Businessmirror December 3, 2015

media partner of the year

United nations

2015 environmental Media Award leadership award 2008

BusinessMirror A broader look at today’s business

www.businessmirror.com.ph

nn

Thursday 2014 Vol. 3, 10 No. 40 Thursday,18, December 2015 Vol. 11 No. 56

P25.00 nationwide | 5 sections 30 pages | 7 days a week

Power-rate hike in areas served by NPC imminent

INSIDE

C

ustomers of the National Power Corp. (NPC) will experience an increase in their power bills once the Energy Regulatory Commission (ERC) approves the state-run power firm’s application for recovery-cost adjustments.

SM Seaside city: Tourism by the sea

life

d1

health&Fitness

always a laker

NPC proposed to increase its rate by P2.0627 per kilowatt-hour (kWh) in Luzon, P2.3236 per kWh in the Visayas and P1.4534 per kWh in Mindanao.

The proposed rates, it said, reflect additional operating costs incurred by the NPC-SPUG (Small Power Utilities Group) as a result of the fluctuation of fuel prices used in power generation. NPC is allowed

C1

FACEbook C.E.O. PLEDGES TO GIVE AWAY 99 PERCENT OF SHARES TO CHARITY

to recover this deferred fuel costs through the Generation Rate Adjustment Mechanism (GRAM).

NPC-SPUG is responsible for providing power generation and the associated power-delivery systems in areas that are not connected to the grid. NPC’s application covers the billing period from January to June 2014.

See “Power-rate hike,” A2

75% of Asian adults financially illiterate

A

sports

By Lenie Lectura

lmost three-quarters of Asia’s adult population don’t have a clear grasp of key monetary ideas, including inflation and risk diversification, according to a study conducted by Standard & Poor’s (S&P).

In China 63 percent of adults with a credit card are financially illiterate and only 28 percent of Chinese respondents were identified as financially competent, it showed. Singapore had the highest percentage of people in the region with a good understanding of the key concepts, at 59 percent, while Cambodia and Nepal had the

PESO exchange rates n US 47.1530

lowest at 18 percent. “ There are correlations between financial literacy, financial access and the strength of markets,” Courtney Geduldig, executive vice president of public affairs at McGraw Hill Financial, parent of S&P Ratings, said in a statement on Wednesday. “Addressing financial literacy is a key strategy in building stronger, more accessible and sustainable markets around the globe.”

Financial inclusion is a challenge and an opportunity in Asia, with about 47 percent of adults in India

Max Chan Zuckerberg is held by her parents, Mark Zuckerberg and Priscilla Chan Zuckerberg. The Facebook CEO and his wife announced the birth of their daughter, Max, as well as plans to donate most of their wealth to a new organization that will tackle a broad range of the world’s ills. Mark Zuckerberg via AP

F

acebook Inc. cofounder and CEO Mark Zuckerberg said on Tuesday he and his wife would give 99 percent of their Facebook shares to charitable purposes.

Proceeds of the holdings by the couple, Zuckerberg and Priscilla Chan, of the publicly listed US social network currently worth $45 billion, will be managed by a new organization known as the Chan Zuckerberg Initiative.

On his Facebook page, Zuckerberg posted “A letter to our daughter,” who was born last week.

The couple promised that they would give away

their money “during our lives” through wealth charitable donations, private investment and promotion of government-policy reform.

About the new organization, formed as a limited liability company to be controlled by the couple, the 31-year-old Silicon Valley entrepreneur wrote, “Our initial areas of focus will be personalized learning, curing disease, connecting people and building strong communities.” Meanwhile, Facebook said in a securities filing Zuckerberg has planned to give away “no more than $1 billion of Facebook stock each year for the next three years.” PNA

See “Financially illiterate,” A2

n japan 0.3837 n UK 71.0926 n HK 6.0827 n CHINA 7.3693 n singapore 33.5513 n australia 34.4963 n EU 50.0906 n SAUDI arabia 12.5675

Source: BSP (2 December 2015)

A2

Thursday, December 3, 2015

News

BusinessMirror

news@businessmirror.com.ph

ECCP wants PHL to pursue bilateral trade deal with EU

E

By Catherine N. Pillas

uropean businessmen expressed concern over the diminishing competitiveness of the country vis-à-vis its neighbors, which is exacerbated by the failure of the Philippines to forge bilateral deals with its major trading partners.

“We should remember that countries around us are concluding agreements all the time. We cannot afford to stand still. For example, the Philippines dropped in the ease of doing business index. Has it become harder to do business here? No, not necessarily. It’s just that other countries are always modernizing rules to make it easy for companies to come in,” European Chamber of Commerce of the Philippines (ECCP) Vice President Erik Moller Nielsen said.

This, Moller noted, should prompt the Philippines to intensify talks with the European

Power-rate hike. . .

Union (EU) for the quick conclusion of the Philippines-EU free trade agreement (FTA).

The Philippines recently slipped by six notches in the World Bank’s Doing Business index, dragging down its competitiveness in starting a business among Asean countries by one step, or from sixth among 10 nations, to fifth. The proposed Philippines-EU FTA, specifically, is critical for the country, as it will allow the Philippines to gain access to the 500-million-strong EU consumer market, added Florian Gottein, ECCP vice president for Membership and Business Services.

Continued from A1

If approved, the proposed rates will be implemented over two years to fully recover P1,892,748,606 worth of deferred fuel costs to mitigate the impact to NPC customers in the missionary areas.

The state firm said its proposed 13th GRAM application was approved for filing by the NPC Board on October 7. It added that the proposed adjustment is “fair and reasonable as it is computed in line with the GRAM rules.”

In a separate application, the NPC is also seeking to recover P8,774,702 in deferred foreign exchange (forex) costs for the billing period of January to June 2014 through the imposition of a P0.0178-per-kWh incremental currency exchange rate adjustment (Icera) over a period of 12 months.

Again, the NPC said the proposed Icera, which was

approved by the NPC Board on October 7, is “fair and reasonable.” “The proposed Icera is based on foreignexchange-related adjustments attributable only to NPCSPUG operations,” the NPC said.

