent of the time. “Sanctions are applied to the most complex, intractable problems where the military option is not the solution,” said Thomas Biersteker, a professor at the Graduate Institute of Geneva, who has written extensively on sanctions. Bloomberg News
Earliest China economic data suggest recovery gathering pace
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H I N A’ S p rop er t y-led economic rebound gathered pace in April, according to the earliest batch of private indicators for the month. Gauges from four providers all increased in April from March, while subindexes for employment showed stronger demand for workers. Still, not all the clouds have parted: data tracking the outlook of businesses show companies remain reluctant to invest. New credit, industrial output, fixedasset investment and retail sales all picked up and exceeded economists estimates in March, while first-quarter economic growth matched forecasts for the slowest expansion since 2009. Signs the recovery is enduring into the second quarter may entrench a change in forecasts for monetary policy, with analysts already dialing back expectations for additional easing. Economists now see the central bank keeping rates on hold, leaving the benchmark one-year lending rate at a record low of 4.35 percent through the third quarter before cutting it to 4.1 percent in the fourth quarter, according to an April 15 to 20 survey by Bloomberg. Here’s what the earliest economic tea leaves show for this month:
Minxin gauges
TWO indexes published by the China Academy of New Supply-side Economics picked up for a second month. The Minxin manufacturing index rose to 46.9, the highest in a year, while the nonmanufacturing gauge increased to 44.2 from 40.1 in March. Readings above 50 signal the environment is improving and those below indicate conditions are deteriorating. The gauges are based on surveys of more than 4,000 companies by Minsheng Bank and the academy. Subindexes tracking employment in manufacturing and services both rose. “A positive trend of economic recovery has already shown up,” Jia Kang, director of the Beijing-based academy, said in a statement. He added that companies still have a relatively cautious outlook, and they look forward to more policy measures to aid growth. Not everyone is convinced. “Take the uptick with a grain of salt,” said
MCM Partners strategist Hank Terrebrood after the Minxin gauges were released, citing lackluster shipping, rail and road data. “There is no way to justify any of the recent up-ticks” in Chinese economic data, Terrebrood said.
Executive moods
MARKET News International’s business confidence indicator rose to 50.5 in April from 49.9 in March. Sentiment among ser vices companies remained brighter than the mood in manufacturing, according to a statement by the New York-based agency, which surveys Chinese companies listed on the Shanghai and Shenzhen stock exchanges. “The April survey was a little bit more promising, although not unanimously so,” Philip Uglow, chief economist of MNI Indicators, said in a statement. He said more firms reported that they need to hire additional workers. Other data point to a dimmer outlook. MNI’s sub-index tracking expectations for future business conditions fell to 45.3, the lowest on record since the start of the data in 2007. “Companies turned pessimistic about the coming three months, which suggests the recovery of the Chinese economy is unlikely to be smooth,” Uglow said.
Sales stabilize
THE drop in sales managers reporting weaker activity is bottoming out after a two-year decline, according to World Economics Ltd. While the main gauge was effectively unchanged in April, confidence of sales managers at larger private-sector companies edged up to 51.3 from 51.2 in March, according to the London-based research firm.
Satellite gauge
THE China Satellite Manufacturing Index rose slightly to 48.2 in April from 48 in March, according to San Francisco-based SpaceKnow Inc., which analyzes thousands of industrial facilities using commercial satellite imagery. While an improvement, it’s still one of the weakest readings in the past four years. The gauge has only been above 50 once in the past year. Bloomberg News
US President Barack Obama and German Chancellor Angela Merkel chat during the opening of the Hannover Messe industry fair in Hannover, northern Germany, on Sunday. Obama is on a two-day official visit to Germany. AP/JENS MEYER
Obama expects progress on Asia, Europe trade deals
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RESIDENT Barack Obama said he expects the US Congress to vote on a trade deal with AsiaPacific nations after the primary season is over, and that his administration will complete negotiations on a similar pact with the European Union (EU) by the end of his presidency. “When we’re in the heat of campaigns, people are naturally going to worry more about what’s lost than what’s gained, with respect to trade agreements,” Obama said on Sunday at a news conference with German Chancellor Angela Merkel in Hanover. The leaders appeared at the opening of the Hanover Messe, which bills itself as the world’s leading trade show for industrial technology. “I’m confident we are going to be able to get this done,” Obama said. W hite House officials say the Trans-Atlantic Trade and Investment Partnership (TTIP), which would reduce tariffs on scores of products traded between the US and EU, remains a top priority for the president. Still, negotiators in both the US and Europe acknowledge the prospects for ratification of the deal are essentially nonexistent until the next administration.
‘Political transitions’
“I DON’T anticipate that we’ll be able to have completed ratification
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Number of Asia-Pacific nations in the Trans-Pacific Partnership trade deal of a deal by the end of the year, but I do anticipate we can have completed the agreement,” Obama said of the European pact. If not, Obama said later in a speech at the trade show, “political transitions could mean this agreement is not concluded for quite some time.” “TTIP is a treaty that establishes standards in a very special way, so I want to very strongly express my support for using this window of time,” Merkel said in comments to
the same audience. “It won’t come back anytime soon. So let’s work on this together.” Congress has yet to vote on a trade deal Obama negotiated last year with 11 Asia-Pacific nations, the Trans-Pacific Partnership. Many lawmakers in Obama’s own party oppose the accord. “After the primary season is over the politics settle down a little bit in Congress, and we’ll be in a position to start moving forward,” Obama said.
Warren’s challenge
THE president dismissed criticism of the Investor-State Dispute Settlement provisions in trade deals, which let companies challenge domestic laws in front of international arbitration panels. Sen. Elizabeth Warren, a Massachusetts Democrat, who at one point worked in the Obama administration, has said such provisions are a dangerous challenge to sovereignty and could allow the erosion of public health and environmental protections. But Obama said “the terrible scenarios that are painted” haven’t materialized under current trade agreements that include such provisions. “None of these things have happened with the many trade agreements that currently exist,” Obama said. Corporate leaders say they’re thankful Obama is trying to set the table on trade for the next president. The Hanover Messe trade show, with 300 US companies and 70 US economic development organizations expected to participate, provides Obama
and Merkel an opportunity to highlight the benefits of crossAtlantic trade.
Networked world
OBAMA’S attendance at the show sends a message to the business community that “the president of the United States believes industrial production is important,” Siegfried Russwurm, chief technology officer of Munich-based Siemens AG, said in a phone interview. “Hanover is a great opportunity to show how networked our world is, and sometimes politicians appreciate that reminder.” At a town hall with British youth on Saturday, Obama said the trade deal could create “millions of jobs and billions of dollars of benefits on both sides of the Atlantic.” “The main thing between the United States and Europe is trying to just break down some of the regulatory differences that make it difficult to do business back and forth,” he said. The president’s visit may exacerbate concerns about the trade deal among some factions in Germany that are nervous it could open public services to foreign investments, endanger family farms and tacitly allow the monitoring of online activities. In his remarks at the trade fair, Obama acknowledged that some farmers and workers have felt the costs of trade deals “without necessarily seeing or feeling the benefit.” “These anxieties are real, and at a time of growing inequality in many advanced economies we have to address them,” he said. Bloomberg News
Mideast post-oil plans risk slower growth
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S oil exporters in the Middle East cut public spending and generous handouts to adapt to the reality of low crude prices, one casualty of their plans is economic growth and the ability to reduce one of the world’s highest youth unemployment rates. Nonoil economic expansion is set to slow to between 3.5 percent and 4 percent through 2021, compared with about 7.5 percent in the previous decade, according to the latest International Monetary Fund (IMF) forecasts. At this pace, governments and private businesses would be able to create 7 million jobs, about 3 million short of the number of entrants expected in the same period, said Masood Ahmed, head of the IMF Middle East and Central Asia department. Slower growth is a “ver y logical consequence of the cutting back of government spending,” Ahmed said in an interview in Dubai on Sunday. “Now the
challenge would be how to accelerate the pace of job creation in the private sector because the public sector is not going to be creating as many jobs as they were doing in the past.” Exporters from Saudi Arabia to Algeria are rushing to find alternative sources of revenue as they cut capital spending and seek to curb wage growth. Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman told Bloomberg in an interview late in March that the kingdom plans to raise nonoil income by more than $100 billion by 2020 through measures that include subsidy cuts and the introduction of value-added taxation.
Missed opportunity?
