BusinessMirror December 10, 2015

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Thursday, December 10, 2015 Vol. 11 No. 63

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BBL hindering progress of other critical measures EAST ASIA LOSING WORK FORCE T TO AGING AT ALARMING PACE C

d3

he House of Representatives managed to muster a quorum on Wednesday—the first since June—allowing lawmakers to pass the proposed Salary Standardization Law (SSL) of 2015 and proceed with the interpellations on the controversial Bangsamoro basic law (BBL).

Wednesday’s session was attended by 176 solons, with 170 voting for the SSL’s passage, five opposing and one abstaining. Some 1.53 million state workers stand to benefit from the new law. It happened a day after President Aquino and Congress leaders appealed to law-

health&Fitness

tiger woods: ‘an onlooker’

sports

n

By Jovee Marie N. dela Cruz

a guide to the ‘star wars’ galaxy

life

A broader look at today’s business

High power rates just got higher this month

By Lenie Lectura

T C1

makers to attend sessions, with the hope of salvaging critical bills, including the BBL and the P3.002trillion 2016 national budget.

The session adjourned at about 8:15 p.m., with the ratification of the budget bill left untouched.

See “BBL,” A2

hina and other middle-income countries in East Asia are getting old before they are getting rich, requiring overhauls of health and pension systems, according to the World Bank. See “Aging,” A2

he high power rates perennially blamed for the country’s poor competitiveness ranking just got higher, after the P0.046-per-kilowatt-hour (kWh) increase in generation charge resulted in P0.55-per-kWh hike in electricity bill in December, the Manila Electric Co. (Meralco) said on Wednesday.

The P0.55-per-kWh hike for residential customers is equivalent to an increase of P11 for a typical household consuming 200 kWh.

The increase in overall rates was primarily due to higher genera-

PESO exchange rates n US 47.1670

tion charge, which stood at P4.130 per kWh, or P0.046 per kWh higher than last month’s rate.

Generation charge is the largest component of an electric bill.

Payment for the generation charge goes to the power suppliers.

Charges from the Wholesale Electricity Spot Market (WESM) went up by P0.535 per kWh. This was mainly due to the lower generation from hydro plants. There was also a higher extent of forced outages in November compared to October.

Plants under the power-supply agreements (PSAs) also registered See “Power,” A2

n japan 0.3836 n UK 70.8024 n HK 6.0856 n CHINA 7.3501 n singapore 33.4874 n australia 34.0556 n EU 51.3932 n SAUDI arabia 12.5806

Source: BSP (9 December 2015)

News

BusinessMirror

A2 Thursday, December 10, 2015

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Baladjay couple sentenced to 455 years’ imprisonment T

By VG Cabuag

he Regional Trial Court (RTC) in Makati City has found the Baladjay couple of the infamous Multitel pyramiding scam guilty and sentenced them to a total of 455 years’ imprisonment for selling unregistered securities to the public.

The Makati City RTC Branch 56 sentenced spouses Saturnino and Rosario Baladjay to seven years’ imprisonment for each of the 65 counts of violation of the Securities Regulation Code (SRC). They were also ordered to pay the complainants a total of P8 million.

BBL...

continued from A1

President Aquino did his part by signing the Tax Incentives Management and Transparency Act, a key measure that will put the country’s incentive-granting scheme in proper order, at least in the opinion of the bureaucrats, as businessmen aired concerns that this new law could cause them to lose fiscal perks they currently enjoy.

Fear of BBL

They were tried for violation of Section 8 of the SRC, which pertains to the selling of unregistered securities to the public. It is different from the string of other cases that the couple faces due to the scam, which reportedly victimized close to a million people, including several government officials. Authorities estimate that P100 billion was lost to the scam, one of the country’s largest, as its operations spanned decades.

The Baladjays are the owner of Multitel, short for Multinational Telecoms Investors Corp. Rosario Baladjay was branded as the Queen of Pyramiding when the scam broke out.

But the big stumbling block remains to be the BBL, as lawmakers are not attending the sessions to prevent the BBL from progressing, Party-­list Rep. Lito Atienza of Buhay said.

“There are many reasons— some are personal and some are official—but one of the major reasons we cannot expect majority of the members to participate is because they are hesitant to follow President Aquino’s admonition… to pass the original version of the BBL. The original version is already way, way behind us. The original measure is very different with the

current version,” Atienza said.

He said the leadership should call for a majority caucus to resolve the lack of quorum at the House, which threatens the passage of important bills.

“The leadership should take note why since June we couldn’t muster a quorum. They [the leadership] should clarify kung ano i-tatackle so we will be able to muster a quorum,” he said.

Also, Party-list Rep. Neri Colmenares of Bayan Muna admitted that many lawmakers are against the passage of the BBL.

“I think that the BBL is not the right solution to the ongoing problems in Mindanao, and many lawmakers are also against it. For Mindanao to gain genuine peace, the government should address the roots of the armed conflict, like landlessness, inequality and discrimination,” he said.

On Tuesday President Aquino appealed to lawmakers to attend sessions and pass the proposed BBL in

“The SEC [Securities and Exchange Commission] aims to push for greater financial transparency to not only protect Filipino investors but to increase overall investor confidence in the Philippines, as well,” SEC Chairman Teresita Herbosa said.

According to reports, the Baladjays started their lending operations during the late 1980s, when Rosario solicited what she called “voluntary investments” of between P2,000 and P10,000 with an interest payment of 1.08 percent.

She then re-lent that money to businessmen at a rate of 2.5 percent per month, or 30

a luncheon meeting in Malacañang before Congress goes on Christmas break on December 19.

Amid problems of absenteeism in the lower chamber, the House leadership has expressed confidence that the 2016 budget will be passed before the congressional break next week.

“This is a matter of timing; but definitely, we’re going to ratify it before our break [on December 19],” Majority Leader Neptali Gonzales II said in an interview.

Bicam report

Also on Wednesday, the congressional bicameral committee approved the bicameral report on the national budget, which reconciled the amendments of both chambers.

Rep. Isidro T. Ungab of Davao City said there were four substantial changes, restorations and augmentations in the General Appropriations Act that were reflected in the bicameral report, which was signed also on Wednesday, namely, an increase of P1.2 billion in the budget for indigent senior citizens; an increase in the budget of state

percent per year.

In 2000, after issuing several cease and desist orders, the SEC forced the couple to register their business with the agency, which they registered as Multitel International Holdings Inc. It was able to continue its operations through its conduit firms named Everflow and One Heart, which also attracted several “investors.”

Multitel further attracted investors as it offered a 4-percent guaranteed monthly interest for a minimum investment of P10,000, or double your money for investors who chose the 18-month lock-in scheme.

universities and colleges by P2.7 billion to cover their capital outlays; the veterans’ pension totaling P4.7 billion was sustained; and provision of P7 billion to fully fund the SSL of 2015 for its first tranche of implementation next year.

The changes to the budget bill also include the increase in the Department of Education (DepEd) budget. Per the bicameral report, the DepEd original budget of P411.482 billion was increased by P422.468 million, for a final budget of P411.905 billion.

For the Department of Energy (DOE), an amount was provided for personnel services for the Renewable Energy and Management Bureau, and the legal services and compliance service.

Per the bicameral report, the DOE’s original budget of P775.87 million was increased by P19.564 million, for a final budget of P795.440 million.

Meanwhile, the Department of Science and Technology’s (DOST) additional fund was provided for the construction or repair of various buildings of the Philippine Sci-

ence High School, and technical assistance to the Philippine Research Institute.

Per the bicameral report, the DOST budget of P17.94 billion was increased by P80 million, for a final budget of P18.029 billion.

Budgetary support to government corporations was adjusted by P9.8 billion, for a final budget of P103.453 billion from the original P113.351 billion.

The funds for the Department of Transportation and Communications (DOTC) were also adjusted to provide funds for the Quick Response Fund of the Department of National Defense.

The DOTC budget of P43.453 billion was adjusted by P773 million, for a final budget of P42.680 billion.

The social services sector continues to get the largest share of the budget, at 36.8 percent of the national budget, or P1.106 trillion.

The economic services will get the second-largest share of the budget with 27.6 percent, or P829.6 billion, while general public services will receive 17.3 percent, or P517.9 billion.

Aging...

continued from A1 East Asia is home to a third of people aged 65 and over, and is aging faster than any region in history, according to a report released on Wednesday. Developing countries from China to Indonesia to Vietnam that have neither the wealth of Japan nor the youth of the Philippines will have to increasingly rely on people working longer, the report finds.

“It will be possible to manage rapid aging in East Asia and Pacific while sustaining economic dynamism,” Axel van Trotsenburg, the bank’s vice president for the region, wrote in a foreword to the report. “This effort will require politically difficult policy choices, including dealing with associated fiscal risks.”

China by 2040 will have lost a net 90 million workers, according to the report. The country in October abandoned its one-child policy started in the late 1970s to find new motors of growth. But the change may have come too late and could be thwarted by the cost of raising children.

A lack of reforms to tackle aging in the region would come at a high cost, according to the bank.

Pension payments as a share of gross domestic product could be as much as 12 percentage points higher by 2070.