The GRAM and Icera are two ERC-approved adjustment mechanisms designed to allow the NPC to recover actual and incremental fuel, Independent Power Producers and forex fluctuation costs that it incurs in the course of producing electricity.

The NPC is required by the ERC to file the GRAM and Icera adjustments on a quarterly basis under an order issued in February 2003. NPC’s GRAM is included in the computation of the Manila Electric Co.’s generation charge, the biggest component of its electricity bill.

Progress on the FTA, however, has been slow due to inaction on the domestic front on particular economic policies that are at odds with the standards of the EU. The Philippines and EU have yet to launch formal negotiations and have been at the “prescoping” stage for nearly two years now.

For the moment, the clear advantage of the Philippines as a trading and investment partner over other Asean nations is its EUGeneralized System of Preference (EU-GSP+) privilege. The EU-GSP+ gives the Philippines preferential trade treatment, specifically the entry of 6,274 product lines to the EU at zero tariffs for a maximum of 10 years.

The Philippines is the only country in Asean that enjoys this “EU-GSP+” status.

This privilege should be maximized to boost the Philippines’s exports to the EU, Gottein added.

Newly installed ECCP President Guenter Taus said looking forward, the next administration should pursue competitiveness-enhancing initiatives such as the consistency of policies, honoring of contractual obligations by the government and more liberalized construction and engineering sectors.

Financially illiterate. . .

Continued from A1

—or 415 million people—lacking a bank account, S&P said. While the array of financial products available in Asia is growing rapidly, citing China where credit-card ownership has almost doubled since 2011, people still struggle with simple concepts like interest, it said.

The survey also showed: ■ 61 percent of Chinese adults don’t save for old age; ■ Six out of 10 Chinese adults don’t have formal savings, and about 20 percent of the adult population is “unbanked.” Bloomberg News

news@businessmirror.com.ph

The Nation BusinessMirror

Bongbong: BLBar passage depends on House quorum

By Jovee Marie N. dela Cruz

A

SENATE leader on Wednesday said that it may still be possible for Congress to pass the proposed basic law for the Bangsamoro Autonomous Region (BLBar), if the House of Representatives can muster a quorum to tackle its own version of the bill.

Sen. Ferdinand R. Marcos Jr., chairman of the Senate Committee on Local Government, said in a statement that he is ready to answer the questions of his colleagues on the BLBar, as the Senate resumes its deliberation of the bill this week.

“Deliberations of the BLBar in the House had been stalled because of a lack of quorum. Now, if they can muster a quorum to proceed with their discussions, it may be possible to pass the bill before our session ends,” Marcos said.

“We [Senate] are still in the period of interpellation. After that we will take up amendments that the other senators will propose.

Then, we will vote on it and pass it. I think the substitute bill that I wrote, once it has been properly amended by the senators...I think it should pass,” he added.

While he admitted that he has no control over the length of the interpellations, Marcos remains confident the Senate can find a

consensus to speed up its deliberation on the measure meant to bring peace to Muslim Mindanao.

“The peace process cannot end. We cannot allow it to end.

We must continue to find a way to bring peace to Muslim Mindanao,” the senator said.

Earlier, Speaker Feliciano Belmonte Jr. admitted that the problem on lack of quorum is killing the peace measure.

He said the long line of lawmakers who want to interpellate has stretched the legislative process for the BLBar. House Bill 5811, or the BLBar, is currently under the period of interpellation in the House of Representatives.

“The real problem here is that time is running out, because several lawmakers want to interpellate,” he said. Currently, there are at least 17 lawmakers who want to interpellate the peace measure.

Also, Centrist Democratic Party Rep. Rufus Rodriguez of Cagayan de Oro, the chairman of the House ad hoc committee on the Bangsamoro basic law, hinted at the death of the peace measure owing to lack of material time, as the Lower House is facing a serious absenteeism problem.

Rod r ig uez sa id t he quo rum problem has hounded the House since July.

Editor: Dionisio L. Pelayo • Thursday, December 3, 2015 A3

Comelec told to nix plot to eliminate Roxas foes

P

By Marvyn N. Benaning | Correspondent

ARTY-LIST Rep. Neri J. Colmenares of Bayan Muna said on Wednesday that the junking of the certificate of candidacy (COC) for president filed by Sen. Grace Poe by the Commission on Elections (Comelec) confirms the big plot of the Liberal Party (LP) to eliminate all the rivals of its standard bearer, former Interior Secretary Manuel A. Roxas II.

Next in line to be chopped by the LP, Palace sources intimated, is Vice President Jejomar C. Binay, who is reportedly set to be slapped with a plunder suit and detained next month.

Malacañang has denied having any hand in the cancellation of Poe’s COC by the Comelec’s Second Division, but the senator’s camp said the Palace has been managing the Roxas campaign and using everything at its disposal to get back at Poe, who rejected Presi-

dent Aquino’s offer for her to be the LP vice presidential candidate.

The Palace also rejected claims that it was behind the two-year campaign to prevent Binay from running through the 14-month Senate Blue Ribbon Subcommittee hearings on alleged anomalies involving the Vice President and members of his family.

Colmenares faulted the Comelec for disqualifying Poe based on her

lack of residency, which was held to be a material misrepresentation and, thus, a falsehood on the COC. Colmenares argued this technical basis for the verdict is violative of the right of the sovereign people to choose their president.

“Sen. Poe has decided to return, and already resided and worked in the Philippines since May 2005, she even enrolled her children in our country’s schools during that time. This was after Fernando Poe Jr. died in December 2004. She has already proven that she has indeed an intention to return, to stay and actually resided in the Philippines since May 2005, thus, surpassing the residency requirement for running for the presidency,” Colmenares said.

“This is really sad because the LP and its cohorts are using every issue they can hit Sen. Poe with even the foundling issue. They are essentially discriminating against abandoned children and depriving them of their rights,” he added.

Colmenares charged that the “Comelec Second Division only confirms the belief of many that President Aquino appointed members of the poll body might yield or succumb to the LP’s grand scheme

and antidemocratic maneuverings to eliminate a rival popular candidate so that Mar Roxas would have a chance of winning the presidency.