THE IMF figures help highlight how energyrich nations in the region probably missed the best chance to diversify their economies
beyond hydrocarbons when crude prices were at $100 a barrel or higher in the past decade. While public spending fueled nonoil growth, governments used the windfall partly to hire more nationals and extend more handouts to ward off unrest. Ahmed, the IMF official, said the priority for oil exporters “is to complement the efforts that are being made on the fiscal adjustment with efforts to create a climate and incentive structure for the private sector in these countries to a be able to function, thrive, create businesses and jobs.” Saudi Arabia, the world’s top oil exporter, has cut spending and turned to the bond market to finance a deficit that reached about 16 percent of gross domestic product last year.
Narrowing deficit
THE shortfall is set to narrow to 13.5 percent of GDP this year, according to IMF forecasts.
The oil price the kingdom needs to balance its budget has declined to $66.70 a barrel from an estimated $94.80 last year. The United Arab Emirates, the secondbiggest Arab economy after Saudi Arabia, scrapped subsidies on transport fuel last year. Algeria, another Organization of Petroleum Exporting Countries member, is returning to the domestic bond market for the first time in two decades to mobilize domestic resources to finance spending on projects, Finance Minister Abderrahmane Benkhalfa said in an interview in Washington this month. Algeria is expected to post a budget gap of 15 percent of GDP this year, IMF data show, compared with an average surplus of 3.9 percent between 2000 and 2012. “At the moment, you see quite a proactive effort in the region,” Ahmed said. “It’s a bit correlated with how much they’re impacted.” Bloomberg News
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250 military personnel headed to Syria
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ERZEN, Germany— President Barack Obama will send an additional 250 military personnel to Syria to help local forces fighting the Islamic State (IS) group, increasing to 300 the number of US forces battling extremists in the war-torn country, administration officials confirmed on Sunday. Obama was expected to announce his decision on Monday during a speech in Hannover, Germany, at the close of a weeklong trip, where IS was a focus of his meetings with world leaders in Saudi Arabia, Great Britain and Germany. The move will significantly increase the US presence in Syria and comes a week after Defense Secretary Ash Carter announced the deployment of a similar number of troops to Iraq, where IS militants also control territory. About 50 US special-operations forces are already operating in Syria. Most of the additional 250 personnel will also be special operations forces, largely Army Green Berets. The group will also include an unknown number of medical and logistical troops to provide them with support. Senior US officials have been touting the success of the forces in
50
Number of special operations forces operating in Syria
Syria, including their ability to generate critical intelligence, which gives the US-led coalition a better view of what is happening on the ground, including efforts to target insurgents. In a sign of Obama’s reluctance to use of force, Monday’s announcement will cap a trip during which the president advocated diplomacy over military intervention. Asked last week whether he planned to increase special opera-
tions forces in Syria, Obama did not answer directly. But he said he’d had discussions with an adviser about options, should a fragile cease-fire break down. “None of the options are good,” he said in the Saudi capital of Riyadh. “It has been my view consistently that we have to get a political solution inside of Syria and that all the external actors involved have to be committed to that as well as the actors inside of Syria.... The sooner we can end fighting and resolve this in a political fashion, the better.” Obama has said he remains opposed to large-scale US military intervention in either Iraq or Syria. But he has incrementally deepened US involvement in both countries. The increase of US troops in Syria has been discussed for weeks, including rumblings last week, when Carter announced sending an additional 217 US troops to Iraq, the first major increase in US forces in Iraq in nearly a year. Eight Apache helicopters were also being sent to Iraq for the first time to help fight against the IS group there. Both moves were carried out to help Iraqi forces as they prepare to retake the key northern city of Mosul. The deployment brought the total authorized troop total to just over 4,000. Obama reentered Iraq in June 2014 with an initial contingent of 170 soldiers serving Iraqi forces as advisers in June 2014, in response to the IS group’s seizure of much of the northern and western part of the country. Obama’s decision on Syria was first reported on Sunday by The Wall Street Journal. AP
HAWAII RESIDENTS TOLD: DON’T HATE TOURISTS
U.S. WON’T STOP MULTINATIONAL DEFENSE VS N. KOREA, OBAMA SAYS
A SOUTH Korean man watches a TV news program showing an image published on Sunday in North Korea’s Rodong Sinmun newspaper of North Korean leader Kim Jong Un at Seoul Railway station in Seoul, South Korea. North Korea said on Sunday it successfully test-fired a ballistic missile from a submarine and warned of its growing ability to cut down its enemies with a “dagger of destruction.” AP/AHN YOUNG-JOON
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RESIDENT Barack Obama said the United States won’t back down from strengthening its military alliances and defenses against North Korea until the country “shows seriousness” toward eliminating nuclear weapons from the Korean peninsula. “If North Korea shows seriousness in denuclearizing the Korean peninsula, then we will be ready to engage in serious conversations with them to reduce tensions,” Obama said on Sunday in Hanover, Germany, the final stop of a threenation international tour. North Korea would “have to do better” than announcing “via news release” that it intends to step back from nuclear weapons development, he said. North Korea on Saturday testfired a ballistic missile from a submarine, according to the US Strategic Command. It wasn’t clear
how far the missile flew, and the US said it “did not pose a threat to North America.” The missile firing was the latest in a series of military provocations from the regime of Kim Jong Un. “Although more often than not they fail in many of these tests, they gain knowledge each time they engage in these tests,” Obama said. “We take it very seriously, and so do our allies, and so does the entire world.” In recent months, North Korea has also claimed to have successfully tested its first hydrogen bomb, launched a satellite into orbit, and developed miniaturized nuclear bombs. North Korea’s foreign minister told the Associated Press on Sunday that the country was willing to stop nuclear tests if the US suspended its annual joint military exercises with South Korea. Ri Su Yong also said in the interview that
international sanctions wouldn’t change the behavior of the regime. “If we continue on this path of confrontation, this will lead to very catastrophic results, not only for the two countries but for the whole entire world as well,” he said. “It is really crucial for the United States government to withdraw its hostile policy against the DPRK and as an expression of this stop the military exercises, war exercises, in the Korean Peninsula. Then we will respond likewise.” The US and South Korea intensified the military exercises, which are expected to continue through the month, after North Korea conducted its fourth nuclear test in January. About 300,000 South Korean troops and 17,000 US troops are participating in the drills, according to the joint US and South Korean military command. Bloomberg News /TNS
Ohio authorities seek leads in slayings of 8 in family
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A HAWAIIAN hula dancer performs for the Solar Impulse 2 pilots Andre Borschberg (left) and Bertrand Piccard (center) during a departure ceremony at the Kalaeloa Airport on Thursday. AP/MARCO GARCIA
H
ONOLULU—As a record number of visitors stream into Hawaii, state officials want residents to know: Tourism is your friend. The agency that promotes travel to Hawaii is starting an online video campaign to remind locals about the benefits of the state’s biggest employer. The first installment features Honolulu chef Mark Noguchi talking about his brother-in-law’s job at a Waikiki restaurant and his uncle’s work building resorts. He closes the 30-second video saying: “Take care of tourism. It’s a family business.” The campaign is aimed at showing tourism helps a broad cross-section of the state, not just those who work in hotels or at other jobs directly in the industry, said Leslie Dance, the Hawaii Tourism Authority’s vice president for marketing and product development. People sometimes forget how important tourism is and start lamenting there are too many people around, particularly when business is good, she said. “It’s just a tendency for people to start complaining,” Dance said. “And so the thing is, let’s remind everybody again.” But not everyone in Hawaii is on board. Critics say the industry offers poorly
paid jobs and exploits Hawaiian culture. But many complaints are about increased traffic and congestion. The campaign comes as the state tries to maintain the momentum that brought a record 8.6 million travelers to Hawaii last year, the fourth-straight year of recordbreaking visitor arrivals. Industry officials attribute the growth to an increase in flights and Hawaii’s enduring popularity with global travelers. Online review sites, like Yelp, are directing tourists to restaurants, hikes and beaches in residential areas where travelers rarely ventured decades ago. Web sites, like Airbnb, also allow more visitors to spend the night in neighborhoods, instead of Waikiki hotels, even when most Oahu vacation rentals are illegal under county law. Rena Risso, a 30-year-old who was born and raised in Kailua, understands the positive aspects of tourism, but she believes they’re outweighed by the negatives. “I think, as far as the local’s point of view, it’s humbug,” she said after an early morning walk. “I can’t even take my kids to the beach on a weekend because it’s so crazy.” The tourism agency should do more than promote “uncritical support for
the growth of tourism,” said Jonathan Osorio, a professor of Hawaiian studies at the University of Hawaii at Manoa. It should be required to consider the long-range effects of continued growth on Hawaii’s resources and society, he said. “The admonishment that we should take care of tourism because it’s a family business is a slick seduction that wants to avert the public’s attention from the industry’s abuses,” Osorio said in an e-mail. Dance called the campaign an inexpensive, grass-roots way to have a conversation. The videos cost $18,000 each and are posted on the tourism authority’s YouTube channel. The second clip shows Renee Kimura of Kimura Lauhala Shop discussing how tourists support the Big Island store her greatgrandfather founded over a century ago. The next video will be filmed on Kauai. People should be reminded of tourism’s benefits so they’ll treat visitors well and encourage them to come back, said Henry Maumalanga, a hotel security guard who lives in Honolulu. “A lot of tourists come here just because of the aloha spirit and all of that. They hear about all that kind of stuff,” he said. “And we got to show it.” AP
OLUMBUS, Ohio—Authorities are scrambling to determine who killed eight family members in a “preplanned execution” that has shaken residents in their rural southern Ohio community. Attorney General Mike DeWine said at a news conference on Sunday that the killings at four homes near the small community of Piketon on Friday was “a sophisticated operation.” Seven adults and one teenage boy were found shot in the head; three young children were not harmed. “This was a preplanned execution of eight individuals,” DeWine said. Authorities remained tightlipped on Sunday about details of the investigation, any suspects or motives for the crime. They said they found marijuana operations at three of the crime scenes, but didn’t say if the deaths were linked to pot. Autopsies were expected to be completed on Monday. Pike County Sheriff Charles Reader said it was clear the family was targeted, and he’s told the victims’ relatives to arm themselves. Reader said he didn’t believe safety was an issue for others, but he said: “If you are fearful, arm yourself.” Investigators have interviewed between 50 and 60 people in hopes of finding leads, and a team of 38 people is combing wooded areas around the shooting scenes to ensure no evidence was missed, authorities said. “This was very methodical. This was well planned. This was not something that just happened,” Reader said, noting most victims were targeted while they were sleeping.