The report includes recommendations for different country groups in the region. The wealthiest, including South Korea and Singapore, need to battle the decline in their labor force by encouraging more women and immigrants to work. Countries with a larger proportion of young people, such as Cambodia, must find them jobs and build pension systems that can be sustainable when aging accelerates.

The bulk of middle-income economies “will need to sustain high productivity growth and undertake structural reforms of social security, health and long-term care, and labor market policies,” according to the report. Still, “there are reasons for cautious optimism, because more educated cohorts will be better prepared for the prospect of longer working lives than previous generations.” Bloomberg News

Power...

continued from A1 a slight increase of P0.009 per kWh, primarily due to lower dispatch of SEM Calaca and the increase in fuel cost of Ilijan driven by the weakening of the peso against the dollar.

The average rate of the plants under the independent power producers (IPPs), meanwhile, decreased

by P0.005 per kWh. This was driven by the higher dispatch of Santa Rita, after no outages were observed in November. It will be recalled that the plant’s Module 30 had a five-day scheduled outage, together with a less than one day forced outage of its Module 40, in October.

The share of PSAs, IPPs and WESM to Meralco’s total power requirements stood at 49.9 percent, 44.4 percent and 5.7 percent, respectively.

In addition to the generation charge, transmission charge registered an increase of P0.007 per kWh due to the higher ancillary service charges.

Payment for the transmission charge goes to the National Grid Corporation of the Philippines.

There was also a combined increase of P0.002 per kWh in taxes and other charges, such as system loss and subsidies, following the increases in the generation and transmission charges.

Meralco’s distribution, supply and metering charges remain unchanged after registering a reduction in July.

Meralco reiterated that it does not earn from the pass-through charges, such as the generation and transmission charges.

The Nation BusinessMirror

news@businessmirror.com.ph

Editor: Dionisio L. Pelayo • Thursday, December 10, 2015 A3

Ombudsman helpless vs absentee members–Belmonte

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By Butch Fernandez & Jovee Marie dela Cruz

PEAKER Feliciano Belmonte Jr. said on Wednesday that the Ombudsman could not impose punishment against lawmakers owing to absenteeism.

This, Malacañang kept distance from calls to sanction absentee congressmen, despite their disregard of President Aquino’s appeal for lawmakers to muster a quorum and pass pending administration bills before Congress goes on Christmas recess next weekend.

Belmonte, in an interview, said that the House of Representatives is an independent branch of government that has its own rules.

“On the filing of a case against us,

it has no leg to stand on, we are a different branch of government having our own rules here,” Belmonte said.

The leadership also admitted that it cannot force lawmakers to attend sessions because of their duties in their districts.

Hosting a working lunch-meeting with 150 congressmen at the Palace the other day, President Aquino pitched for the speedy approval of the P3-trillion 2016 budget and the Bangsamoro basic law (BBL),

Cops in Ampatuan Massacre penalized 6 years after carnage

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HE National Police Commission (Napolcom) has dismissed from the service 21 policemen, suspended 11, exonerated 21, and dismissed the complaint against nine others for lack of jurisdiction in the Ampatuan Massacre that claimed the lives of 57 victims on November 23, 2009, in sitio Malating, Barangay Salman, Ampatuan, Maguindanao.

The 23-page decision signed by the commission en banc chaired by Interior Secretary and Napolcom Chairman Mel Senen S. Sarmiento resolved the administrative case filed against the 62 police officers assigned at the various units of the Autonomous Region in Muslim Mindanao police command in connection with the carnage.

Napolcom Vice Chairman and Executive Officer Eduardo U. Escueta said the commission found substantial evidence that the killing of the 57 victims on November 23, 2009, were carried out by Datu Andal Ampatuan Jr. and the men acting under his interest and direction.

It was also established that the respondent police officers were culpable for being coconspirators with Andal Jr. and his men, either by their direct action or inaction.

Twenty-one respondents were meted out the penalty of dismissal from the service, 20 of whom were found guilty of grave misconduct and one guilty of serious neglect of duty and less grave neglect of duty.

Ordered dismissed from the service for grave misconduct are Supt.

Abusama Mundas Maguid, Chief Insp. Zukarno Adil Dicay, Insp. Rex Ariel Tabao Diongon, Insp. Michael Joy Ines Macaraeg, Senior Police Officer 2 Badawi Piang Bakal, SPO1 Eduardo Hermo Ong, Police Officer 3 Rasid Tolentino Anton, PO3 Felix Escala Enate Jr., PO3 Abibudin Sambuay Abdulgani, PO3 Hamad Michael Nana, PO2 Saudiar Ubo Ulah, PO2 Saudi Pompong Pasutan, PO1 Herich Manisi Amaba, PO1 Michael Juanitas Madsig, PO1 Abdullah Samma Baguadatu, PO1 Pia Sulay Kamidon, PO1 Esprilieto Giano Lejarso, PO1 Esmael Manuel Guialal, PO1 Narkou Duloan Mascud and PO1 Rainer Tan Ebus.

Insp. Saudi Matabalao Mokamad was dismissed from the service for serious neglect of duty and less grave neglect of duty.

“The 20 respondents were held liable for opting to become silent spectators to a crime unfolding before their very eyes. Their inaction manifests complicity and unity of action to those who committed the abduction, and later the murders, themselves. They conspired with Andal Ampatuan Jr. and his armed men in carrying out the massacre of the 57 victims,” the commission said in the decision.

Mokamad, on the other hand, was

found guilty for failing to take command in an emergency when he simply dismissed the gunshots he heard instead of investigating the matter, he being the highest ranking police officer in the area. He was also held liable for his failure to inform higher officers about the gunshots he heard.

The Napolcom found 11 respondents guilty of less grave neglect of duty and were ordered suspended for 59 days. They are SPO1 Ali Mluk Solano, PO2 Kendatu Salem Rakim, PO1 Benedick Tentiao Alfonso, PO1 Abdurahman Said Batarasa, PO1 Marjul Tarulan Julkadi, PO1 Datu Jerry Mluk Utto, PO1 Mohamad Karim Balading, PO1 Marsman Eging Nilong, PO1 Abdulmanan Lumbabao Saavedra, PO3 Felix Abado Daquilos and PO1 Jimmy Mlah Kadtong.

They were held liable for paying no attention and simply ignoring the gunshots they heard 30 minutes after the convoy of the Mangudadatus passed their checkpoint.

Twenty-one respondents were exonerated since the commission found no sufficient evidence to prove their culpability.

They are Supt. Bahnarin Unas Kamaong, Supt. Abdulwahid Unas Pedtucasan, Senior Insp. Abdulgapor Benasing Abad, SPO2 George Sermonia Labayan, SPO2 Samad Usman Maguindra, SPO1 Oscar Dariua Donato, SPO1 Elizer Sarad Rendaje, SPO1 Alimola Guianaton Langalen, PO3 Gibrael Rojas Alano, PO3 Ricky Duya Balanueco, PO2 Rexson Diocolano Guiama, PO1 Amir Maliwanang Solaiman, PO1 Badjun Ibad Panegas, PO1 Sandy Diloyodin Sabang, PO1 Johann Mansal Draper, PO1 Tamano Sahibal Hadi, PO1 Ebara Guiamalon Bebot, PO1 Pendatun Ambang Dima, PO1 Michael Macapeges Macorongon and PO1 Abdulbayan Usman Mundas.

PO2 Hernani Saulong Decipulo Jr. was exonerated by reason of his death.

The commission dismissed the complaint against the following nine respondents for lack of jurisdiction without prejudice to the revival of the case in the event that they will be restored to full duty status: PO2 Tanny Awal Dalgan, PO1 Ysmael Nalaunan Baraguir, PO1 Abbey Akmad Guiadem, PO1 Warden Kusain Legawan, PO1 Jonathan Solaiman Engid, PO1 Datunot Mangelen Kadir, PO1 Arnulfo Ayunan Soriano, PO1 Joharto Silongan Kamendan and PO1 Anwear Damaudtang Masukat.

“Although the Napolcom found sufficient evidence to establish the liability of some of the respondents, we were constrained to dismiss the case against them because they either had gone on absence without official leave or had been dropped from the rolls prior to the institution of the administrative complaint on March 10, 2010,” Escueta said. PNA

but only 130 of them showed up for Tuesday’s session prompting the House to adjourn for lack of quorum.

Malacañang however, is not inclined to join calls to sanction truant congressmen notwithstanding their apparent defiance of House rules, as well as the President’s wishes for lawmakers to finally approve pending administration bills before going on Christmas vacation.

“We do not interfere in such matters that are purely internal to them,” a ranking Palace official who requested anonimity told the BusinessMirror.

Earlier, Communications Secretary Herminio B. Coloma Jr., in a text message to the Palace media corps, reported that “after lunch, Belmonte gave brief welcome remarks, then introduced the President. Following the President’s message, [Liberal Party] Rep. [Neptali] Gonzales Jr. [of Mandaluyong] gave the closing remarks.”

“The President then took leave, while Speaker Belmonte and the members of the House remained for an informal huddle,” he added, noting that the Palace lunch with the congressmen at Heroes Hall began at around 12:15 p.m. and ended at 2:30 p.m.

From there, of the 150 congressmen who had lunch with the President, only 34 showed up at the plenary session at the House of Representatives a few hours later, scuttling Tuesday’s session, and putting to naught the President’s effort.