“We just hope that the Comelec commissioners would not allow themselves to be used by the LP for their political machinations to remain in power. Huwag sana silang magpagamit sa mga kapit tuko sa poder na gustong ipagpatuloy ang pagpapahirap nila sa mamamayang Pilipino,” Colmenares said.

Meanwhile, Poe’s vice presidential candidate, Sen. Francis G. Escudero remains confident that his running mate will be allowed to run for president, having met all the constitutional requirements to seek the highest post in the land.

Escudero said the resolution of the Comelec Second Division is just a temporary setback as he expects Poe to get relief, either from the Comelec en banc or the Supreme Court.

“We still have faith in our justice system. We believe that in the end, Sen. Grace will be allowed to run not only based on international and domestic laws, but also based on the factual situation of the case,” Escudero said. With Recto Mercene

TheBroa

Business

A4 Thursday, December 3, 2015

Climate accord: Negotiators tak

L

E BOURGET, France— France’s environment minister is welcoming US President Barack Obama’s pledge to push for a climate accord that includes legally binding promises.

Obama said on the sidelines of climate negotiations in Paris that parts of the accord should be binding to hold countries accountable.

But Obama’s remarks were a boost to many negotiators, including host France, who want a strong accord.

Environment Minister Segolene Royal told the Associated Press in Paris that “With Barack Obama’s comments we have crossed a new threshold.... We really feel a collective dynamic that has now been set in motion.”

She said “there was doubt before” about the US position. It “is really extraordinary news that comes at a good time, at the beginning” of the conference.

The latest news from the UN climate conference in Paris, which runs through December 11. All times local:

6:05 p.m.

AMID the talks in Paris, the Republican-led US House of Representatives was directly challenging President Barack Obama’s environmental policies, scheduling votes on Tuesday afternoon that would strike down rules on reducing carbon emissions from power plants, both current and future.

Republicans argue that the administration’s climate-change policies cost American jobs in a struggling economy.

At a news conference Tuesday morning, Speaker Paul Ryan, R-Wisconsin, was asked about the majority support in the United States for action on climate change and whether Congress was out of step with public opinion.

“I don’t think we’re out of step with public opinion wanting jobs, wanting economic growth, weighing the costs and the benefits,” Ryan told reporters. “I think when you weigh the costs and the benefits against these so-called legally binding obligations they don’t add up. I think it’s very clear people want jobs.”

5:50 p.m.

INDONESIA’S environment minister says the country is cracking down on those responsible for illegally set fires that have left thousands of square miles of pristine forest a smoldering ruin.

Siti Nurbaya Bakar, who’s attending the global climate-change talks near Paris, says “We put law enforcement on the ground. Anybody who is at fault regarding this, they have to [be held] responsible for this.”

President Joko Widodo said he was “ashamed” that authorities failed to prevent the fires, which are set in order to make the land available for farming. He ordered law-enforcement agencies to punish perpetrators, including revoking forest concessions and blacklisting those responsible.

The ecological disaster has inflicted a staggering toll on the region’s environment, economy and human health: 2.1 million hectares (8,000 square miles) of forests and other land burned, 21 deaths, more than half a million people sickened with respiratory problems and $9 billion in economic losses.

The government is drafting new regulations to stiffen penalties, reduce haze pollution and avoid forest fires. But the president has also asked for patience in tackling the problem, saying Indonesia needs three years to solve it. Malaysia has said that is not fast enough.

4:35 p.m.

LONG lines for snacks and drinks

have plagued visitors to the COP21 climate talks, with 40,000 delegates, reporters and activists all looking for a place to refuel.

But there was no line at #EnergyJuiceBar, a fun stand inside the so-called Generations Climate tent where environmental associations and other NGOs have set up stands.

The catch: to get a glass of juice at this stand, visitors have to work for it.

A pink bicycle and a black one are hooked up via a power generator to the stand’s two juicers. Hop up on the bike and start pedaling, and a power meter shows the watts being generated while an attendant shoves carrots, apple slices and beets into the machine.

It takes 130 watts to run the juicer, and about a minute of hard pedaling to get one small glass of juice. Breathless customers step off the bike as a smiling attendant hands them the glass. “Here you go, you earned it,” he tells each one.

4:10 p.m.

ONE climate expert says it’s common for international agreements to have parts that are binding and parts that aren’t, and what’s being discussed in Paris will likely not need approval by a reluctant Republican Congress.

Nigel Purvis, a former US climate negotiator who is now president of the non-governmental organization Climate Advisers, says the binding parts would be requirements to have a plan to fight global warming, but not the plan itself, and to report and monitor emissions. But he says individual US emission cuts would not be binding.

Purvis told the Associated Press at the Paris climate summit on Tuesday “there’s no international climate police that’s going to come and tell a country to do something more.”

He says Obama has all the authority he needs to enter into this type of binding agreement, thanks in part to a 1992 directive approved by the US Senate. He also says treaties that require approval by the US Senate are only 6 percent of the international deals that come across a president’s desk.

PRESIDENT Barack Obama speaks during a news conference at the Organization for Economic Cooperation and Development Center in Paris on Tuesday. Obama discussed the COP21 climatechange summit, and the threat of terrorism from the Islamic State. AP/EVAN VUCCI

Global concern about climate change In a few weeks, world leaders will gather in Paris to negotiate a climate change agreement that will frame the global agenda on this issue for the next decade and beyond. There is a global consensus that climate change is a significant challenge. Majorities in all 40 nations polled say it is a serious problem, and a global median of 54% consider it a very serious problem.

Global views on climate change Climate change is a very serious problem

74%

Latin America

Europe Asia/Pacific

38%

Middle East

45%

United States China

77%

61% 54% 45%

Africa

18%

Very concerned that climate change will harm me personally

Climate change is harming people now

52% 60% 48%

61% 27% 37%

26%

27%

41%

30%

49% 54% Global median

Very concerned that global climate change will harm me personally

63%

15%

51% Global median 20

30

40

50

40% Global median 60

70 80%

3:25 p.m.