The victims were identified on Saturday as 40-year-old Christopher Rhoden Sr.; his 16-yearold son, Christopher Rhoden Jr.; 44-year-old Kenneth Rhoden; 38-year-old Gary Rhoden; 37-yearold Dana Rhoden; 20-year-old Clarence “Frankie” Rhoden; 20-year-old Hannah Gilley; and 19-year-old Hanna Rhoden. Hanna Rhoden was in bed with her newborn baby nearby, authorities said. The infant was 4- or 5-days old. The newborn, Hannah Gilley’s 6-month-old baby, and one other small child were not hurt. DeWine said the state’s crime lab was looking at 18 pieces of evidence from a DNA and ballistic standpoint, and five search warrants have been executed. Since the slayings, authorities have refused to discuss many details of the crime, a potential motive, weapons, or the search for the assailant or assailants. “We don’t know whether it was one or more people involved in this,” DeWine added. More than 100 tips have been given to investigators, who’ve set up a number for people to call as police seek information about the crimes. A Cincinnati-area businessman also put up a $25,000 reward for details leading to the capture and conviction of the killer or killers. Robin Waddell, who owns the Big Bear Lake Family Resort just south of Piketon, said Christopher Rhoden often did work for him as a carpenter and helped out with his excavation business. He said Rhoden was a nice guy whose kids sometimes visited him, while he was working. “It’s a large family,” Waddell said.
“There’s a lot of them and they’ve been in this community for generations. So this is affecting a lot of people.” Maggie Owens, a cook at the town’s Riverside Restaurant, said she’s counts herself among those who feel they’re on eggshells. “I know a lot of people are just scared,” Owens, 39, said in a phone interview on Sunday. “You don’t hear about stuff like that around here.” She said her son was friends with the younger Christopher Rhoden. She described Dana Rhoden as a woman with “a heart of gold” who gave her clothes and money when her home burned down last year. The exact timing of the shootings remains unclear. Authorities got the first 911 call shortly before 8 a.m. on Friday; the second came several hours later from another location. Two of the crime scenes are within walking distance of each other along a sparsely populated, winding road that leads into wooded hills from a rural highway. The third residence is more than a mile away, and the fourth home is on a different road, at least a 10-minute drive away. Todd Beekman, who owns an outdoors shop a few miles from the crime scenes, said at least one customer came in to stock up on ammunition after hearing about the shootings. But Beekman and others hanging out there midday on Saturday said they weren’t concerned for their own safety because it’s an area where residents know and look out for each other. “The word spread pretty fast, as it does in any rural area,” Beekman said. “Everybody’s kind of their own brother’s keeper down here.” AP
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Editor: Lyn Resurreccion • Tuesday, April 26, 2016
A9
Test finds radioactive residue in Belarus milk
A WORKER feeds cows at a farm in the village of Vorotets, on land, just 45 kilometers north of the Chernobyl nuclear power plant in Ukraine, where a reactor explosion and fire on April 26, 1986, belched a cloud of smoke infested with radioactive particles over much of northern Europe. AP/SERGEI GRITS
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UBAREVICHI, Belarus— On the edge of Belarus’s Chernobyl exclusion zone, down the road from the signs warning “Stop! Radiation,” a dairy farmer offers his visitors a glass of freshly drawn milk.
The Associated Press (AP) reporters politely decline the drink but pass on a bottled sample to a laboratory, which confirms it contains levels of a radioactive isotope at levels 10 times higher than the nation’s food-safety limits. That finding on the eve of the 30th anniversary of the world’s worst nuclear accident indicates how fallout from the April 26, 1986, explosion at the plant in neighboring Ukraine continues to taint life in Belarus. The authoritarian government of this agriculture-dependent nation appears determined to restore long-idle land to farm use—and in a country where dissent is quashed, any objection to the policy is thin. The farmer, Nikolai Chubenok, proudly says his herd of 50 dairy cows produces up to 2 tons of milk a day for the local factory of Milkavita, whose brand of Parmesan cheese is sold chiefly in Russia. Milkavita officials called the APcommissioned lab finding “impossible,” insisting their own tests show their milk supply contains
traces of radioactive isotopes well below safety limits. Yet, a tour along the edge of the Polesie Radioecological Reserve, a 2,200-square-kilometer ghost landscape of 470 evacuated villages and towns, reveals a nation showing little regard for the potentially cancercausing isotopes still to be found in the soil. Farmers suggest the lack of mutations and other glaring health problems, suggest that Chernobyl’s troubles can be consigned to history. “There is no danger. How can you be afraid of radiation?” said Chubenok, who since 2014 has produced milk from his farm just 45 km north of the shuttered Chernobyl site, and 2 km from the boundary of a zone that remains officially off-limits to full-time human habitation. Chubenok says he hopes to double his herd size and start producing farmhouse cheese on site. His milk is part of the Milkavita supply chain for making Polesskiye brand cheese, about 90 percent of which is sold in Russia, the rest domestically. The World Bank identi-
fies Russia as the major market for Belarusian food exports, which represent 15 percent of the country’s export economy. Since rising to power in 1994, President Alexander Lukashenko— the former director of a state-owned farm—has stopped resettlement programs for people living near the mandatory exclusion zone and developed a long-term plan to raze empty villages and reclaim the land for crops and livestock. The Chernobyl explosion meant 138,000 Belarusians not directly struck by fallout had to be resettled, while 200,000 others living near the prohibited zone left voluntarily. One of the most prominent medical critics of the government’s approach to safeguarding the public from Chernobyl fallout, Dr. Yuri Bandazhevsky, was removed as director of a Belarusian research institute and imprisoned in 2001 on corruption charges that international rights groups branded politically motivated. Since his 2005 parole he has resumed his research into Chernobyl-related cancers with European Union sponsorship. Bandazhevsky, now based in Ukraine, says he has no doubt that Belarus is failing to protect citizens from carcinogens in the food supply. “We have a disaster,” he told the AP in the Ukraine capital, Kiev. “In Belarus there is no protection of the population from radiation exposure. On the contrary, the government is trying to persuade people not to pay attention to radiation, and food is grown in contaminated areas and sent to all points in the country.” The milk sample subjected to an
30
Number of years after the April 26, 1986, explosion of the Chernobyl nuclear power plant
AP-commissioned analysis backs this picture. The state-run Minsk Center of Hygiene and Epidemiology said it found strontium-90, a radioactive isotope linked to cancers and cardiovascular disease, in quantities 10 times higher than Belarusian food, safety regulations allow. The test, like others in resource-strapped Belarus, was insufficiently sophisticated to test for heavier radioactive isotopes associated with nuclear fallout, including americium and variants of plutonium. The Belarusian Agriculture Ministry says levels of strontium-90 should not exceed 3.7 becquerels per kilogram in food and drink. Becquerels are a globally recognized unit of measurement for radioactivity. The Minsk lab informed the AP that the milk sample contained 37.5 becquerels. That radioactive isotope is, along with cesium-137, commonly produced during nuclear fission and generates most of the heat and penetrating radiation from nuclear waste. When consumed, scientists say strontium-90 mimics the behavior of calcium in the human body, settling in bones. Milkavita chief engineer Maia Fedonchuk rejected the findings.