Last week the Civil Society Organization of Mindanao filed a complaint before the Ombudsman against absentee members of the chamber.

Lawyer Mary Ann Arnado, convenor of the Bangsamoro Para sa Bayan said that the complaint will force lawmakers to attend sessions and pass important bills,

including the proposed BBL. Arnado said that the problem on absenteeism in the House of Representatives paralyzes the legislative branch of the government, saying since July several sessions in the lower chamber get adjourn because of the lack of quorum.

The BBL is currently under the period of interpellations in the House of Representatives. There are at least 21 lawmakers who want to interpellate the sponsors of the measure.

Meanwhile, Belmonte said that he is still appealing to lawmakers to attend the remaining session before the holiday break on December 19 to ensure the passage of the vital Salary Standardization Law of 2015, the BBL and the ratification of the General Appropriations Bill of 2016.

“I appeal to our colleagues to heed the urgency of acting on these important measures. Without their collective support and cooperation,

these vital measures will not become laws,” the Speaker said.

Belmonte said he remains optimistic that despite the quorum issue, House members will heed the call of duty for the passage of these priority measures and other pending bills in Congress.

As the 2016 elections draw near, the Speaker said lawmakers inevitably and understandably have become busier with more political activities in their respective districts.

But, he said, House members are also aware of their legislative duties in Congress.

“Hence, I urge our colleagues to once again show our unity and cooperation by completing our remaining tasks before the start of the holiday break. Let us do our best to finish what we have started.

Our paramount concern is to pass the remaining vital bills that will benefit the Filipino people,” the Speaker said.

US nuclear submarine docks in Subic CA junks Payatas residents plea for writ of kalikasan vs QC govt

By Rene Acosta

O

NE of the stealthiest and most advanced attack submarines of the US docked over the weekend at Subic Bay as Washington further strengthens its presence in Southeast Asia, amid China’s latest pronouncement that it would construct additional airfields in the territory on the West Philippines Sea that is being claimed by the Philippines.

The USS Tucson, a Los Angeles- USS Tucson class fast-attack submarine, docked at the former US naval base in Zambales, in what the US Embassy said was a part of its deployment in the Indo-Asia-Pacific region.

The deployment of the submarine with a crew of 150 for a “multitude of missions and showcase the latest capabilities of the submarine fleet” came almost simultaneously with the deployment for the first time in Singapore of the US P-8 Poseidon antisubmarine aircraft.

It also came in the aftermath of China’s statement that it will build a fourth airfield in the South China Sea, adding up to the three facilities that it has already constructed on the artificial islands that it has built on the Philippine claimed islets on the West Philippines Sea. The US said the presence of the Poseidon, an advanced intelligence plane, in Singapore was forced by the ongoing security developments in the South China Sea, which it wanted to remain open for navigation by all ships.

By Joel R. San Juan

T

The US Embassy did not say anything about the presence of Tucson, other than it was part of its regional deployment.

Lt. Junior Grade Jimmy Dinh, public affairs officer of the USS Tucson, said some of the submarine’s crewmen are Filipino-Americans.

Dinh said the submarine which is 360 feet long is capable of supporting a wide array of missions, including antisubmarine warfare, anti-surface ship warfare, strike, intelligence, surveillance and reconnaissance.

The Tucson is the 59th Los Angeles-class fastattack submarine and the 20th of the improved Los Angeles attack submarines that was built.

Dinh said 12 vertical launch tubes for Tomahawk cruise missiles and four torpedo tubes provide USS Tucson with great offensive capabilities and strategic value.

“The submarine’s stealth, endurance, mobility and responsiveness make it a formidable force in multiple mission roles,” he said.

Former envoy to Washington Willy Gaa, 69

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ETERAN diplomat Willy C. Gaa, who served as Philippine ambassador to the US from 2006 to 2010, passed away on Wednesday after a prolonged bout with lung cancer. He was 69.

Gaa’s career as a diplomat started when he was appointed as foreign service officer (FSO) in December 1974 after he passed the FSO examination and took his oath of office.

Gaa served in the Department of Foreign Affairs in Manila as principal assistant for the Office of Administration (1975); vice consul and then consul in San Francisco (1975-1980); consul in New York (1981-1985); secretary, Board of Foreign Service Administration and Board of Foreign Service Examiners (July-August 1985); acting chief coordinator, Office of the Acting Minister of Foreign Affairs (September 1985-February 1986); director, Office of Middle East and African Affairs (JulyAugust 1986); and executive director, Office of Consular Services (August 1986-February 1987).

Gaa was then designated as deputy consul general in Los Angeles (1987-1990); ambassador to Libya and non-resident ambassador to Tunisia, Malta and Niger (1992-1997); consul general in New York (1997-1999); assistant secretary, Office of Asian and Pacific Affairs (May 1999 - January 11, 2002); and ambassador to Australia and nonresident ambassador to Nauru, Tuvalu and Vanuatu (2002-2003).

Gaa also represented the Philippines in various United Nations (UN) conferences, as well as multilateral and regional meetings, seminars and training. He served as Adviser of the Philippine Delegation to the 36th and 53rd UN General Assemblies (1981 and 1998, respectively). He attended several Asean Senior Officials’ meetings and various bilateral dialogue meetings as member of the Philippine Delegation.

He diplomat was head of the Philippine Dele-

gation Senior Officials’s Working Group on the Regional Code of Conduct on the South China Sea in Singapore, Bangkok, Thailand, China, Vietnam and Brunei Darussalam (1999-2000); the Intersessional Group Meetings on Confidence Building Measures of the Asean Regional Forum (ARF) in Tokyo, Kuala Lumpur, New Delhi and Singapore (1999-2001); and the Philippine Working Group Meetings on Confidence Building Measures Between China and the Philippines in Beijing (1999) and Manila (2001).

Gaa served as ambassador to the People’s Republic of China (2003-2006), followed by his post as consul general in Los Angeles. He was initially assigned to the Philippine Embassy in Washington, D.C., as charge d’affaires on July 25, 2006, before becoming ambassador.

In his last year in Washington, Gaa played a major role in the convincing the US Millennium Challenge Corp. to give the Philippines a $434-million development grant. He also arranged a oneon-one meeting in New York between Presidents Aquino and Barack Obama and facilitated the transfer of the consular section from the embassy to a bigger office in the old chancery to better serve the public. Gaa obtained his Bachelor of Arts (AB Political Science) degree from Manuel L. Quezon University in 1966. He graduated from the University of the Philippines in 1970 with a Bachelor of Laws degree and from New York University in 1985 with a degree in Master of Laws (International Legal Studies).

The late diplomat is survived by his wife, Erlinda Concepcion, with whom he has two sons, Wendell and Warren.

Wake starts on Thursday, December 10 at 2 p.m. Interment will be on December 15 at 2 p.m. after a memorial service at Funeraria Paz, Manila Memorial Park, Sucat, Parañaque.

HE Court of Appeals (CA) has junked the petition filed by residents of Payatas in Quezon City for the issuance of a writ of kalikasan against the expansion of the sanitary landfill in the area.

In a 10-page resolution written by Associate Justice Mariflor Punzalan Castillo, the CA’s Tenth Division held that the petitioners led by resident Leonita Panoy and several homeowners associations failed to comply with the requirements of Republic Act (RA) 9003, or the Philippine Ecological Solid Waste Management Act of 2000.

The law provides that “no suit can be filed until a notice has been given to the public officer and the alleged violator concerned 30 days prior to the filing of the case.”

The CA noted that the petitioners’ statement in their letter dated July 14, 2014, to respondent Quezon City Mayor Herbert Bautista that they will “be forced to pursue other remedies to address the imminent threat to the lives of our clients and the rest of the Payatas community” cannot be considered as a notice to sue.

“Petitioners simply conveyed that they would pursue other remedies if respondents failed to take action within five working days from receipt of the letter. We find no express intention that they will actually file a suit or action in court if respondents fail to act,” the CA noted.

It explained that to “pursue other remedies” is too broad that it may be interpreted as an administrative remedy, arbitration or mediation, or any other means to address a violation of right.

“The notice or letter should specifically state that the complainant intends to file a suit if no action is taken by the public officer concerned within 30 days. Such intention or statement was not categorically expressed in petitioners’ letter dated July 14, 2014,” the CA ruled.

“Thus, for failure to comply with this mandatory requirement of the law, we are constrained to dismiss the instant petition without prejudice to the refiling of the action before the proper court,” it added.

It can be recalled that in September, the Supreme Court (SC) abandoned its earlier decision denying the petition for being incomplete in form and insufficient in substance.

The Court also ruled that the magnitude of environmental damage required by the rules on the writ of kalikasan (must affect the life, health or property of residents of two or more cities or provinces) has not been met as no evidence has been shown prima facie to support any such claim of damage.

The Court also noted the lack of affidavits, scientific studies or documentary evidence to support the claimed environmental damage, as required by the rules on the writ of kalikasan.

But, in reversing itself, the Court ordered Bautista and the Department of Environment and Natural Resources-Environmental Management Bureau to answer the petition.

The Court also referred the case to the CA for hearing and resolution.

The SC issued the new order after granting the motion for reconsideration filed by petitioners on July 10.

The petitioners sought the issuance of a writ of kalikasan against the Quezon City government’s expansion of its sanitary landfill which petitioners claim will encroach upon the area where their houses are built.