PRESIDENT Barack Obama says he believes his successor will uphold US commitments in a climatechange deal—even if that person is a Republican.

Obama says Republicans who now say they oppose an international agreement to reduce carbon emissions are “playing to a narrow constituency” but would feel differently if they won the presidency and felt the pressure of leading a global community.

He says America’s status as a world power and its ability to influence events depends on “taking seriously what other countries care about.” He says other countries are taking climate change very seriously.

Obama spoke to reporters before leaving a global climate conference in Paris. He added that he doesn’t actually think his successor will be a Republican—he thinks Americans will elect a Democrat in 2016. He didn’t name names.

2:35 p.m.

OBAMA says he’s confident the world will forge a major climate change agreement in the coming weeks.

Obama told reporters he’s “convinced that we’re going to get big things done here.”

Obama spoke on Tuesday as he ended a two-day trip to Paris

Source: Pew Research Center Graphic: Staff, TNS

for a United Nations conference on climate. He was among dozens of leaders who descended on the city to kick off the final weeks of talks on an international agreement to reduce global carbon emissions Obama says he wants to see a deal that allows countries to continue to update their carbon-reduction targets regularly and one that allows developing nations to use new technology to “skip the dirty phase of development.” He says a deal is critical to the global economy and to US national security.

2:30 p.m.

PARIS police have extended a ban on public demonstrations around Le Bourget until the end of the conference on climate change.

The general prohibition put in place in the wake of the November 13 attacks in Paris came to an end on Tuesday but the ban has been extended until December 13 around the Champs-Elysées in central Paris and in Le Bourget, where the COP21 meeting is taking place.

On Sunday, police took 317 protesters into custody after activists seeking to call attention to climate change defied the ban on marches and clashed with police at the Place de la Republique, a central point for commemorations after the November 13 attacks that killed 130 people. All but nine have been released.

2:15 p.m.

AFRICAN leaders at international climate talks are stressing the need to address shrinking resources in the troubled Lake Chad region, where the Islamic extremist group Boko Haram carries out regular attacks.

The lake, surrounded by Chad, Cameroon, Niger and Nigeria, has shrunk as much as 90 percent compared to 1960, changing the lives of nearby farmers, fishermen and herders. Some also say the increasing desperation is driving people into the extremists’ ranks.

Niger President Mahamadou Issoufou, meeting at the Paris climate talks on Tuesday with other Lake

Chad leaders and France, says “there’s a close link between the drying-up of the lake and the terrorism of Boko Haram.”

He says “we must act quickly, before it’s too late” to help people in the region.

The Nigeria-based Boko Haram has expanded attacks this year into Cameroon, Chad and Niger.

The group wants to create an Islamic caliphate.

Its six-year-old uprising has killed thousands and driven as many as 2.3 million people from their homes.

1:30 p.m.

OBAMA says without ambitious action on climate change, people may be forced to flee island nations and will become refugees.

Obama is meeting on the sidelines of global climate talks in Paris with leaders from island nations hit hard by rising seas and increasingly violent storms. Presidents and prime ministers from Kiribati, the Marshall Islands, St. Lucia, Barbados and Papua New Guinea are attending the meeting with Obama.

Obama says those countries aren’t the most populous or influential. But he says their populations are “among the most vulnerable to the ravages of climate change.”

The Hawaiian-born Obama is referring to himself as “an island boy.” He says he understands the beauty and fragility of island life.

Obama is calling for global financing tailored to the unique needs of island nations as they adapt to climate change.

1:20 p.m.

OBAMA says the emerging global climate agreement must have transparency provisions and periodic reviews of carbon-cutting targets that are legally binding.

Obama is commenting on the legal framework for the agreement during a meeting with leaders of island nations hit hard by climate change.

Obama says the specific targets each country is setting to reduce greenhouse-gas emissions may not have the force of treaties.

But he says to hold each other accountable, it’s critical that “periodic reviews” be legally binding. He’s referring to a mechanism sought by negotiators under which countries would ratchet up their commitments every five years.

Whether the climate deal should be legally binding has been a major sticking point in the talks, in large part due to the US. Obama would face dim odds at getting the Republican-run Congress to vote to approve a new climate treaty. That set off a search for a compromise where parts of the deal are binding and others are not, sparing the need for a new vote in Congress.

12:50 p.m.

CHANTING “Keep this fair, do your share,” protesters at the Paris climate conference are warning that developing countries risk losing out on a global accord under negotiation to fight global warming.

A dozen activists unfurled banners and performed a skit on Tuesday outside the exhibition halls hosting high-stakes climate talks through December 11.

“COP is rigged for rich countries,” read one banner, referring to the conference’s formal name COP21.

A key sticking point in the talks is who should shoulder more economic responsibility for reducing emissions and helping countries cope with effects of global warming already underway.

Peruvian activist Maria Alejandra Rodriquez Acha said her country is facing climate threats on many fronts—from coastal erosion by the Pacific Ocean to shrinking forests in the Amazon.

12:30 p.m.

FRANCE is promising €8 billion over the next five years for investment in renewable energy in Africa and to increase Africans’ access to electricity.

President François Hollande’s pledge on Tuesday came in a meeting with 12 African leaders about the threats from climate change, including coastal erosion, advancing deserts and rivers that are drying up. The meeting is part of larger talks outside Paris this week and next aimed at an international accord to fight global warming.

“When a young student is forced to go study under a street lamp at night, it clearly demonstrates the electricity issue,” Malian President Ibrahim Boubacar Keita said.

aderLook

sMirror

www.businessmirror.com.ph | Thursday, December 3, 2015

A5

ke heart at Obama comments Hollande said, “The world, and in particular the developed world, owes the African continent an environmental debt.”

The meeting also focused on financing for an African Union initiative known as the Great Green Wall, launched in 2007 to gather 11 countries to plant trees to combat the encroaching Sahara Desert and help people adapt to climate change.

9:45 a.m.

FRENCH President François Hollande poses with participants in the Climate Generations area during the COP21, the United Nations Climate Change Conference, in Le Bourget, north of Paris, on Tuesday. PHILIPPE WOJAZER, POOL VIA AP

HOLLANDE is holding talks with African leaders about what their countries need to cope with and reduce global warming.