“It’s impossible. We do our own testing. There must have been a mix-up,” she said, adding they test samples from every batch of milk they receive from Chubenok and do an “in-depth” analysis every six months. She said the plant’s own lab analysis indicates its overall milk supply contains an average of 2.85 becquerels per kilogram. Health officials say the danger level posed by low levels of radioactive isotopes depends greatly on length of exposure and individual physiology. Notably, the regional free-trade bloc that includes Belarus and Russia permits higher levels of strontium-90 in goods of up to 25 becquerels per kilogram, still lower than that detected in the AP-commissioned test. The question is whether anyone in authority is positioned to identify the true level of risks in produce from farms on the frontier of Belarus’s prohibited zone. The deputy director of Belarus’s Institute of Radiobiology, Natalya Timokhina, said Belarus permits food producers to conduct their own food-safety monitoring and lacks the lab equipment necessary to identify the presence of americium, which is estimated to be present in about 2 percent of Belarus’s top soil and is expected to remain a health risk for another 270 years. “Onetime ingestion of contaminated food is not very dangerous,” Timokhina said. “What’s dangerous is the accumulation of radionuclides in the body.” Ausrele Kesminiene, a doctor in the cancer research unit of the World Health Organization (WHO), said the consumption of radioactive food is linked chiefly to the development of cancer in the thyroid, a gland in the neck that produces body-regulating hormones. Thyroid cancer is typically not fatal if diagnosed early. WHO officials say they are dependent on reports from sister agencies in Belarus to alert them to cancer clusters or other signs of unresolved Chernobyl-related dangers. Gregory Hartl, a WHO spokesman in Geneva, said the agency had no authority to regulate or oversee food safety—even products exported to other countries—because that is a domestic responsibility. “Radiation effects and the development of cancers and the effects on the region are something which go on over a long, long period. So we haven’t seen the end of it” Hartl said. “Undoubtedly there is going to be some increase in cancers.” Hartl said WHO officials have not received “any red flags” from Belarus. Environmentalists critical of Belarus’s Chernobyl cleanup record says that’s hardly surprising, since the government has funded no machinery to scrutinize corrupt practices in the food industry. As a result, they say, no Belarusian food maker has ever been prosecuted for using ingredients or producing goods containing excessive levels of radioactive materials. AP
CHINA BILLIONAIRES CLOSER TO TAKING PROPERTY ARMS PRIVATE
T
WO of China’s largest developers took steps that moved them closer to potentially switching their stock-market listings from Hong Kong to China, where their top executives have said they can get higher valuations. On Monday Dalian Wanda Commercial Properties Co., controlled by billionaire Wang Jianlin, requested a suspension of its shares pending an announcement pertaining to an exchange code on mergers and takeovers, as Wang pursues a buyout plan that will help him relist the shares on the mainland. Meanwhile, Evergrande Real Estate Group Ltd. shares surged by the most in more than a month in Hong Kong after it said on Sunday it had agreed to pay 3.6 billion yuan ($555 million) to acquire a stake in Shenzhen-listed China
Calxon Group Co., an acquisition that could signal the company’s chairman Hui Ka Yan is also considering a similar move. While both companies have suggested they are motivated by a desire to seek higher valuations on the mainland, the two deals face very different chances of success, analysts say. JPMorgan Chase and Co.’s Cusson Leung noted that while Evergrande said the deal would help it get access to the A-share market, privatizing and relisting in China “is not that feasible.” As Evergrande is a “red chip” company incorporated offshore, it faces far more obstacles than Wanda Commercial, which is incorporated in China and has an “Hshare” listing, Leung said in a note on Monday. He echoed sentiments expressed by Citigroup Inc. prop-
erty analyst Oscar Choi, who wrote in a note before the Calxon deal was announced that for Evergrande, de-listing in Hong Kong and relisting faces considerable hurdles that could make the process too costly and lengthy to make sense. Unwinding Evergrande’s offshore structure and transferring assets to China in order to inject them into Calxon’s A-share listing could trigger huge tax liabilities for Evergrande, Choi wrote. Hurdles include transferring ownership of Evergrande’s stakes in other Hong Kong-listed companies. Evergrande owns 75 percent of Evergrande Health Industry Group Ltd. and majority stake of Internet service provider HengTen Networks Group. Wang, on the other hand, is so confident he’ll be able to take Wanda commercial private and relist
it on the mainland that he has offered investors a guaranteed return if they help him buy the 14.41 percent of the company’s H-shares he and other Chinese domestic investors don’t already own. If the developer has not gone public on a mainland exchange by either August 31, 2018, or two years from the Hong Kong delisting, Wanda Group will buy back the shares at a level guaranteeing a 12-percent annual return for domestic investors and 10 percent for those overseas. To back its pitch, Wanda says valuations for some property companies listed on the mainland are more than triple those of comparable stocks traded in Hong Kong. “Evergrande might be considering to privatize the H shares and list A shares, through Calxon,”
Zhou Chuanyi, a credit analyst at Lucror Analytics wrote in the note on Monday. “We view the acquisition as credit negative,” because the company is “burning cash” and a possible relisting will lead to poor transparency, the analyst wrote. Evergrande has become the most indebted of 198 listed Chinese realestate firms, Bloomberg-compiled data show. There is a 6.2-percent probability it will miss payments in the next 12 months, up from 1 percent a year ago, according to the Bloomberg Default Risk model that tracks metrics including share performance, liabilities and cash flow. Jimmy Fong, investor relations official at Evergrande, said on Thursday a property market pickup had improved liquidity and it could meet near-term obligations. Bloomberg News
briefs
SALES OF PRINCE ALBUMS SPIKE AFTER HIS DEATH SALES of Prince’s music have skyrocketed since the artist’s death last week. According to Nielsen Music, in the three days following his death there were 2.3 million Prince song sales, including nearly 1 million on Thursday. Sales were led by Purple Rain, followed by When Doves Cry, Little Red Corvette and Let’s Go Crazy. Albums sales were led by The Very Best Of Prince. The 57-year-old singer was found dead on Thursday at his Paisley Park compound in suburban Minneapolis. An autopsy was conducted on Friday. Authorities said it could be weeks before the cause of death is released. Carver County Sheriff Jim Olson said Prince’s body had no signs of violence and there was nothing to suggest suicide. AP
BOMBHIT BRUSSELS SUBWAY STATION OPENS A MONTH AFTER ATTACKS BRUSSELS—The Brussels subway station where 16 people were killed by a suicide bomber has reopened just over a month after the attacks. Security remains high across the underground network, which was hit during the March 22 peak morning travel period. The opening of the Maelbeek station early on Monday brought the Belgian capital’s underground network back up to full capacity. Brussels Metro Spokesman An Van Hamme said “there wasn’t any structural damage. So there were a few works that had to be done.” Commuters can leave messages on a tribute wall in the main station entrance. Bomb-hit Brussels airport is still not back up to capacity. AP
RECONSTRUCTION OF NEPAL’S DAMAGED HERITAGE SITES BEGINS KATHMANDU, Nepal—Nepal’s prime minister has announced the start of reconstruction of heritage sites in the capital that were damaged by an earthquake that devastated the country one year ago. Prime Minister Khadga Prasad Oli offered prayers on Monday at the 17th century Anantapur temple, which was damaged in the April 25, 2015, earthquake along with more than 600 other historic structures in Nepal. Oli said work would begin on rebuilding the temple and three other heritage sites in Kathmandu. Nepal has been criticized for a delay in reconstruction of the hundreds of thousands of homes damaged in the earthquake despite foreign donors pledging $4.1 billion in aid. The 7.8-magnitude quake left nearly 9,000 people dead and millions homeless. AP
INDIA REVOKES VISA FOR GERMANYBASED UIGHUR ACTIVIST NEW DELHI—India has revoked a visa given to a Germany-based ethnic Uighur activist to attend a conference at the headquarters of the Tibetan government-in-exile in northern India this month. Home Ministry Spokesman K.S. Dhatwalia on Monday confirmed the cancellation of Dolkun Isa’s visa, but refused to say why. Isa told Indian TV news channel TimesNow the government notified him that his electronic visa had been canceled. He said there was no explanation but speculated it may have been because of Chinese pressure on the Indian government. Isa is on a Chinese list of alleged terrorists. China’s leaders are concerned about violence in the far western region of Xinjiang, which is home to the Uighurs, a mostly Muslim ethnic Turkic minority critical of Beijing’s rule. AP
A10 Tuesday, April 26, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Debates changed Philippine politics
F
INALLY, in 2016, the Philippine national election campaign came into the 21st century, thanks to the four debates sponsored by the Commission on Elections (Comelec) and various news outlets.