The petitioners argued that the sanitary landfill endangers the health of the people living around the facility.

The petitioners, mostly residents living near the landfill, also sought the closure of the facilty for violating the provisions of RA 9003, or the Ecological Solid Waste Management Act and other environmentl laws such as the Clean Air Act, Clean Water Act, Toxic Substances and Hazardous and Nuclear Wastes Control Act.

TheBroa

Business

A4 Thursday, December 10, 2015

Prelude to Telstra’s entrY

700-MHz band emerges as telcos’ first battleground Science Matters

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By Lorenz S. Marasigan

he battle came in early for Telstra Corp.

Ltd., which bids to offer mobile-data services in the Philippines, as incumbent telecommunications providers in Manila seek to take hold of a precious asset that the Australian regional giant’s prospective partner currently owns.

The two lords of the telecommunications sector in the Philippines, industry observers said, are teaming up to thwart the potential foray of Telstra through a wireless joint venture with San Miguel Corp. (SMC).

To do this effectively, Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. are seeking the reallocation of the 700-megahertz (MHz) frequency band, an asset considered by the global telco industry as a “digital dividend” brought about by the shift of television technology from analog.

The war for the asset, according to International Data Corp.

Asia-Pacific Telecommunications Group Senior Research Manager Alfie Amir, is nearing its boiling point, as such a frequency band has the potential to solve the Internet woes of the Philippines.

Precious band

“The 700 MHz is a precious band, not only in the Philippines, but also worldwide. There are two key advantages of the 700-MHz band. First, it is a lower band compared to the other current LTE [Long-Term Evolution] bands in the Philippines. Physically, lowerfrequency bands have higher penetration range,” he said.

In other words, each cell tower using 700 MHz has wider coverage and can penetrate into buildings better than using higher-frequency bands. Hence, having LTE at 700MHz band allows telcos to provide better coverage with little investment in infrastructure.

“Second is that having more frequency bands means a telco’s network is able to provide higher capacity or bandwidth. Imagine, like a road, the more lanes you have, the more cars can go through at the same time. The same concept applies for wireless technology: the more frequency bands, the more bandwidth they can transmit or receive,” Amir added.

Currently, SMC holds the right to operate the whole band: with Liberty Telecoms Holdings keeping 80 MHz; High Frequency Telecommunications with 10 MHz; and New Century Telecommunications 10 MHz.

The San Miguel Group also operates spectrums under the 800-MHz, 900-MHz and 1,800-MHz bands.

Slow Internet

This portfolio may be enough to provide better Internet services

in the country.

Customers complain of slow Internet speeds in the Philippines. An Ookla study showed that the country has the secondslowest average download speed among 22 countries in Asia.

As of May, the country’s average download speed reached 3.64 Mbps, ranking 176th out of 202 nations around the world. It is eight times slower than the global average broadband download speed of 23.3 Mbps.

Cloud services provider Akamai Technologies also reported that, while the Philippines might have improved its connection by a percentage point, its overall ranking in Asia still remains at No. 13 out of 15, or the third-worst connection in the region.

According to the first-quarter report of Akamai, Filipinos enjoyed an average download speed of 2.8 Mbps during the period under review. Trailing behind are India and Indonesia, with 2.3-Mpbs and 2.2-Mbps average speed, respectively. Hence, the clamor for a new player that will break the duopoly that lords over the market with over 100 million subscribers.

Citing the potential improvement of their services, the two incumbent telcos recently sought the National Telecommunications Commission’s (NTC) power to reallocate the 700-MHz frequency band.

Ray C. Espinosa, who heads PLDT’s regulatory affairs and policies office, claimed that a reclamation of the frequency is necessary, as such an asset is currently being underutilized by its owner.

A public auction, he said, should follow—such is the option for the government to take if it wants to further develop the digital economy in the country.

“We should have access to that very scarce resources to further improve our services. This spectrum should be made available to both incumbent and new entrants in the industry,” he said.

“We can serve our customers better if we were given access to the 700-MHz frequency band.”

Globe General Counsel Froilan M. Castelo, meanwhile, said such a reallocation would also mean economic dividends to the country. He cited the recent forecast made by Groupe Speciale Mobile (GSMA) on the harmonization of the 700-MHz and 800-MHz bands that highlighted

the possible spike in local output in the region if only the governments and their respective private sectors develop key policies in the utilization of assets.

“Estimates on the impact on the GDP across Asia Pacific of the 700-MHz band alone, as allocated to mobile, is a tenfold increase to $1 trillion by 2020,” he said.

Currently, the PLDT Group has the right to operate the 800-MHz, 900-MHz, 1800-MHz and 2,100MHz bands. Globe, on the other hand, has rights to the 900-MHz, 1,800-MHz and 2,100-MHz bands.

Taking a hold of a portion of the bands would further improve the portfolio of the two companies.

Not asking for all, but for some

The two telcos are not asking the telco regulator to recall all of the 100 MHz of spectrum under the 700-MHz band. What the incumbents are asking is for the government to give them “a fair share” of the asset.

Likewise, there is no collusion between the current telco providers to thwart the entry of a third player, seen to be launched through Bell Telecommunications Philippines Corp.

“The fact of the matter, at least on the information available to us, is that the industry’s perception is that San Miguel only has the 700 MHz as the bandwidth for mobile business. They also have the 900 MHz, 1,800 MHz, 2,300 MHz and 2,600 MHz. In totality, including the 90 MHz on 700 MHz, they have 310 MHz. Smart has 290 MHz, Globe is much lower than us,” PLDT Chairman Manuel V. Pangilinan said. “They have a good spread of spectrum already.”

For her part, Globe Spokesman Yolanda C. Crisanto said her company will continue to urge the government for the reallocation of the spectrums, as this would help her company provide better Internet services to its subscribers.

“Our position is clear: We will continue to pursue the 700-MHz band, and we will continue to urge the government to harmonize the frequency,” she said.

Amir backed the two incumbents up, saying that reallocating the band will help improve the customer experience of all three companies.

“The government should only consider reassigning 700 MHz to Globe or PLDT if the ex-

World’s data hunger grows Recent years brought a new generation of portable computers, and they use up vast amounts of high-speed “broadband” communication.

How much broadband you use

One laptop with a mobile broadband card ...

... uses as much data as 15 smart phones (iPhone, BlackBerry, etc.) ...

How much we all use

... or 450 standard cell phones making calls or sending text

isting LTE network is fully utiband—specifically 694 MHz to lized, which will impact users’ 790 MHz—to the global mobile experience, andtraffic, the 700North MHzAmerica is industry.

Mobile data World mobile traffic not fully utilized by San Miguel.

ITU specifically Thousands of TB* per month By use,officials in 2013 (estimate) By providing Globe or PLDT adstated that this move was taken 400 ditional frequency band at 700 to help bridge the digital divide, 64% Video, 19% Audio, MHz from San Miguel, PLDT and pointing out that the long range TV, movies music Globe of radio over the 700-MHz band 300 will have higher bandwidth 2010-2013 and, hence, improve overall users’ will be especially beneficial for are estimates experience,” he said. underserved, rural areas.

200

However, bidding out the

“It goes a long way in en700 MHz to the public would be a abling bridging of the digital di100 process. lengthy vide, while fully protecting the

NTC Deputy Commissioner other services currently operated Edgardo V. Cabarios explained in the band,” ITU Secretary-Gen0 that before the regulator Houlin was Phone quoted as 7% Data, Zhao10% 2008 ’09 ’10 ’11 can ’12re-’13 eral Internet use calls, messages assign or recall a frequency, a case saying. *1 terabyte = 1 billion words or 1,000 gigabytes must first be filed before the com For his part, ITU RadiocomSource: Cisco Systems, The Wireless Association (CTIA), Chicago Tribune mission.

Bureau © 2009 Director Graphic: Chicago Tribune, Helen Lee McComas munication MCT

“They should cite either nonFrançois Rancy said: “The global use or nonpayment of spectrum harmonization of the 694-MHz fees. Then, of course, the case will to 790-MHz frequency band that go through the Court of Appeals, has been decided by World Radioif a party wants to contest the decommunication Conference paves cision of the regulator. It’s a long the way for manufacturers and process,” he said. mobile operators to offer mobile

SMC is expected to sign a deal broadband at an affordable price with Telstra soon, as it debuts in in currently underserved areas.”

Manila in 2016. It plans to invest

GSMA Chief Regulatory Ofroughly $1 billion in a wireless ficer John Giusti said his group joint venture with the diversified commends the vision shown by conglomerate. many countries seeking the flex The Filipino diversified conibility to use the sub-700-MHz glomerate is expected to hold 60 band for mobile broadband. percent of the said company—

“Not only can legacy televirequiring it to invest as much as sion services in the band be deliv$1.5 billion—while the remainered far more efficiently using less der will be held by the Australian spectrum, but the reality is that telecommunications giant. consumer habits are evolving as

Telstra is known to be one of video content is increasingly acthe first few telcos in the world to cessed via mobile devices. Allowhave successfully capitalized on ing both mobile and broadcasting the 700-MHz band. in the band gives these govern The Asia Pacific Telecommuments the ability to respond to nity and the International Telethe changing needs of their citicommunication Union (ITU) have zens,” he said. recently launched harmonization

Studies showed that econominitiatives for the repurposing ic benefits from using the 700of the 700-MHz radio frequency MHz band for mobile broadband band from broadcast use to interfar exceed those from broadcastnational mobile telecommunicaing. In a 2012 report, the Boston tion use.