The meeting on Tuesday is part of broader international diplomatic efforts toward a possible long-term accord for all countries to cut man-made carbon emissions. Those emissions produce heat-trapping gases and scientists say are causing glaciers to melt and sea levels to rise and leading to more and more droughts and other extreme weather.

Hollande hosted President Obama and 149 other world dignitaries on Monday to kick off two weeks of UN-led climate talks outside Paris. The leaders agreed that something must be done to protect the planet for future

generations, but now must overcome disagreements over who should shoulder the economic responsibility for cutting emissions and protecting countries already hit by climate change.

9:15 a.m.

ENVOYS at the Paris climate conference say governments and companies need to do more to protect forests, which can help slow global warming.

Prince Charles, South American indigenous leaders and other dignitaries are holding a special meeting on Tuesday to call attention to shrinking global forests from South America to Russia and Africa.

Peru’s Environment Minister Manuel Pulgar-Vidal told reporters ahead of the meeting that companies, too, need to do their part to limit deforestation. Envoys are urging greater efforts against illegal logging.

The world’s forests play an important role in absorbing carbon dioxide released by man-made emissions from burning oil, gas and coal.

The meeting is part of two weeks of UN-led talks aimed at a worldwide, longterm accord to cut humanmade emissions blamed for climate change.

A6 Thursday, December 3, 2015 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Is China ready to reform its financial system?

C

hina’s five years of lobbying with the International Monetary Fund (IMF) for the inclusion of its legal tender in the club of elite currencies paid a good dividend on Monday, when the international organization announced it will add the Chinese renminbi (yuan) to the basket of currencies that make up its so-called special drawing rights (SDR).

The SDR is a global reserve asset created by the IMF 44 years ago to supplement its membercountries’ official reserves. Its value is currently based on a basket of four major currencies—the US dollar, the Japanese yen, the euro and the British pound. The basket will be expanded to include the yuan as the fifth currency, effective October 1, 2016. SDRs can be exchanged for freely usable currencies.

IMF Managing Director Christine Lagarde described the IMF Executive Board’s decision as an important milestone in the integration of the Chinese economy into the global financial system. She explained that China got the IMF seal of approval in recognition of the progress that the Chinese leadership has achieved in reforming the country’s monetary and financial systems. “The continuation and deepening of these efforts, she added, “will bring about a more robust international monetary and financial system, which, in turn, will support the growth and stability of China and the global economy.”

The IMF decision conferred prestige to the Chinese currency, and is expected to help stimulate modest demand for the yuan. But more important is the new credibility that the world’s secondlargest economy bagged with the IMF’s stamp of approval. The yuan’s new status should help expand China’s influence in global trade and finance, a development that augurs well with its campaign to be recognized as a global economic power.

However, not all quarters are happy with the IMF decision. A US senator quipped: “With this decision, the IMF is choosing to reward China’s currency manipulation, instead of combatting it.”

A former assistant US Treasury secretary for international affairs described the IMF decision as “foreordained by politics,” adding that the yuan doesn’t rank with the other four currencies in the SDR and is behind several others in terms of the extent of its global use.

Amid these criticisms, the US Treasury Department issued a short statement, saying that it supported the IMF decision. The implicit message is clear: Henceforth, China is expected to open up its insulated financial markets. This means allowing the People’s Bank of China to set interest rates without interference from the government.

The acceptance of the yuan as a reserve currency introduces new uncertainty into China’s economy and financial system, because it will be forced to relax currency controls to meet IMF requirements.

This could inject volatility into the Chinese economy, when foreign capital starts flowing into and out of the country cued on business prospects. As The New York Times reported: “This could make it difficult for China to maintain its record of strong, steady growth, especially at a time when its economy is already slowing.”

If the IMF, the international lender of last resort, gave the yuan greater weight than other worthy currencies, we hope that this will strengthen the hand of economic reformers in China who are working toward a market-driven Chinese economy.

Since 2005

BusinessMirror A broader look at today’s business Ambassador Antonio L. Cabangon Chua Founder Publisher Editor in Chief

T. Anthony C. Cabangon Jun B. Vallecera

Associate Editor News Editor City & Assignments Editor Special Projects Editor

Jennifer A. Ng Dionisio L. Pelayo Vittorio V. Vitug Max V. de Leon

Online Editor

Ruben M. Cruz Jr.

Research Bureau Head Creative Director Chief Photographer Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Dennis D. Estopace Eduardo A. Davad Nonilon G. Reyes Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Dante S. Castro

BusinessMirror is published daily by the Philippine Business Daily Mirror Publishing, Inc., with offices on the 3rd floor of Dominga Building III 2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines.

Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807.

(Circulation) 893-1662; 814-0134 to 36. E-mail: news@businessmirror.com.ph.

HOM

www.businessmirror.com.ph

regional offices

n DXQR -93dot5 HOME RADIO CAGAYAN DE ORO E-MAIL ADDRESS: homecdo@yahoo.com ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997 n DYQC -106dot7 HOME RADIO CEBU E-MAIL ADDRESS: homecebu@yahoo.com ADDRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994 n DWQT -89dot3 HOME RADIO DAGUPAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building,

Rizal Street, Dagupan City CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: 2nd Floor, Penamante Clinic Tiongson Street, General Santos City CONTACT NO.: 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO E-MAIL ADDRESS: homeiloilo@yahoo.com

ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila

Stock investing like a ‘wise guy’ John Mangun

OUTSIDE THE BOX

A

“wise guy” is either a highly ranked and successful member of an organized crime family or a person who thinks he knows more than everyone else. I usually use the terms expert and “expert” to mark the difference when it comes to the stock market.

Some people think that there is little difference between the stock market and organized crime. But I guess, you could say the same thing about politics, corporate boardrooms, even religion, and you might be accurate. In each of these worlds, it takes fairly much the same skill sets, attitudes and learning curves to be successful both as an organization and as a member.

Making your way to the top to be the Godfather, the Chairman of the Board, or the Pope depends on dedication and determination to be the best at whatever particular vocation you have chosen. In the Star Wars movies, “The Force” was the special power that was developed and used by both the good guys of the Jedi and the bad guys of the Sith.