Beginning on February 21st in Cagayan de Oro, the public spent over seven hours watching the presidential candidates show themselves, their ideas and the contrast with their opponents. Vice-presidential candidates—for the first time—took the center stage for over two hours. Looking back on this series of events, it was definitely a work in progress for the Comelec, the press and media, and for the candidates. Nothing like this had been done in the Philippines before. Of course, there had been forums in the past, but this was the first time that the presentation of the candidates was made through a formal debate-style structure—and it showed. The criticisms of the way the candidates conducted themselves and the way the moderators handled the discussions are certainly valid. But this was uncharted territory for all involved. At times, it was a street brawl. At other times, the questions and answers were boring, giving little insight into the candidates and their ideas. We, of course, would like to think that the CNN Philippines and the BusinessMirror vice-presidential debate raised the standard of professionalism. However, it was a learning process for everyone, and each debate added experience and knowledge to the process. No one can legitimately complain that the final presidential debate, held at the University of Pangasinan in Dagupan City, illustrated how far both the debate organizers and the candidates had progressed in the past two months. Bear in mind that the core issues for discussion never changed, and the objective was to find a way to let the candidates elaborate on their ideas. That is not easy without sounding repetitive, both in asking and answering the questions. The most important result of these debates is that it has changed Philippine politics. That is not an overstatement. Used to speaking before a sea of friendly faces, now candidates have to deal with their supporters being only a minority in the audience. Used to saying whatever they want, the candidates now face immediate challenges to their ideas from the moderators and panelists, apart from the other hopefuls. The people also gained much from this experience. Access to the debates was available to everyone through a variety of outlets, including television, radio and Internet. There was no way for the candidates to run and hide no matter how uncomfortable they became. The public saw every drop of sweat, every scowl and every smile. Political pundits look back at the first nationally televised debate in the US between John F. Kennedy and Richard Nixon, saying that it influenced the outcome. Kennedy looked fresh and full of vitality; Nixon came off as dark and sinister. Those that listened on radio did not have that impression. It is too early to say that the debates here will have that impact. But one thing is sure: Philippine politics has changed for the better.
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How safe are we from cyber criminals? Manny B. Villar
THE ENTREPRENEUR Part Two
O
NE of the questions that came to mind following the theft of $81 million from the Bangladesh central bank’s account with the Federal Reserve Bank of New York was the safety of the international reserves held by the Philippine government through the Bangko Sentral ng Pilipinas (BSP).
Are our international reserves intact? Where are these kept? Is there
a mechanism in place to monitor their movements in real time? Does the BSP have enough safeguards to prevent a similar theft from happening with its accounts? Every month the BSP reports on the country’s gross international reserves (GIR), which indicate the country’s capability to pay foreign loans and imports, among other external obligations. As of end-March 2016, the country’s GIR stood at $82.6 billion. However, I would like to find out where the BSP invests or deposits the currency portion of the reserves. In addition to foreign currencies, the reserves also include gold (mainly purchased from local producers), bonds
and deposits with the International Monetary Fund (IMF). Reports on the ongoing investigation into the Bangladesh heist focus on the theft itself and the involvement of different parties. I have yet to see a report on the safety condition of the BSP accounts in other institutions, considering that the $81 million was stolen from the BSP’s peer in Bangladesh. With no adverse reports coming out of the BSP, I can only assume and hope that our reserves are intact and safe. At least, the BSP has given assurances about its vigilant monitoring of the banking system. In a statement issued after the Bangladesh case, the BSP said it was implementing a comprehensive risk-based approach that is aligned
‘The worst may yet come’ John Mangun
OUTSIDE THE BOX
W
HILE the new campaign slogan of the Liberal Party is “The best is yet to come,” the reality is, what we should be saying is, “The worst may yet come.”
The political cycle of 2016 has claimed another government. Austria’s far-right Freedom Party candidate has come at the top in the first round of presidential elections. The significant factor is that this is the first time since World War II that candidates from Austria’s two main parties did not make it to the runoff. The Freedom Party took 36 percent of the votes; the Social Democrats and the center-right People’s Party each took about 11 percent of the vote. The pattern of the political cycle is that an economic decline becomes great enough that the public’s confidence in government falters to the extent that the existing political establishment and elite come under intense pressure. If the economic
decline becomes more pronounced, the politics becomes more fragile, leading to more economic decline. Like it or not, economies need political stability. However, right now, this idea of “continuity” is not what the people are looking for. The reason for this political shift is that the global middle class is getting killed no matter where you look. The share of wealth owned by the middle class declined in every part of the world on a relative basis since 2000. Globally, it has gone from 38 percent to 32 percent. In Europe we have a drop from 47 percent to 41 percent. The Asia-Pacific region has experienced the largest fall, from 50 percent to 42 percent. Even povertybound Africa has seen its middle-
With no adverse reports coming out of the BSP, I can only assume and hope that our reserves are intact and safe. At least, the BSP has given assurances about its vigilant monitoring of the banking system. In a statement issued after the Bangladesh case, the BSP said it was implementing a comprehensive risk-based approach that is aligned with international best practices.
with international best practices. Bank supervision, according to the BSP, is focused on ensuring the safety and soundness of individual banks. This is done by periodic onsite examination of banks, as well as off-site supervision on a continuing basis. The BSP also has specialist examination teams, which evaluate the effectiveness of a bank’s prevention program to ensure bank handling of the risks out of information technology and cybersecurity issues, money laundering and terrorist financing. Despite the safeguards, and considering the increasing number of cyber thefts, the risks remain. BSP Deputy Governor Nestor A. Espenilla Jr. was quoted in a recent news report as saying, “no banking system is safe,” because transfers of illicit funds are
The pattern of the political cycle is that an economic decline becomes great enough that the public’s confidence in government falters to the extent that the existing political establishment and elite come under intense pressure. If the economic decline becomes more pronounced, the politics becomes more fragile, leading to more economic decline. class wealth go from 37 percent to 32 percent. While former Interior Secretary Manuel A. Roxas II can say to the members of the Makati Business Club, “Look at your bank accounts,” these men and women are not the ones from whom political change happens. The middle class in the Philippines is not estimated by wealth but by income, and the income estimate is suspect, ranging from P330,000 to P4 million per year. That group, though, comprises about 25 percent of Filipino families. The government likes to highlight
happening on a global scale. On March 14 this paper quoted Philippine National Police (PNP) Director General Ricardo C. Marquez as saying local banks have been losing billions of pesos to hackers. Marquez said in the report that in November 2015 one of the country’s largest banks approached the PNP Anti-Cybercrime Group (ACG) for help in resolving theft by cyber criminals, which had caused “very significant losses” for the bank. The PNP chief said he had directed the ACG to take more proactive actions in protecting the economy from cyber criminals. Proactive is good, but I believe that addressing cybercrime should be forward-looking, because this new technology-based activity seems to enjoy a step ahead of law enforcement and is getting more sophisticated. Victims of cyber criminals, although not in the scale of the Bangladesh heist, are increasing. According to the web site of the Australia and New Zealand Banking Group (ANZ), bank customers are seen as potential target for fraudulent activities. And ANZ cited the following threats faced by bank customers: electronic fraud, identity theft, credit-/debitcard fraud and check fraud. No doubt about it, cybercrime is going on, and it’s getting big. For comments, e-mail mbv.secretariat@ gmail.com or visit www.mannyvillar.com.ph.
poverty reduction, but it is not the “poor” that are rising up. All economies, including the Philippines, are fragile right now. “Heroes” can turn to “zeros” very quickly, as we have seen with Brazil. Too much government debt, which we have not had a problem with in the past 10 years, or government underspending, which we have struggled with since 2010, can turn the economy ugly before you know it. If the people “rise up” due to economic problems, it will not be the “peasants” carrying the torches and pitchforks. It will be the middle class coming from their condos and houses and driving cars trying to protect their wealth. The candidates talk in broad strokes about the economy and only talk specifics about the government’s programs for the lower economic classes. If the economy performs below expectations through 2016, they are going to wish they had addressed the concerns of the middle class. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.
opinion@businessmirror.com.ph
Opinion
Empty rhetoric
Facing global challenges
BusinessMirror
Cecilio T. Arillo
DATABASE
I
CAN describe in relative perspective the last presidential debate on Sunday night in Pangasinan in one word: rhetoric. Yes, empty rhetoric, to be more specific, because none of the candidates had sincerely offered meaningful explanations and concrete solutions to the country’s intractable problems of mass poverty, economics and national security.