Consulting Group and the GSMA

In the World Radiocommusaid that by 2020, the digital divinication Conference held in Gedend for the Asia-Pacific region neva last month, the ITU formally could be worth almost $1 trillion moved to allocate the 700-MHz in additional GDP.

A5

www.businessmirror.com.ph | Thursday, December 10, 2015

Mobile messaging and social media Pinterest and Instagram usage doubled since 2012. Growth on other platforms is slower.

% of adults who say they use the following social media platforms Facebook 67

Pinterest

Instagram

31

26 28

Linkedin

Twitter

71 71 72

15 ’12

’15

21

28

13 17

’12

’15

’12

’15

20 22

28 25

’12

16 18

’15 ’12

23 23

’15

Source: Pew Research Center Graphic: Staff, Tribune News Service

Internet use by age Young adults are most likely to use the internet, but seniors show faster adoption rates 18-29

30-49

50-64

65 or older

100% 80 60 40 20 0

96%

93% 81%

70% 61%

58%

46% 14% ’00

’05

’10

Source: Pew Research Center

Smartphone users are as diverse as their devices U.S. smartphone market share by race, operating system and gender

77.8%

2.8%

1.2%

0.9%

43.4% 51.7%

76.3%

Android OS Apple iOS Windows Blackberry Other

W hi te

O N th or at er Al ive as A ka me n ri na ca tiv n e

Smartphone ownership 86.6% 83% 82.4% 78.5% 75.7% 74.2%

Source: Nielsen Graphic: Staff, Tribune News Service

Smartphone-dependent The percent of U.S. adults who have a smartphone, but lack other broadband Internet service at home, and/or have limited options for going online other than their cellphone All adults

10% have no broadband service at home other than smartphone data plan Source: PEW Graphic: Greg Good, TNS

’15

Graphic: Staff, Tribune News Service

an / Is Pac la if nd ic er Bl ac k/ Am Afr er ica ic nan H is pa ni c

sMirror

As i

aderLook

64% own a smartphone 15% have limited options for online access other than cellphone 7% overlap have limited options for online access and no broadband service at home

A6 Thursday, December 10, 2015 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Finger-pointing will not solve the MRT problem

T

HE Metro Rail Transit (MRT) Line 3 has become not just a controversial project but a symbol of government incompetence. Once hailed as a heaven-sent solution to Metro Manila’s traffic gridlock, it has become a living hell for millions of Metro commuters who have to suffer the consequence of leadership failure every day.

After more than 16 years in operation, the MRT today is not even close to what it was once touted to be—a modern, fast, efficient and convenient transport system. Thanks to the greed of the powers that be, it has evolved into an accident-prone, uncomfortable yet inevitable mode of public transport.

The deterioration of MRT coaches and the disappearance of quality service created a new activity among people in the government: finger-pointing.

Liberal Party presidential candidate and former Transportation Secretary Manuel A. Roxas II recently pointed to the MRT contract as an endeavor tainted with “original sin.” This happened during a “Meet Your Candidates” forum organized by the alumni of American business schools such as Harvard, Wharton and Kellog. When Roxas was asked if he thought he did enough during his stint as secretary of the Department of Transportation and Communications (DOTC), he responded by saying that there was original sin in the MRT contract.

“This is a contract that started out in original sin. The contract itself was anomalous and it binds the government to continue this program,” Roxas declared, adding that the MRT pact only allows the operator to buy new trains and assures the firm of 15-percent return. “You tell me whether that’s anomalous or not,” he quipped.

We all know that Adam and Eve committed the original sin. We wonder, though, if Roxas is aware that the “Adam and Eve” of the MRT 3 mess, following his original sin logic, include the mother of his boss. The contract he referred to was drafted by the administration of the late President Corazon Aquino and awarded during the time of former President Fidel V. Ramos.

Apparently, Roxas was unaware of the facts. The MRT contract originally guaranteed 21-percent return for investors when President Cory offered it out in 1991 to entice investors to build the first MRT in the country at a time when government finances were in dire straits. It was labeled a priority project of the Cory administration. To his credit, however, Ramos was able to bring this rate down to 15 percent, which was not anomalous but advantageous to the government because the Philippines was paying 25-year bonds during that time at 18 percent. Businesspeople agree that the investors were actually getting less than what the Philippines was already paying then, given that the MRT 3 project also has a 25-year term.

We know that the problems with the MRT 3 only started after the DOTC took over maintenance of the train system from a reputable company contracted by the private owners. In 2012 PH Trams, a two-month-old company with meager P625,000 capital, bagged the P517.5-million contract to service the MRT 3 trains and tracks. From then on train service got worse and worse and worse.

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The Jackal of Wall Street John Mangun

OUTSIDE THE BOX

I

t is the Christmas season and it is certainly proper to take the time to think of, and be thankful for, the good things in spite any disappointments we may have experienced.

Nonetheless, it is also the end of a year and a time for reflection and, perhaps, a reality check.

The Philippine stock market has had a marvelous seven-year upside run. But as we end 2015 it is likely— with about 12 trading days left—we may end in the red. Obviously, unless a stock-trading miracle occurs, we will not end at the 8,000 level.

There are harsh realities that need to be confronted. While not directly applicable to the Philippines, never in the history of the world has there been as large a wealth transfer from the middle-income class to the wealthy class as in the last years.

This is the result of the global “zero-interest rate” policies that have favored the debtor at the expense of the saver. Borrowing money to invest in the stock market helped create nearly 500,000 new millionaires in the US in 2014 alone.

Since the millionaire population plunged in 2008, the US has gained or added back more than 3.5 million

millionaires. The people who save their excess income—the normal middle class—are poorer today than before, and that trend is accelerating.

The median wealth of a US household, in inflation-adjusted dollars, dropped 36 percent from 2003 to 2013. In that same period, the richest 5 percent of households saw their median net worth increase by 12 percent.

“The United States government, during the past few years, at the behest of the big fellows who seek a monopoly of the game, has been raiding the little fellow.”

I put that last sentence in quotes because it is not mine. That was written by a man who went by the name of “George Graham Rice,” although his birth name was Jacob Herzig. He was more familiarly called “The Jackal of Wall Street.”

Herzig or Rice, wrote those words in his memoir, a book called My Adventures with Your Money in 1913, 100 years ago. Rice is the man that all stock-market manipulators—even

in the Philippines—strive to be like.

Rice wrote: “You are member of a race of gamblers. The instinct to speculate dominates you. You feel that you simply must take a chance.

You play the stock game. In the stock game the cards [quotations or market fluctuations] are shuffled and then stacked behind your back after the dealer [the manipulator] knows on what side you have placed your bet and you haven’t got a chance.

When you and your brother gamblers are long of stocks, the market is manipulated down and when you are short or out of the market, prices are manipulated up.”

Fortunately, the local stock market has not been used by the “big fellow with the help of the government” to create a massive wealth transfer.

However, we have seen many issues that have traded according the “Jackal’s” system. For example, one was unknown in March 2014 and traded at P1. By February 2015, the price was P3. Had you bought at the beginning and held until now, you would still be down 25 percent.

The formula is even included in My Adventures. “The more dangerous of the malefactors are the men in high places who take a good property [or company], overcapitalize it, appraise its value at many times what it is worth, use artful publicity and market methods to beguile the thinking public into believing the stock is worth more and foist it on investors at a figure that robs them of great

sums of money.”

If that method of manipulation sounds familiar, then you can consider yourself a veteran of local stock-market trading. The core of the manipulation problem is always, and is still, an investor’s trust and at the same time lack of effort to avoid being “manipulated.”

“The information that is permitted to reach you as market probabilities through the financial columns of the daily newspapers is, as a rule, poisoned at its fountain. Few financial writers dare to tell the whole truth.

Most of them are, indeed, subsidized to suppress the truth and to accelerate public opinion in the channels that mean money in the pockets of the securities sellers.”

Finally, Rice advises, “What is the lesson of my experience? This is it: Don’t speculate in Wall Street.

You haven’t got a chance. The cards are stacked by the ‘ big fellows’ and you can only win when they allow you to.”

But this is 2015 and the human race—or at least you—should be wiser and more knowledgeable. Do your own homework and figure out every hot tip is just another way to steal your money.

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.

The presidency and authenticity: The limits Ariel Nepomuceno

DECISION TIME

W

ith the ever-growing challenges confronting this country and in anticipation of next year’s election, Filipinos are now talking, debating, analyzing and, sometimes, fighting about who should be our next president. From corporate board rooms, coffee shops, bars and even the commonplace tambayan by the sari-sari store, more and more banter on the fate of the presidency is now occurring. Still four months to go but democracy in action is at its finest right here and right now.

Adding color to this episode is the decision of Davao City Mayor Rodrigo Duterte to run for president. His passionate persona, no qualms language, non-apologetic use of cuss words and livid attack on some sections of government, the church, national institutions and some personalities generated mixed reactions of outright excitement and support, shock and awe, and for some, utter disappointment. But one extremely positive effect of his joining the presidential fray is the polemics of how far can a leader display his authenticity and get accepted by the electorate through the ballot.