Moving up the chain to become the Godfather—or a genuine expert stock-market investor—requires

passing through different stages of development. While you may be able to speed the process up a little, it is like climbing a ladder. If you try to skip any rungs, you will eventually find yourself falling back and starting over again.

In the first stage, you are young (in experience if not years), dumb (lacking knowledge) and full of impulses.

In this stage, you think with your heart. You take risks because of your desires, and do not fully think out the consequences of your actions with regard to risk. You think you know everything about the stock market, when, in fact, you know nothing.

The idea of actually listening to a mentor is something your ego cannot handle. Your biggest strength is that you are fearless and ambitious.

Your biggest weakness is that you don’t know that you know nothing.

Eventually—and, hopefully,

without losing the family fortune— you actually start thinking with both your heart and your brain. You may even find a mentor who has accomplished the investment goals that you want. In this stage, you begin to gain a bit of wisdom, because, unlike before, you are actually listening to other people and the market itself.

You begin to realize that you are a student of the stock market, and it is your teacher. Further, you have also learned that the road to investment success can be a long one. In short, the journey to success takes time.

The third stage is when the results of your journey are starting to pay off. Now, you think with your brain. Your heart and its emotions and desires have been left behind.

The profits start coming on a regular basis. But if, by this stage, the profits are not rolling in, get out of the market and stay out. Resign yourself to the fact you are not ever going to be the Godfather, the Chairman or the Pope. Invest for the enjoyment and challenge if you must, but do not rely on the stock market to provide you with steady income.

If you are successful enough to be able to treat stock-market investing as a stream of income, then your biggest strength is that you are finally “made.” You are a wise guy. At this point also, you are probably taking only a few and limited risks. Occasionally, you might jump on the high flyers. However, if you have built

your experience and knowledge on learning how those types of stocks trade, then you are probably good at it. They do not seem like high-flyers anymore like they did a few years ago, but are just second-line, higher risk issues that you can handle. You now might even be the mentor.

This third stage is when you probably have the right to say, “Partner, I know it all.” But you are way too smart and experienced to believe that. Further, you are still learning, not because you necessarily need to, but because it is enjoyable. Eventually, you are no longer a “wise guy” in the stock market; you are not just smart but you are actually wise.

Here is the best part; the stock market makes sense to you. You can see your mistakes often before you even make them. People might even listen to what you say.

Here is what you should be doing to be successful. If you are in the first stage, shut up and listen. In the second stage, listen and learn but act on what you are leaning. When you make it to the third stage, use your wisdom for more profits and to help others gain theirs.

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.

How big pharma could lose the war on disease Mark Buchanan

BLOOMBERG VIEW

T

he planned merger of pharmaceutical giant Pfizer with competitor Allergan, aimed in large part at cutting the combined company’s tax bill, illustrates a troubling trend in the industry: Firms are focused more on pursuing near-term profits than on the difficult, longer-term research needed to develop truly groundbreaking new drugs. This is unfortunate, because disease may be making a comeback.

Consider the accelerating spread of multidrug-resistant bacterial infections. There are now more than 2 million cases each year in the US alone. Last month scientists announced that they had found evidence, in farm animals in China, that genes for antibiotic resistance are being transferred directly among different bacteria—a trick (known as horizontal gene transfer) that will allow the resistance to spread more quickly than ever before.

The pharmaceutical industry’s reshaping doesn’t bode well for humanity’s ability to respond. Almost all antibiotics in use today were discovered between 1940 and 1960. Research progress since then has been

almost nil. A few synthetic drugs, such as the fluoroquinolones, were discovered in the 1960s, but these haven’t led to many other breakthroughs. To draw a parallel from the field of electronics, it’s as if progress had more or less stopped following the 1947 invention of the transistor.

Biologist Kim Lewis of Northeastern University, who has studied antibiotic development, sees the primary problem as the lack of any method for finding promising compounds. All the amazing progress a half century ago came when US biochemist Selman Waksman developed a technique to systematically screen soil bacteria. This is how he discovered streptomycin, the first

treatment for tuberculosis. After turning up other valuable drugs, such as tetracycline, erythromycin and vancomycin, the technique eventually petered out. We still have nothing to replace it.

Another problem is that bacteria are just hard to attack. It has taken them millennia of evolution to figure out ways to exploit one another’s weaknesses. Compounds we invent ourselves typically fail even to get inside bacteria, which use multiple barrier membranes to keep most chemicals out. The cell interior has sophisticated pumps to get rid of whatever does get through. Effective attacks can require doses a thousand times larger than for drugs acting against non-bacterial cells—doses that often have toxic effects on people.

When we stumble upon something that does work, bacteria quickly develop resistance.

That said, the situation isn’t hopeless. A concerted scientific effort would almost certainly yield some breakthroughs, if the pharmaceutical industry played a major role.

There are new leads. Earlier this year, Lewis and his colleagues discovered an antibiotic called teixobactin that, in mice at least, killed a host of pathogens, including the deadly bacterium MRSA (methicillin-resistant

Staphylococcus aureus). Even better, the bacteria didn’t show any signs of developing resistance. The researchers used a novel device—an “iChip” —to support the development of bacterial strains that do not take well to Petri dishes. The technique expands by about 50 times the number of bacterial species that biologists can grow and study in the lab. Given that most of our great ideas about antibiotics have come from bacteria, the method may promise other important discoveries.

To keep pace with deadly bacteria, we must explore these and other leads vigorously and with a genuine commitment. Last year US President Barack Obama issued an executive order establishing a strategic program to develop new antibiotics, and recognizing the challenge as a “national security priority.” Following through will require long-term vision and cooperation from government, academia and industry—that is, movement in a direction very different than what the Pfizer-Allergan merger indicates.