Mass poverty is the root of armed insurgencies in the country (Communist Party of the Philippines-New People’s Army) and Moro rebellion, a very serious national security problem that exacerbates the crime situation, and this is why, in times of economic hardship, there is always a sudden surge in the crime index. “It also explains why [the] government’s capability to provide public and social services is perpetually strained, as slum communities multiply faster than it can cope with,” a Philcoman Research Institute Inc. (PCMRII) study said. A president needs the clearest understanding of what he or she must really do to confront the problems in terms of strategic policy direction and implementation. Unfortunately, none of the candidates, maybe because of limited time, has offered a concrete solution beyond merely repeating the traditional belief that economic growth had eventually trickled down to the poor. The share of the higher-income group, according to the PCMRII study, has been increasing almost entirely at the expense of the lower-income groups. Real wages, when adjusted for inflation, have been declining since 1986. Here are other stark details why mass povert y has become intractable: 1) The poor have little access to land. Despite three generations of agrarian-reform programs, land distribution is still very badly skewed. 2) The Philippines has a high population growth rate—the 12th highest in the world—and it continues to grow at a rate of 1.89 percent a year. According to the 2010 census results, the nation’s population increased by almost 16 million from the figure found in the 2000 census results. The growth rate has slowed slightly from the previous census in 2014, down to 1.89 percent from 2.34 percent. To figure out how many people live in the Philippines in 2014, we can look at data provided by the Philippine National Statistics Office. Projecting this data forward, using the 1.89-percent growth rate, gave us a population of 98,734,798 in 2013 and a population of 100,617,630 in 2014. 3) The economic policies of the past generation beginning at the end of the Marcos regime in 1986 (one
generation is 30 years) have failed to alleviate mass poverty. Worse, many public policies are actually anti-poor, largely biased against people in rural areas. The simple reason for this is that public policy is largely made by those who lived in the cities. 4) The post-Marcos administrations have always said alleviating poverty was their first concern. Yet, they seldom put their money where their mouths were. For instance, after analyzing budget trends, the National Economic and Development Authority concluded that the bulk of public money actually went to the richer regions. 5) The tax system takes, in percentage terms, more from the poor than from the rich. Tax evasion (mostly by the rich) costs more than P400 billion a year in lost revenues. The post-Marcos administrations had no effective capital-gains tax, and taxes on real property were extremely low and lightly enforced. Any strategy against poverty must directly tackle the issue of inequality, not merely by spreading wealth, but by sharing more equitably the resources for development by communities and a better distribution of the burden of taxation. Even the education policy is loaded against the poor. Collegeentrance examinations, because they use English, favor students from urban homes. The government, thus, subsidizes public universities, such as the University of the Philippines, where enrollment is inexpensive at an average of P24,000 annually for every student, but where most students belong to the upper class. Like the economy, national politics still has a duality. Side by side with the politics of patronage and favoritism, the country now has a modern political community largely based in Metro Manila and other big cities. The urban elites have been influencing national politics. Through their control and patronage of uncritical media practitioners, they have begun to impose their own standards on legislators who are still overwhelmingly elected by rural constituencies. The PCMRII revealed that there is no greater challenge to the nation than the unification of the two nations into one, not by bringing down the rich to the level of the poor, but by raising the poor nearer to the status of the rich. To reach the writer, e-mail cecilio.arillo@gmail.
Edgardo J. Angara
S
EVERAL of the issues we face as a nation have both national and global dimensions. The recent hacking of the Commission on Elections (Comelec) data involved personal information of some 55 million registered voters. Global security firm Trend Micro was responsible for bringing to light Comelec’s massive data leak. Foreign hackers allegedly perpetrated the laundering of $81 million from the Central Bank of Bangladesh through several Philippinebased casinos and Chinese nationals. The US Federal Bureau of Investigation (FBI) is probing into the biggest cyber heist at Bangladesh’s formal request. Clearly, some national problems cannot be solved by a country all by itself. For one, it’s inconceivable for us alone to deal with the terrorist threat from Islamic State of Iraq, who announced last December that it considered the Philippines
one of its new breeding grounds for jihadists. We have on our own initiative brought to the United Nations Permanent Court of Arbitration our ongoing maritime dispute with China over the West Philippine Sea.
Please e-mail your letters to the editor to oped@businessmirror.com.ph. Letters chosen for publication in this section are edited for brevity and clarity. WE are writing to clarify the issues raised in the news article, “Church official, group slam govt for delay in release of El Niño funds,” published in the BusinessMirror on April 22. The article mentioned that National Secretariat for Social Action, Justice and Peace/ Caritas Secretariat Fr. Edwin Gariguez said the Department of Social Welfare and Development (DSWD) claimed that it has Quick Response Fund (QRF) of P1.32 billion and additional fund of P6.7 billion for cash for work (CFW), but these funds were not yet fully downloaded to local government units (LGUs). This is despite the request of LGUs
Our invocation of international law and treaty has been backed up by our allies, like the United States, Japan and Australia, and other like-minded countries committed to the international rule of law and treaty obligations. While the brunt of El Niño-induced heat waves and droughts is experienced locally, scientists have already stated that the overall pattern of climate change—exacerbating these weather stresses—is a human-induced global phenomenon. Environment Secretary Ramon Paje signed the climate agreement reached in Paris last December, affirming our commitment to reduce carbon emissions by 70 percent before 2030. However, fulfilling this commitment will be meaningless if the other 195 countries who agreed to the Paris accord will not follow their so-called Intended Nationally Determined Contributions. The sluggishness and slowdown of today’s global economy
have started in China and in the developed West. But that does not mean Asean will be immune from its knock-on impact. The essential point I’m suggesting is that international problems surely require cross-border cooperation for solutions. But even seemingly domestic matters, like tax evasion, drug trafficking and crime, cannot be effectively solved without the assistance and collaboration of friends abroad. In one word, the nation must foster good relations and mutually beneficial arrangements with other countries to face down some of our biggest internal challenges. And as the official representative of and spokesman to the international community, the next president should be at the forefront of cultivating these good relations. In diplomacy, what one says weighs as heavily as what one does. E-mail: angara.ed@gmail.com.
Where will the money for promised devt come from? Ernesto M. Hilario
ABOUT TOWN
W
ITH less than two weeks to go before 54 million voters troop to the polls, all the national candidates, from president to vice president and senators, are promising the moon and stars to the people in the hope that they would prevail in the upcoming political exercise.