Traits of our top leader While competence and capability are both given for the highest position in the land, authenticity in the leadership space is characterized by one who is true to himself. A person who openly accepts his weaknesses, oddities and strengths and does not hesitate to show these attributes to the people he governs or leads. His private and public spheres are one and the same and they do not consider the outward display of their emotions and feelings as a frailty.

In addition, authentic leaders do not feign ethical limitations. The acid test

is to look at the consistency between a leader’s personal value systems and the actions that he takes. Open, self aware, resilient and ethical leaders are better motivators and are good at inspiring people to achieve goals in a purposive and effective manner.

Our current choices Much has been said about Secretary Manuel A. Roxas’s elite beginnings and topnotch background; Sen. Grace Poe’s being a foundling and how her love for family made her decide to stay for a while in the US, and Vice President Jejomar C. Binay’s meteoric rise from a poor, outcast farm boy in Batangas to a hometown hero in Makati. Each of these presidential aspirants have their respective family or personal histories, layers of nuances in their private and professional lives and whether they are conscious of the vulnerabilities resulting therefrom and are doing something about it is another issue altogether.

These candidates have tried and are still trying to etch in every voter’s mind who they really are, and what they are made of. It is really up to us to evaluate the honesty in the way they project their qualities in the outside world and how these qualities can serve as drivers to deliver the promises that they offered us once they get elected.

Real measurement

Thus, authenticity or even honesty are not measured by the way a leader can freely or continuously speak out his mind in the most articulate or frank manner without batting an eyelash or without fear of consequences. Nor is it measured by candidates going on a self-deprecation drive where those courting our votes deliberately belittle themselves, use their impoverished past or personal family misfortune or political persecution as a leverage to create a public image that would appear to be sincere and true. We must be conscious about candidates who would exploit the desperation of some sectors by justifying violence, strong arm tactics or promoting a moral take on things that should be a purely personal decision and not one which should be regarded as a sign of bravery or a cute source of entertainment for a country that is still beset with a multitude of problems.

Novelty, popularity, sympathy, idolatry or plain hero-worship become dangerous when they are wrongly used in the enterprise of choosing our leaders.

The Office of the President is what we make it. Let us not miss that chance.

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

Opinion BusinessMirror

opinion@businessmirror.com.ph

Transfer pricing: One of PHL top priority programs in 2015 Atty. Filamer D. Miguel

Tax law for business

H

as there been any development in the field of transfer pricing in the Philippines? As this Year of the Sheep is about to end, let’s take a moment to revisit relevant issuances relative to this subject matter.

As may be recalled, it was only on January 3, 2013, when the muchawaited consolidated transfer-pricing rules and regulations in the Philippines was issued by the Department of Finance as embodied in Revenue Regulations 2-2013. Said RR prescribed the guidelines in determining the appropriate revenues and taxable income of the parties in controlled transactions, which is largely based on the Organization of Economic Cooperation and Development transferpricing guidelines.

Thereafter, sometime in 2014, the Bureau of Internal Revenue (BIR) drafted another revenue regulation prescribing the guidelines and procedures in administering the Advance Pricing Agreement (APA) program.

As early as October 2014, several roundtable discussions on the draft RR on APA were conducted with the participation of invited panelists from both the private and public sector. As of date, however, the Philippine tax bureau has not finalized the RR on APA. Like any other year, the government’s explicit direction, with respect to its main areas of concern, is specifically laid down. In particular, on January 13 of this year, Revenue Memorandum Circular (RMC) 3-2015 was promulgated by the BIR. Said RMC enumerated the 27 priority programs/ projects of the Philippine government for the calendar year 2015 that are intended to help the bureau in attaining its revenue target.

Pursuant to this latest RMC, the BIR’s collection target for calendar year 2015 is 25.4 percent higher than the P1.34 trillion collected last year.

Albeit, the bureau’s collection last year was also short of the 2014 goal of P1.46 trillion.

In order to manage the bureau’s drive for unrealistic higher revenue collection, included in the 2015 top priority programs is a special focus on transfer pricing. The transferpricing program seeks to complement the transfer-pricing guidelines of the BIR through RR 2-2013.

Further, the proposed transferpricing program will include the commercial database subscription for transfer-pricing studies and the crafting/finalization of related issuances on transfer pricing, which are as follows: n RR on APA; n Revenue Memorandum Order (RMO) on transfer-pricing documentations; and n RMO on transfer-pricing risk assessment.

With the issuance of RMC 3-2015, all bureau offices are, thus, enjoined to align their activities, projects and other undertakings with the enumerated priority programs to sustain the positive trend of improved collection

efficiency that has been observed over the past three years.

It must be noted that the bureau’s Large Taxpayers Service (LT Audit Division), in coordination with legal group (International Tax Affairs Division), shall be the lead offices assigned to handle the transfer-pricing program. With the guidelines clearly set

by RMC 3-2015, let’s evaluate how the Tax Bureau’s collection effort turned out this year. Was it able to achieve its overall revenue target?

It must be noted that on August 17, the BIR issued RMO 17-2015, which revised the targets for the months of August and September. The programmed collection for August was cut to P131.7 billion, from P160.7 billion previously.

The goal for September, meanwhile, was raised to P149.2 billion, from the original P120.2 billion. Nevertheless, the full-year collection target was kept at P1.67 trillion.

As disclosed, based on the data released by the Department of Finance, by the end of August the BIR collected a total of P962.6 billion. This is up by 8 percent from P890.7 billion in the first eight months of last year.

Notwithstanding this remarkable performance, available statistics would reveal that the BIR still missed the adjusted end-August goal of almost P1.1 trillion.

How about the tax bureau’s target for next year? The incumbent commissioner announced that the tax take had been programmed by the Cabinet-level interagency Development Budget Coordination Committee to jump by 21 percent to P2.03 trillion, the first time collections could breach the P2-trillion mark. With these interesting developments, it is quite apparent that the tax bureau has the proclivity to explore more areas which are tagged as potential source of tax collections, in line with the BIR’s ambitious revenue-collection agenda. It would seem that the transfer-pricing program has been explicitly targeted as a promising revenue-generating activity. As such, concerned taxpayers with related party transactions must be mindful of their transfer-pricing compliance.

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

The article is for general information only and is not intended, nor should be construed as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at filamer.miguel@bdblaw.com.ph or call 403-2001 local 360.

Joy in the Lord’s presence Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

G

od in the midst of His people is the fountain of salvation giving joy and confidence to Zion (Isaiah 12:2-3, 4, 5-6). In His presence, all can share in the joy and peace by standing honestly and humbly before God who brings salvation (Luke 3:10-18).

Cry out with joy Isaiah’s hymn of thanksgiving serves very well to express the joy and confidence the season of Advent imparts to us. The “Holy One of Israel,” the totally different and holy Lord, is among His own people. The people themselves have become set apart and consecrated to Him. Thanksgiving and exultation characterize them. Knowing that God is their source of salvation, not just a mere human being, gives them confidence and makes them unafraid. With God as their savior, source of their courage and strength, as in the past, so now and in times to come, they cannot but cry out with joy. The assurance is: “With joy you will draw water at the fountain of salvation.” The water that gives life is constantly available to them as from a well, manifesting God’s merciful and saving power.

And the people become the Lord’s witness before the world. As they give thanks to Him and acclaim His name, they make known to the nations

A

that reflects Republicans’ unhealthy suspicion of the federal government and Democrats’ unhealthy trust of teachers’ unions. In other words, the worst of both worlds.

The legislation would weaken or eliminate every major piece of Obama’s education agenda. His five-year Race to the Top grant program, for example, was widely admired: It offered more than $4 billion in federal funding to states that took specific steps to improve student performance. Because of Race to the Top, more states set higher standards, allowed charter schools to

What should we do?

The people who came out to hear John and to be baptized by him got it right that they should not stop with merely listening to him and being symbolically washed by him at the Jordan. Understanding and realization must be followed by action and integration. The crowds, the general public, want an action plan

Our financial illiteracy

Some must have had second thoughts about John’s very concrete course of action. Did they hold on to their second coat and extra bread and old sandals, asking instead “What is extra for me, and what is enough?” and “Do I deprive myself for someone who has not worked hard as I have?” and “Is this not the expected way?

Do I risk my position if I go against the common practice?” How actual that John’s mission was about preparing the paths for the Lord and removing obstacles and overcoming hindrances, so that the One Mightier

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

the poor and the less educated. Men were found to be more literate (35 percent) than women (30 percent).

Interestingly, the study found that those availing themselves of financial services, such as those of banks and credit-card companies, would most likely have higher financial literacy, regardless of wealth or educational attainment. Nonetheless, the study concluded that generally, the rich have better financial skills than the poor. Interestingly also, financial literacy increases as income increases and educational attainment goes higher. Another astonishing finding is that financial literacy improves from general proficiency in mathematics.

In terms of world ranking, Denmark, Norway and Sweden had the most financially literate adults, all at 71 percent. They are followed by Canada at 68 percent; Israel also at 68 percent; United Kingdom at 67 percent; Germany and the Netherlands both at 66 percent; Australia at 64 percent; and Finland at 63 percent. Northern Europe is the world-

ability to hold states accountable for student performance.