The world’s bacteria are sharing their best weapons, spreading new genes for antibiotic resistance, effectively cooperating against humans on a massive scale. We’re not yet mounting a sufficiently symmetrical response.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Thursday, December 3, 2015

Terrorism: A paramount Longing for transformation national security concern

water is unthinkable. The contradiction and the implausibility of what is asked for is tantamount to a reversal of fortune, like “sowing in tears and reaping in joy,” and setting forth with only a hope of harvest and returning home with abundant fruits, replacing their tragedy with good fortune.

It is their prayer, it is what they hope for. They are confident because God has always been gracious to them.

before their entry into the land. John at the Jordan symbolized the transformation called for by a new life.

John’s baptism of repentance for the forgiveness of sins proclaims this transformation necessary. As a symbolic ritual, washing with water stands for the desire to be cleansed of dirt, of sin. It is grounded on the repentance of the person asking to be washed, on the sinner’s conversion or change of heart and mind. This turning away from sin marks the entrance into a new form of life of union with God. It is the honest way of preparing the way of the Lord who is coming; to welcome Him one must be ready to give Him the space of one’s heart.

It is making straight what is crooked and winding, filling up valleys and gullies, making low mountains and hills that obstruct the way. With determination, one must do what needs to be done to ease the coming of the Lord.

The gospel narrative’s opening sentence not only historically dates the event, but it also assesses the Roman and Jewish political and religious leaderships. They were all bypassed by the Word of God, which has searched out for a prophet and spokesman, not in palaces or in the temple, but in the desert the place of purification and inner scrutiny.

In the desert the people of God wandered as they moved from the slavery in Egypt into the land promised them, crossing the river Jordan

The preparation is for the purpose of being able to receive the salvation the Lord brings to all humankind.

John is the voice, the herald of the coming of the Lord. The people have been in exile from their covenant with God; they need to undergo a desert crossing, a river washing, to see God and share in His salvation, to be liberated from the power of sin.

Letting go of sin only takes place in the forgiveness of sins that divine mercy makes possible. That is why John focused the people on the ne-

Msgr. Sabino A. Vengco Jr.

Alálaong Bagá

Ariel Nepomuceno

DECISION TIME

I

N the wake of the violent terrorist attacks in Paris by the State of Iraq and Syria (ISIS) on November 13, there is a growing recognition that there must be a swift, firm and united global action to stop this group and other variants from spreading more fear and brutality worldwide.

Recently, the shooting down of a Russian warplane by Turkey added another dimension to the discussions. The Asia-Pacific Economic Cooperation (Apec) touched on this very important topic on the sidelines as the latter was really focused on its principal thrust of economic integration and further trade liberalization, but during the Association of Southeast Asian Countries (Asean) summit a few days after, global and national security issues got the spotlight. Obviously, and realistically speaking, no amount of economic gain can be felt by the citizenry so long as lives are offered in the altar of terror, or when a nation cowers in fright when a nearby neighbor flaunts its military might to protect its alleged territory and appurtenant resources.

Early beginnings and expansion

The ISIS, having its early roots from al-Qaeda, has enlarged its role from a minor faction to that of broad coalition of fighters with superior military mastery and zealous ideological convictions. It now petrifies big areas in Syria and Iraq, and has used social media and technology to display cold-blooded tortures and executions of prisoners. Hugging the headlines appears to be a source of tremendous pride for this group and it will do anything to prove its point to its intended audience. In 2014 intelligence reports from the US show that ISIS has about 30,000 to 40,000 fighters and the number is multiplying. More recruits are coming from Europe and the other disenfranchised sectors in some Middle East countries. Even the US and the Asia Pacific have contributed to this growing number.

The shocking and painful truth posed by the show of strength of ISIS is that militant movements and extremists may not be limiting themselves to just the powerful or rich nations.

They have the capability, financial means and the political will to make it happen in any part of the world. One concrete example is the beheading of Bernard Ted Fen, who has been kidnapped in Sabah but allegedly killed in Sulu early this week by the Abu Sayyaf Group (ASG), known to be a supporter of ISIS. There are reliable reports that Malaysian militants are proliferating in Mindanao and are organizing a faction of ISIS in Southeast Asia by integrating the ASG and Jema’ah Islamiah groups. Clearly, the Asia-Pacific region is a very attractive area to wage terrorist attacks of this

sort, and the Philippines is one of those jurisdictions that is getting so much attention, aside from Indonesia and Malaysia.

Deeper causes

Terrorism does not exist in a vacuum, independent from other circumstances that enabled it to flourish. Terrorism is not a sole by-product of political ideology or religious belief. It is also caused by other factors, foremost of which is poverty—poverty, which transitions to social dislocation, then alienation from the rest of society and subsequently, the taking of arms against structures of power and governance. Some security or social analysts opine that there is no significant connection between poverty and the rise of terrorism.

They posit that terrorism is a result of years of “political persecution,” or isolation of dissonant voices in a world so slow in grappling with issues of diversity in ideas, beliefs and way of life. Others believe that terrorism is a manifestation of the great divide between the rich western bloc and the poor, powerless and marginalized east.

G

od’s people are filled with joy, because the Lord has done great things for them and will again surely help them (Psalm 126:1-2, 2-3, 4-5, 6). With repentance and conversion, all shall see the salvation of God (Luke 3:1-6).

Restore our fortunes, O Lord The memory of God’s past interventions on behalf of His people give them hope and confidence that God will again come to their assistance.

He cared for them before, as seen in the great blessing of the exiles’ return to Zion, when those vanished unbelievably found themselves on the way back to their land of origin. They were then in total amazement, filled with laughter and overflowing with joy at their incredible good fortune. And other nations could not but take note of God’s saving power, awestruck at the wonderful things He has done for His people. The people themselves knew that their God has preferential love for the poor and the oppressed, the homeless and the refugees.

So, now in their present predicament the people of God pray for deliverance. They know their situation to be impossible and only God can help them. It would be like having flood in the southern desert, a very arid place where having torrents of

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

Atty. Julie Ann L. Aranda

Tax Law for Business

T

he Bureau of Internal Revenue (BIR) recently issued Revenue Memorandum Circular 72-2015, circularizing the agreement between the Government of the Republic of the Philippines and the Government of the State of Qatar for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains, which has entered into force on May 19, 2015.