What’s interesting to note is that the closer we move to election day, May 9, the candidates are offering voters basically the same things: an end to pervasive corruption; more public infrastructure; better and more efficient delivery of social services, such as education and health; protection of the environment, among many others. What this tells us is that the political party system in this country does not offer us a real choice. While the Democratic Party in the US adheres to a liberal ideology and the Republican Party is conservative by nature, here, the various parties are distinguished only by name, not by unique platforms or political philosophies. The dominant party or coalition in one administration can easily break up in the next, as members shift loyalties to those who wield political power. In other words, in our political system, it’s the personalities that count, not platforms. This development—or retrogression—bodes ill for real choice in hilippine elections. In any event, if all the candidates can offer us are empty, bombastic
or flowery promises, it’s our turn to ask: How do you propose to finance all your high-falutin promises? That’s precisely what former National Treasurer Leonor Briones, lead convenor of the budget watchdog Social Watch Philippines and University of the Philippines professor, wants to know. After all, infrastructure projects cost billions in taxpayers’ money. So do education and health facilities. You need to pay for additional police personnel and equipment to effectively maintain peace and order. And you need billions more to acquire jet planes, sophisticated naval vessels and missile systems to defend our territorial integrity from foreign aggressors. What is likely to happen is that the next administration could end up imposing new taxes and resorting to heavy borrowings to finance all the projects that it promised the electorate. Briones suggests that, for the next administration to fulfill its promises, it must ensure that all government-owned and -controlled corporations remit 50 percent of their income to the national government
DSWD clarifies report on El Niño funds MAIL
Tuesday, April 26, 2016 A11
for assistance. He mentioned that a ranking official of Autonomous Region in Muslim Mindanao confirmed that their request has not been acted on despite follow-ups. We would like to clarify that the proposed funds to support the implementation of CFW and livelihood interventions for El Niño, amounting to P6.7 billion, has not been released by the Department of Budget (DBM). However, despite this, the DBM allowed us to use the QRF amounting P1.32 billion and regular funds to respond to El Niño requirements. On the P1.32 billion 2016 QRF, we would like to share with you that, out of the amount, the DSWD has released P739,492,203.33 as of April 19, covering the assistance for El Niño-affected families nationwide through the LGUs. The amount includes the cost of food assistance and the implementation CFW. It may be significant to mention that the ARMM has its own fund source. Even with the separate funding, the DSWD provided to the DSWD-ARMM P389,811,605 since 2015 to augment their resources for El Niño. The amount was utilized for the implementation of CFW in El Niño-affected areas. To date, the P1.32 billion 2016 QRF has been exhausted. However, an additional QRF
amounting P662,500,000 was provided by the DBM. Aside from this, the DSWD also draws funds from the climate-change adaption and mitigation (CCAM) fund to augment its support to El Niño-affected LGUs. With the additional QRF CCAM funds, the DSWD has downloaded P615,376,370 through DSWD-Field Office XII intended for El Niño-affected areas in the region and in ARMM. Of the amount, P256,760,050 was earlier earmarked from the 2016 QRF, P190,560,300 came from the additional QRF, and P168,056,020 from the CCAM funds. For the information of Gariguez, the DSWD in Northern Mindanao has also engaged the support of the Diocese of Malaybalay in augmenting the DWSD social workers and local social-welfare office personnel to ensure the quick distribution of relief goods to families affected by drought in the province. Along with the rest of the government, the DSWD recognizes the urgency of responding to the situation of hunger affecting the poor in many parts of the country. We hope that this clarification finds space in your newspaper. Cezario Joel C. Espejo Director, Social Marketing Service, DSWD
as mandated by law; streamline the brackets for high-earning tax payers; reform or rationalize excise taxes, investment incentives; and implement reforms in tax administration and efficient tax collection. The Philippines is committed to achieving the Sustainable Development Goals enumerated by the United Nations. These consist of 17 sustainable goals and 169 targets. Among the goals is to abolish absolute poverty by 2030. Can we do it within a span of 14 years? If the next several administrations are really serious about ending absolute poverty, they will have to harness more resources, whether through new taxes, borrowings and stricter implementation of tax laws.
Piracy and kidnappings in Sulu Sea a disturbing development
RECENT news reports indicate that the Abu Sayyaf has adopted a new terror tactic in addition to engaging government forces in combat, kidnapping innocent foreigners for huge ransom and beheading captives. This is kidnapping in the high seas, particularly in the Sulu Sea that links our southernmost islands with Indonesia and Malaysia. Suspected Abu Sayyaf gunmen have reportedly abducted 18 Indonesians and Malaysians in three attacks on tugboats in Philippine waters. They are now demanding P50 million ($1.1 million) for the release of the Indonesian crew. The route to the Sulu Sea carries $40 billion worth of cargo each year. This route is taken by supertankers from the Indian Ocean that cannot use the crowded Malacca Strait. Concerns over maritime attacks by suspected Islamist militants have
disrupted the coal trade. Two Indonesian coal ports have already suspended shipments to the Philippines. The Indonesian Navy has instructed all commercial vessels “to avoid piracy-prone waters around the southern Philippines.” Malaysia has also warned ships sailing in the Celebes Sea and northeast of Sabah on the island of Borneo to stay clear of suspicious small vessels. The recent incidents of piracy and kidnapping in the Sulu Sea are reminiscent of what happened in Somalia years back. Somali pirates intercepted cargo vessels at will and took crewmen as hostages in exchange for huge sums of money. But piracy incidents waned when shipping firms hired private-security details and international warships began to patrol the high seas to deter further attacks. That’s also the same tack that the Philippines, Malaysia and Indonesia should take, after they meet to discuss possible joint patrols against piracy and kidnapping on a shipping route along their sea borders. The joint seas patrols are consistent with the principle enunciated by the Association of Southeast Asian Nations (Asean) that there must be free and open navigation in the region. The Abu Sayyaf appears to be stretching itself too thin by making its presence increasingly felt in the Sulu Sea. So we welcome the move by the three countries to conduct joint patrols to stop piracy and kidnapping in the high seas. The Abu Sayyaf must be brought to heel to deter them from committing more terror activities in our southern shores. E-mail: ernhil@yahoo.com.
Sovereign debt can be risky
F
IVE years after a sovereign-debt crisis almost destroyed the euro, Europe’s leaders have yet to address a crucial vulnerability: the threat to banks posed by losses on sovereign bonds. Finance ministers are planning to discuss the question on Friday. An answer is overdue. Governments have been going bust for centuries. Argentina, Russia and Greece recently reminded borrowers, in case memories needed refreshing, that sovereign bonds aren’t always safe. Yet, European regulators treat government bonds as risk-free when assessing the financial strength of banks. For the purpose of figuring out whether banks have enough capital to absorb potential losses, they often place zero weight on investments in sovereign debt. Naturally, therefore, banks buy a lot. That’s great news for a government like Italy’s, which sells more bonds than any other in Europe and relies on domestic banks to fund more than 90 percent of its total borrowing of €455 billion ($514 billion). No wonder Italian Finance Minister Pier Carlo Padoan says his government is “strongly against” any curbs on debt holdings. Having a pool of local buyers makes government borrowing easier and helps keep interest rates down, but it can worsen systemic risk. When a government’s creditworthiness begins to be questioned, banks holding its debt will be dragged down, too. With government debt accounting for 10.5 percent of bank assets, more than double the
euro zone average, Italy’s financial system is too fragile. It doesn’t help that the European debate on sovereign risk is entangled in a wider discussion about protecting depositors if a bank in the euro zone fails. The European Commission has proposed a mandatory system-wide deposit-insurance program, but Germany is unwilling to pay for other countries’ mistakes and wants the bloc’s banks to be less exposed to sovereign risks before it signs up. Euro-zone deposit insurance is needed, but Germany’s reservations aren’t unreasonable—especially when Europe’s rules fail to recognize that some government debt is safer than others. Trouble is, making those distinctions isn’t always easy. The financial crisis undermined the credibility of the rating agencies. A better guide to creditworthiness will have to be derived from market measures, such as bond yields or the credit-default swaps investors use to insure against default. (Investors currently charge Greece about 8.7 percent to borrow for a decade, compared with less than 0.2 percent for Germany and 1.4 percent for Italy.) In addition, the principle of safety first should apply. Whatever the exact formula, requiring banks to recognize that the government debt on their balance sheets is not risk-free is necessary. Making them raise extra capital against their ownership of such debt would discourage over-borrowing by governments and make the banks more resilient. Bloomberg View
2nd Front Page BusinessMirror
A12 Tuesday, April 26, 2016
DOE doesn’t see need for emergency powers T B L L
@llectura
HE demand is high, while the power reserve is thin. But the Department of Energy (DOE) said there is no power crisis, so there’s no need for the department to seek emergency powers for President Aquino to invoke Section 71 of the Electric Power Industry Reform Act. “We don’t see the need for emergency powers, because we are managing it,” said Energy Secretary Zenaida Y. Monsada on Monday’s briefing, referring to the country’s power situation, particularly on May 9, the election day. “We are learning things from last year and the previous election. At this point, there is strong cooperation among all stakeholders in the power sector.” Monsada’s predecessor, Carlos Jericho L. Petillla, recommended in July 2014 to the President to
9,000 MW Expected electricity demand for Luzon on election day, as against the 12,000-MW supply invoke Section 71 of the Epira to address a feared power shortage in Luzon that did not happen in the summer of 2015. Petilla’s pronouncement did cause quite a stir, because, for one, there
were controversies hounding the Executive branch on the Disbursement Acceleration Program during that time. Many were worried that there could be abuse of power if the President was granted emergency powers by Congress to address the tightness in power supply. “There is no need for such,” reiterated Monsada. “First, we are looking at supply, if it’s enough or not, and if there is enough reserve or not,” she added, when asked what could trigger the agency to recommend emergency powers to the President. For Luzon, she said electricity demand on election day could hit an average of 9,000 megawatts (MW), as against 12,000 MW of supply. This leaves 3,000 MW in power reserves. The 12,000-MW power-generating capacity already includes the much-awaited new gas plants from Lopez-led First Gen Corp. These are the 414-MW San Gabriel and the 97-MW Avion plants. “They are now in the testing stage,” Monsada said. “There are plants that are coming in that are not initially part of the forecast.”