States would still be required to conduct annual tests and report results by race and income, and they would still be required to intervene in failing schools. But they could weigh factors other than test scores and student performance—such as teacher engagement—to determine whether schools are meeting standards. A state could determine that all its schools are succeeding even if they have low test scores and high dropout rates, and there wouldn’t be much the Department of

Education could do about it.

The legislation would also weaken the federal government’s ability to encourage states to use data as part of evaluations for teachers and principals, a trend that unions have been fighting for years. Research shows that the best way to improve schools is to put effective teachers in classrooms. This bill would make it easier for schools to leave failing teachers in place without giving them assistance and insisting on improvement.

Of course, nothing prevents states from setting their own high standards

and using data to evaluate teachers and principals—and it would be great if all states did just that. Many Republicans insist that they largely support these reforms; they just don’t want the federal government involved. But experience shows that without federal oversight and enforcement, many states tend to take the path of least resistance.

Instead of demanding changes to the bill, the White House seems content to praise its aims and the spirit of compromise that led to it. There’s much to be said for bipartisanship. But not when both parties are wrong. Bloomberg View

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tandard & Poor’s (S&P) has defined financial literacy as “the ability to understand how money works in the world, how someone manages to earn or make it, how that person manages it, how he/she invests it, or how that person donates it to help others.” Without financial literacy, one cannot make important decisions regarding investment, savings, borrowing and, most certainly, about insurance. Indeed, it has been found, for example, that lack of understanding about interest rates has placed creditors at risk.

expand, intervened in failing schools, and used data to evaluate teachers and principals.

The federal government is no longer distributing Race to the Top grants.

Yet, if Obama signs the Every Student Succeeds Act, his successor would be hard-pressed to create something similar, because the new law would make it very difficult to create a state-based incentive program.

The legislation would also remove qualifications on some federal education funding, sharply reducing the Department of Education’s

Renewed with the holy spirit and fire

than he may come.

John understands that he is not the Messiah, the one to save the world. He himself must learn from this Mighty One, and he is not even fit to loosen his sandal strap. This One Coming is the one to baptize the people “with the Holy Spirit and fire.” It will mean the renewal of all, because the wheat will be separated from the chaff, the good from the bad. The winnowing fan and the unquenchable fire indicate that the good will eventually be rewarded and the bad punished. But above all, it means that the Spirit of the Mighty One will inspire and strengthen the people to do what should be done in charity and in justice, sharing with others and not oppressing them. The Spirit comes with the fire that purifies our actions and provides us the passion to be consistent.

Alálaong bagá, our Advent joy in the presence of the Lord is rooted in our confidence that the Lord is our savior. He is in our midst as in the Eucharist, giving us life and sending us off to share life with others in mercy and compassion. Our rejoicing is because of Him and in whatever circumstance. His saving, joy-giving presence transforms us in His Spirit to be witnesses in life to His glorious name.

Of those who save, 68 percent keep their saved money at home. Thirty-three percent (33 percent) keep their money in banks, 7.5 percent save through cooperatives and 2.6 percent keep their money in group savings (or paluwagan).

In terms of loan availments, 2014 World Bank data shows that the percentage of adult Filipinos who obtained a loan from a formal financial institution was 11.8 percent, which is lower than that of Indonesia at 13.1 percent, Thailand at 15.4 percent, or even Kenya at 14.9 percent. Most loans were availed from informal sources, such as friends and relatives (at 62 percent) and informal lenders (at 10 percent). Others obtained credit from cooperatives (10.5 percent), microfinance non-governmental organizations (9.9 percent). A mere 4.4 percent borrowed from banks.

In the insurance sector, as of 2013 figures, life-insurance coverage was only 32.5 percent of the population.

Three point 2 percent of the adult population is covered by microinsurance. On July 1 the National Strategy for Financial Inclusion (NSFI) was launched. It is an interagency initiative, among which is the Insurance Commission. Financial inclusion or inclusive financial system is defined as “a state wherein there is effective access to a wide range of financial products and services by all.” The NSFI identified four key areas where to promote financial inclusion: a) policy and regulation; b) financial education and consumer protection; c) advocacy programs; and d) data and measurement. It also identified six financial product and services: a) savings; b) credit; c) payments; d) remittances; e) investments; and f) insurance.

INSURANCE FORUM

S&P conducted its 2014 S&P Rating Services Global Financial Literacy Survey, touted to be the “most extensive measurement of global financial literacy to date,” and discovered that the Philippines ranked in the bottom 30 of 144 countries surveyed.

Only 25 percent of adult Filipinos are literate on the basics of finance.

The survey was conducted by interviewing 150,000 adults throughout 144 countries on four basic financial concepts: numeracy (interest), risk diversification, inflation and compound interest. The study was conducted with the participation of the Gallup World Poll, the World Bank and the Global Financial Literacy Excellence Center (GFLEC) based in George Washington University.

Among the surprising findings is that two-thirds of adults worldwide are financially illiterate. And that only one-third of adults worldwide are financially literate. This means that around 3.5 billion adults worldwide are financially illiterate. It also noted that those most likely to be financially illiterate are women,

from John. John’s answer to their question as to what should they do makes it clear that all are to care for the others in need. Extra clothing and food should be shared with those who have none; each one should look after his fellow beings.

Tax collectors and soldiers, despised by the public for being tools of the occupying Roman force and themselves exploiting others, turn too to John for instruction in righteousness. And they are told to be fair and not to extort, to be satisfied with what is theirs and not to exploit the vulnerable. John did not require those seeking the righteous way of life to follow him in his austere life and withdraw as he did from the world. Rather, he challenged them in their own particular lives and occupations to be caring and to be just, living in honesty and integrity.

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leader in financial literacy. South Asia placed at the bottom. In the Asian region, Singapore ranked the highest at 59 percent adult financial literacy. It ranked number twelve worldwide. And together with Bhutan, are the only Asian countries in the top 20. At the bottom of those surveyed were Yemen at 13 percent, Albania and Afghanistan both at 14 percent. Notably, the US had a financial literacy rate of 57 percent, ranking 14th worldwide.

In the Asean, Malaysia has 36 percent; Thailand has 27 percent; Indonesia 32 percent, Vietnam at 24 percent; and Myanmar at 52 percent.

This places the Philippines second from the last.

In a 2012 study on the Asia-Pacific region, the Philippines ranked 12th out of 15 countries in measuring the proportion of working-age population who have bank accounts.

In a study by the US Agency for International Development, only 26.56 percent of Filipinos aged 15 and above have accounts with banks or financial entities. World Bank’s own study concludes that only 31 percent of adults in the country own a bank account.

As of 2014, per Bangko Sentral ng Pilipinas (BSP) data, 595 municipalities in the country have no banks. This is out of a total of 1,490 municipalities in the country. This is notwithstanding the fact that domestic banking offices increased from 7,585 in 2001 to 10,315 by the end of December 2014. A significant increase can also be observed in the distribution of automated teller machines, which grew from 3,882 in 2001 to 15,562 by the end of December 2014.

In terms of savings, only a dismal 40 percent of adult Filipinos save.

Atty. Dennis B. Funa

Obama unlearns his classroom lesson s he approaches his last year in office, President Barack Obama seems weirdly passive about protecting one of his signature domestic achievements: education reform. It’s a mistake that will undermine future efforts to help American students compete and succeed.

Obama once could claim to have one of the boldest education agendas of any president in recent history.

Then, in October, he announced he would seek to limit testing. And now he’s indicated he’ll sign the bipartisan Every Student Succeeds Act, a bill

God’s mighty deeds. The glorious name of God, representing His very character as holy and powerful and merciful, is extolled by the transformation itself of the people. Only the Lord could have rescued and changed and made a people in need of salvation into witnesses of His majesty.

Their transformed lives extol to all the marvels the Holy One has accomplished. And this revelation of God’s saving might finds focus on the city of Zion, where the holy temple concretizes the earthly presence of the Holy One and where the people worship in joy at the divine presence.

Thursday, December 10, 2015

2nd Front Page BusinessMirror

A8 Thursday, December 10, 2015

Revised forestry plan carries hefty ₧123.49-B outlay in next 13 years

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O sustain the increasing demand for forest and forest-based products and ecosystem services provided by forest, the government needs to invest around P123.49 billion from 2015 to 2028, an official of the Department of Environment and Natural Resources (DENR) said.

Of the total proposed budget, 60 percent will come from public funds and 40 percent from private-sector investments.

Around P73.13 billion of the projected budgetary requirement will go to programs and activities that will address the demand for forest ecosystems goods and services; P47.6 billion for strengthening resilience of forest ecosystems and communities to climate change; P1.34 billion for promoting responsive governance; and P1.4 billion for other support programs.

The plan is to continuously rehabilitate the country’s open, degraded and denuded forest, increasing it from the current estimated forest cover of 7.84 million hectares to 10.9 million hectares by the end of 2028.

The forestry sector’s economic contributions remain nil as the country’s forest cover continuously dropped since the late 1930s until the 1990s, mainly because of poor

CALDERON: “This is a long-term investment plan which the government may need to invest on in the next 14 years.”

investment in forestry.