The DOE chief, however, could not assure a brownout-free election day, because it could not predict if any of the power plants would suddenly conk out. “The DOE cannot say that there won’t be any blackout, because we are not the power-plant operators. But we will assure the public that we are doing all the preparations necessary to avert such incident. That is why we are appealing to all generation companies in Luzon to make all the necessary preparations. They must do all the repairs before election,” she said. For the Manila Electric Co., the utility firm’s president, Oscar Reyes, said the Interruptible Load Program is one way to help avert a possible power crisis. “I think, we are working very well since 2014. We are also monitoring the maintenance schedule of power plants, hoping that it is all spread out. We also hope that new power plants—the San Gabriel and the Avion—will be activated before elections. At the end of the day, it all boils down to supply,” Reyes said, when asked to comment.
www.businessmirror.com.ph
Projects. . .
C A
railway from Malolos to Tutuban. It will feature 10 stations and a depot in Valenzuela. To be implemented by the Department of Transportation and Communications, the project will be funded by the Japan International Cooperation Agency and will be operational by 2020. The project with the smallest cost is the P231.21-million Local Government Units (LGUs) Investment Program Supplement 3. It will be financed partly by the government of Germany and will be completed in 2017. It aims to facilitate the access of LGUs in Mindanao to viable financing for local development, such as local roads, bridges, sanitation, drainage and flood control, water supply, public market and bus terminal, and rehabilitation and construction of public facilities. Under the A r royo adminis-tration, government data showed that Neda Board project approvals reached P1.36 trillion in 2004 to 2010. Government data showed that the biggest projects approved were the P47.93-billion Laiban Dam Project and the second part of the first phase of the Northrail project costing P35.03 billion. The Laiban Dam Project aims to provide long-term water supply— about 1,900 million liters per day (MLD), or 22 cubic meters per second of water— for Metro Manila. It also intends to address the
existing 1,122 MLD of watersupply gap in the metropolis and augment power supply in Metro Manila through a hydroelectric power plant that is projected to produce about 25 megawatts of power. However, the Neda expressed its “reservations” about the “takeor-pay” arrangement between the Metropolitan Waterworks and Sewerage System and project proponent San Miguel Bulk Water Co. Inc. in June 2009. A provision that is common in the energy sector, take-or-pay clauses require a buyer to pay for specified quantities of a product from a seller, even if the buyer is unwilling or unable to take such quantities. This means that the Philippine government will have to pay for unused water from the Laiban Dam. Meanwhile, the second part of the first phase of the Northrail project involves the completion of Phase 1, which will have approximately 48 kilometers of double, narrow-gauged rail track. The project is being supported by the Bases Conversion Development Authority and the Philippine National Railway. The rail track will traverse the towns of Malolos and Calumpit in Bulacan, and Apalit, Minalin, Sto. Tomas, San Fernando, Angeles and Clarkfield in Pampanga. The bulk of the project, or 83 percent, will be financed through official development assistance under the Chinese Concessional L oan, whi le t he rest w i l l be composed of local and foreign commercial loans.
Infra crisis imminent sans PPP Act–Palacios C A
with the passage of the proposed PPP Act— the Philippines could plunge into a catastrophe, termed as “infra crisis,” something that will require extraordinary measures to be addressed. “What we have now is an infrastructure gap, wherein the needs of the public for public services, delivered by public
infrastructure, [are] not being met by our current public infrastructure,” he told the BusinessMirror. “We don’t have an infrastructure crisis, yet. But, if we do not act now, the gap may turn into an infrastructure crisis.” He explained that difference between a gap and a crisis in infrastructure is purely qualitative. “A gap is something that can be solved following normal government efforts.
What we are doing now is a lot, but we need to do it quickly and more. Examples of these are procurement, disbursement, proper delivery of right of way, and the likes,” he said. But a crisis, he said, is something that will require the action of all branches of the government. “It needs extraordinary government measures. For example, in the 1990s, we had a water crisis, and the government had to pass a water-crisis law. A crisis is when you still have current public infrastructure and is unable to deliver the required public infrastructure, but the need is acute,” Palacios said. “Addressing a crisis needs a policy response from the Legislative, the Executive and the Judicial branches of government,” he said. “We could still prevent that with the passage of the PPP Act.” But sadly, the PPP Act is as good as dead. In an interview with the BusinessMirror in mid-April, Speaker Feliciano Belmonte Jr. admitted that the chance for Congress to pass the said bill is “slim to none” due to the lack of time. He noted, however, that a flicker of hope still remains. This is if the Senate has a similar bill at the similar stage. Regrettably, the Senate version of the proposed PPP Act is still pending for second reading, while the House version of the bill is pending for third reading. Belmonte said there may be no more time for both chambers of Congress to pass the measure on third reading. Based on the legislative calendar, Congress sessions adjourned on February 3 as part of its preparation for the May national and local elections. Sessions will resume on May 23 until June 10. The two chambers will convene first as National Board of Canvassers before the approval of other pending priority bills.
‘Still hoping’
“WE’RE still hoping, and we will keep on pushing for the passage of the bill,” Palacios said. “We believe that after the elections, our lawmakers will see that this infrastructure bill is needed and will help solve our infrastructure gap.” When approved, the PPP Act will institutionalize the Project Development and Monitoring Facility, the PPP Governing Board and the contingent liability fund. The proposed amendments include the separation of regulatory and commercial functions of governmentowned and -controlled corporations, and
create a list of projects called “projects of national significance.” By virtue of being included on the list of projects of national significance, projects will be “insulated” from local laws, among others, by local government units. The proposed amendments also include allowing time-bound temporary restraining order and the extension of the period for Swiss Challenge to six months, from the current two-month period. Also, the piece of legislation will give the executive director of the PPP Center a fixed tenure, and will, likewise, make the said body a voting member of the Investment Coordination Committee and the Cabinet Committee of the National Economic and Development Authority.
Moral obligation
THAT is why former PPP Center Executive Director Cosette V. Canilao was aggressively pushing for the passage of the bill during her term. “It’s sad news. But, if the next administration is really serious in fast-tracking the infrastructure development in the country, then a very good venue to do that is to pass the PPP law,” she told the BusinessMirror. “The proposed law will hasten the procurements process from planning to bidding, and down to implementation.” She hopes the next president would have the moral audacity to influence Congress to pass the crucial piece of legislation. “Whoever the president would be, I hope he or she could morally persuade the existing Congress to pass the law within the three-week period that is available in May, after the elections. So that when his admin starts by July 1, infrastructure development will be faster,” Canilao said. Business groups are also hopeful for the passage of the PPP Act, as this could improve investor confidence in a sector that is still budding at this point in time. “Infrastructure development is needed to move economic growth to a higher level. From that perspective, it is unfortunate that the PPP Act will not make it in the 16th Congress,” European Chamber of Commerce of the Philippines External Vice President Henry J. Schumacher told the BusinessMirror. For his part, Makati Business Club (MBC) Executive Director Peter Angelo B. Perfecto said his group is saddened by the news, as there is still time left to consolidate a version of the bill in both houses of Congress. “It’s unfortunate that the PPP Act may
not get passed, despite the small window we still have left until the transition. The PPP Act consolidates and institutionalizes the reforms that the Aquino administration has put in place in infrastructure procurement, which has been recognized internationally as a solid framework,” he said.
‘Immediately certify the bill as urgent’ NEVERTHELESS both business chambers will continue to support the administration in its push to improve the sorry state of infrastructure in the Philippines. “The business community continues to support these reforms and will continue to be active participants in the PPP Program. Consistent with the views of MBC members on our Executive Outlook Survey, we believe that the economy will continue to grow, but the challenge remains on how best to make this growth exponential and inclusive, recognizing that infra development is a critical element in this effort,” Perfecto said. Schumacher noted that foreign chambers wish that the next set of lawmakers will see the importance of the infrastructure program, and will pass the bill, as it is necessary. “The foreign business community continues to support this legislation and trusts that the 17th Congress will have this as a priority on its agenda,” he said. Perfecto added: “Whoever will be the president come June 30 must immediately certify the bill as urgent in order to sustain our present momentum in closing our infra gap, both in terms of physical facilities and policy. The foundations have already been set, and the task now is to cement them and build upon it.” Since 2010, various implementing agencies have awarded 12 PPP contracts to the private partners, more than the combined six solicited projects awarded during the past three administrations. The government is currently tendering off 13 key infrastructure projects, which include five regional airports, a prison facility, a port modernization and water project, two information-technology projects and three rail projects. Some of these deals have been slipping, fighting an uphill battle with delays and the lack of time. “We’ve already learned from the previous crises,” Palacios said. “And without us mitigating this gap in infrastructure, we may be sliding closer to having a crisis.”