Over the last five years, the government has poured in over P25 billion in reforestation activities and is seeking a P10.19-billion budget for the implementation of the National Greening Program (NGP) in 2016.

Director Ricardo Calderon of the DENR’s Forestry Management Bureau (FMB) said such huge investment in forestry as required in the revised master plan takes into consideration the projected increase in demand for forest and forest-

based products brought about by projected population growth and impacts of climate change.

“This is a long-term investment plan which the government may need to invest on in the next 14 years,” Calderon says. The net present value at 18 percent is P80.76 billion. The projected internal rate of return is 38 percent and has a benefit cost ratio of 2.66 based on a financial viability study conducted by the DENR-FMB. The Philippine master plan for climate resilient forestry from 2015 to 2028 was developed through consultations with experts and various stakeholders that started in 2013.

The demand for forest goods and services will continue to increase mainly because of the increasing population. Demand for round wood, currently estimated around 4 million cubic meters will increase to more than double by 2025, requiring the establishment of 80,730 hectares of plantations. For fuel wood, the demand is expected to go up from the current 50.7 million cubic meters to 61.2 million cubic meters.

Also, the demand for water is expected to increase from 30 billion cubic meters in 1996 to 86.5 billion cubic meters in 2025, citing a Greenpeace 2007 report. This is about 60 percent of potential available water of 145 billion cubic meters. While most of these water resources are not accessible, the forestry master plan projected that several part of the country will experience water

stress condition in 2025.

To address the problem, the revised forestry master plan calls for the proper management and protection of existing protected areas (PAs) and more than 1.56 million hectares of declared watersheds.

The projection considered historical data that indicate the decline in forest cover in the Philippines until the 1980s.

During the period, the planners projected increasing interest to protect tourism sites within PAs, and greater demand to protect and rehabilitate forestlands and PAs to enhance protection against impacts of climate change-triggered extreme weather events.

The scenario was based on the climate projects in the Philippines by the country’s weather bureau, with mean temperature to increase from 27.4 degrees celcius to 28.4 degrees celcius in 2020 and 29.4 degrees celcius in 2050.

The climate projection is that Luzon and the Visayas will experience more rainfall of up to 43 percent in 2020 during the wet or rainy season, making the wet season more wet; and lesser rainfall of up to 33 percent in 2020 during the dry season, which will make the dry season drier.

With such climate scenario, forests above 1,000 meters above sea level will be most vulnerable, leading to extinction of some species. The scenario also warns against impact on livelihood, particularly fishing due to coral bleaching and farming

due to water availability.

Under such climate scenario, likelihood of more flooding, soil erosion, landslide, drought and water stress during the dry season is anticipated.

The overall goal under the revised master plan is to place all forestlands under sustainable forest management to meet the demands for forest goods and ecosystem services, strengthen resilience of forest ecosystems and forest-dependent communities to climatechange hazards, sustainably manage watersheds in partnerships with stakeholders an enhance decisionmaking through improved systems on information management and monitoring and evaluation.

Among the targets is to develop and approve management plans and put in place management bodies for 143 priority watersheds; identify and assess watersheds supporting irrigation facilities in coordination with concerned agencies; enactment of the Sustainable Forest Management Act and bills defining forestland boundaries within the next six year; develop forest-based industries with sustainable source of raw materials by 2020.

The plan also targets to develop and maintain 1.58 million hectares of commercial forest plantations by 2028, develop and maintain 201,840 hectares of bio energy/fuelwood plantations to support the national renewableenergy program and boost incomes of upland dwellers by an average of 50 percent by 2025. Jonathan L. Mayuga

ADB boosts Minda’s capacity in PPP project planning and implementation

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he Asian Development Bank (ADB) will be helping the Mindanao Development Authority (Minda) develop public-private partnership (PPP) projects.

In a briefing on Wednesday, ADB Philippine Country Office Richard Bolt told reporters that its work on PPPs with Minda will be the first extension under the Manila-based bank’s PPP policy loan.

“We will help Minda to establish a PPP [Center] which will be an extension of the national program. [There are] quite a few PPPs in the program that are already in the pipeline. This will be one of the first step we’ll take to building local capacity in PPPs,” Bolt said.

Bolt said these PPPs would likely fall in the category of solid waste management, water supply, sanitation and regional expressways in Mindanao. These, he said, would require regional perspectives that the national PPP Program will not be able to provide.

Bolt said the ADB will help Minda

build the capacity of local agencies and determine which projects would be suited to be undertaken as a PPP and those that are better financed by the local or national agencies.

“It is to help Minda do that calculations. [This will focus] Minda’s responsibility on regional development planning and monitoring. It's to help them to understand within the plan’s [Mindanao 2020] what is for PPP and what is for public investment,” Bolt said.

Last week the ADB disclosed that it is extending $600 million worth of loans to the national government to support its PPP initiative. The amount covers two $300 millionworth loans that seek to expand the private participation in infrastructure investment through the promotion of PPPs and support long-term finance for the Philippines.

The PPP-oriented loan will support improved systems to assess and budget for right-of-way acquisition and resettlement of communities. Cai U. Ordinario

www.businessmirror.com.ph

Car, truck sales from Jan to Nov rose 22.7 percent

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ombined sales of the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and the Truck Manufacturers Association (TMA) posted a 22.7-percent increase in the first 11 months of the year.

The auto manufacturers reported on Wednesday that sales from January-to-November period reached 261,930 units compared to the same period in 2014 at 213,427 units.

All car segments, as well as truck and buses categories registered at least double-digit growth of 12.3 percent.

For the said period this year, commercial vehicles sales went up by 19.1 percent to 156,010 units, from 130,990 units in the same period last year.

Sales of passenger cars grew by 28.5 percent to 105,920 units in January-to-November 2015 against 82,437 units registered in 2014.

Light commercial-vehicles sales also recorded over 100,000 mark.

Sales of this segment rose by 21.3 percent to 102,165 units in the first 11 months this year from 84,241 units last year.

Asian-utility vehicles registered a growth of 12.3 percent with total sales from January to November 2015 reaching 4 5, 8 32 u n it s, f rom 2014’s 40,803 unit sales.

In the same period, sales of light trucks jumped by 25.3 percent to 4,681 units, while trucks and buses categories IV and V increased by 24.1 percent and 154.6 percent to 2,181 units and 1,151 units, respectively.

Month-on-month sales of Campi fell by 5.9 percent to 26,979 units in November 2015, from 28,667 units in October 2015.

It was noted that four of the top 5 brands registered negative sales growth last month.

Toyota, the market leader, had decreased sales by 5.9 percent; Mitsubishi, down by 7.3 percent; Isuzu, down by -6.4 percent; and Honda, down by 12.2 percent.

Among the top 5 brands, only Ford vehicles recorded a growth of 12.2 percent for the month of November.

Campi President lawyer Rommel Gutierrez said the auto industry is optimistic that it hits its target of 310,000 unit sales by end-2015, which will also include sales of car importers.

Car importers group, Association of Vehicle Importers and Distributors (Avid), expects a 50-percent growth by end of this year, according to its Chairman and President Ma. Fe Perez-Agudo.

This means Avid may close the year with sales of more than 50,000 units. PNA

PHL to see rapid rise of elderly population–WB report

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he Philippines is aging faster than rich countries and will see a rapid increase in the number of seniors in just 35 years, according to the latest report from the World Bank.

In the report titled Live Long and Prosper: Aging in East Asia and Pacific, the World Bank said the population of Filipinos aged 65 years old and over will increase to 14 percent of the total population in 35 years from the share of 7 percent in 2035.

This, the World Bank said, is faster than what happened in advanced economies such as the United Kingdom, the United States and France at 45 years, 69 years and 115 years, respectively.

“East Asia Pacific has undergone the most dramatic demographic transition we have ever seen, and all developing countries in the region risk getting old before getting rich,” said Axel van Trotsenburg, regional vice president of the World Bank’s East Asia and Pacific Region.

“Managing rapid aging is not just about old

people, but requires a comprehensive policy approach across the life cycle to enhance labor-force participation and encourage healthy lifestyles through structural reforms in childcare, education, health care, pensions, long-term care and more,” he added.

However, other Southeast Asian economies are aging even faster than the Philippines.

World Bank estimates showed that in 15 years, Vietnam will see the share of its senior population increase to 14 percent.

Other Southeast Asian countries such as Malaysia, Indonesia and Thailand will see the share of their senior population increase to 14 percent in 20 years.

Singapore and Cambodia, meanwhile, will see the population of 65 years old and over increase to 14 percent in 25 years.

The World Bank also said there will be an increase in the working-age population across the region. The Philippines is expected to be among the leaders in the

regional increase in terms of percentage share of population and in absolute terms.

Data showed the percentage change and change in absolute terms in population of those aged 15 to 64 years old will be 5 percent, and close to 40 million Filipinos between 2010 and 2040.

“In lower-income green economies and some orange economies with younger populations, the share of the working-age population is not expected to shrink until after 2040," the World Bank said.

“In absolute terms, Indonesia and the Philippines will account for a large share of the regional increase, but in relative terms, Timor-Leste, Lao PDR, Papua New Guinea and the Philippines will lead the way,” it added.

The World Bank urged countries in the East Asia and the Pacific region, including the Philippines, to undertake a number of reforms to address the rapid aging of their populations. Cai U. Ordinario