Although the said tax treaty was signed between the governments of the two countries way back in December 2008, it was only ratified by the President in 2011 and concurred in by the Senate in 2013. Based on the treaty, it shall have effect in respect of taxes covered by it, for any taxable period beginning on or after the first day of January next following that year in which the treaty enters into force. Thus, the benefits under the treaty will apply on taxes covered by the treaty beginning in January 2016 and thereafter.

Similar to the already existing tax treaties that the Philippines has with other countries, the new treaty contains provisions on the tax treatments of dividends, interest, royalties and capital gains, among others.

Insofar as dividend is concerned,

the general rule under our domestic law is that dividends due to a non-resident foreign corporation shall be subject to the 30-percent final tax, or in case the tax sparing provision applies, the final tax rate is 15 percent. With respect to individuals, the final tax rate is 20 percent if the recipient is an alien individual engaged in trade or business in the Philippines, or 25 percent if the recipient of the dividend is not engaged in trade or business in the Philippines. With the entry into force of the treaty with Qatar, these tax rates are reduced, or shall not exceed 10 percent, if the beneficial owner who is a resident of Qatar is a company (excluding partnerships), which holds directly at least 10 percent of the capital of domestic company paying the

I attended the first official digital wedding

By Leonid Bershidsky Bloomberg View

I

just attended the strangest wedding: The whole world was invited, and it went almost without a hitch.

Starting Tuesday, the government of Estonia, in a partnership with an organization called Bitnation, is offering public notary services to Estonian e-residents.

Its first official act was to register the marriage of two Spanish-born residents of London, Edurne Lolnaz and Mayel de Borniol. The marriage won’t be recorded anywhere; instead, it’ll be part of a blockchain—a distributed database accessible to anyone with a private key, much like the process that registers bitcoin transactions.

This is not the first blockchain wedding—David Mondrus and Joyce Bayo got hitched last year—but it’s the first with any kind of government sanction.

The Estonian e-residency program is

available to people who don’t live in the small Baltic state but would like to use its jurisdiction for business. You can sign up online, but a trip to Estonia is required to open a bank account. Then, a company can be set up and administered online (Estonia has no corporate tax on reinvested profits). An e-resident’s card isn’t a residence permit, and an Estonian citizen would need to register a marriage in the time-tested way. The e-residency is intended for those who don’t want to put down roots anywhere except the Internet, so it makes sense that it now comes with the opportunity to get “officially” married in the virtual realm.

The blockchain “notarization” may be untested and not recognized by courts and other authorities, but its advocates hope it will gain currency once more people adopt it, in the same way as bitcoin.

On a site they made to announce their wedding, Lolnaz and de Borniol, who had met online, wrote:

All shall see the salvation of God

cessity of making a path in one’s life so that God can come close with His gift of reconciliation.

It is really the coming to us of God and His unconditional forgiveness of our sins that clears the way for us to that fullness of life we long for. The human mind in its wounded state tends to enthrone the evil we have experienced: we remember the injustices, mockeries, hurts. And we become quick learners of evil we have received; our lives become a narrative of blows received and blows given, of being maltreated and of maltreating others, “giving as good as one gets.” Soon we are defined by the evil of the world, chained down by the helplessness of some proposed “karma” equation. In faith we know God is our salvation.

Alálaong bagá, our conversion called for by the coming of the Lord into our lives and into our world means our transformation from being seduced by sin into those who have recovered from sin by the grace of God. God’s transcendent graciousness and love have always brought deliverance to His people; His advent anytime and anywhere brings into bold relief His saving power. In sin we know we sow in tears, but in God’s mercy we hope to reap rejoicing.

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.

Philippines-Qatar double taxation agreement

Local response

Whatever differences there are in the evolution of this societal menace, one thing is clear. There must be a clear strategy and forceful tactical direction on how to address this concern. President Aquino has spoken on the urgent need to defeat terrorism when he recently gave orders to vigorously step up the nation’s police and military anti-terror operations against ISIS, the ASG and all similar groups in Mindanao and other environs. He communicated total solidarity with those countries that were mercilessly targeted by ISIS and other criminal elements.

These bold statements should be backed by a coherent security and enforcement plan, well coordinated with efforts of other antiterrorist government agencies in other nations of the world, and aligned with international organizations that have taken this issue to task.

George W. Bush said that “We do not create terrorism by fighting the terrorists. We invite terrorism by ignoring them.” This time, I have to agree.

Prepare the way of the Lord

A7

We are glomads—our lives both started out in the Basque Country (not officially a country) but we’ve been moving from place to place since then. We have no specific home because home is everywhere on this little blue planet of ours. Just like our life, we do not want our marriage to be linked to any particular nation state, nor any state’s definitions of what our relationship (marriage) and celebration (wedding) should look like—hence, we are writing our own rules.

The wedding was broadcast on the site for anyone who cared to “attend.”

The couple wrote their own marriage contract under the lax family law of Ontario, Canada. It has a 42-month term, but it can be amended and extended if necessary. The blockchain will store the contract and any eventual changes.

“Sorry everybody, this is a bit technical,” de Borniol muttered as the bride and groom entered their digital ID numbers.

The notarization didn’t work the first time. On the second attempt, a digital

signature certificate was finally generated, everybody whooped and the bride and groom kissed.

The actual service provider was not Estonia but Bitnation—an entity known as a decentralized autonomous organization, set up by Susanne Tarkowski Tempelhof. Born in Sweden, her resumé includes work as a public relations contractor for the US government in Afghanistan and Libya— “assisting with building and overthrowing government,” as she put it. That is what turned her off the idea of traditional government: I believed less and less in what the government did, and I started sympathizing more and more with the “ungoverned” societies.”The civil war in Libya was quite a wake up call. When I first came to the rebel-controlled territories there was de-facto no government at all (the rebel council were about 10 guys hiding out in a basement, and their sole job was to speak

dividends. The rate is 15 percent in all other cases.

With respect to interests, the tax treaty limits the tax to be charged to 10 percent of the gross amount of the interest. This is definitely lower than the 20-percent tax applicable to non-resident foreign corporations, the 20-percent tax applicable to alien individuals engaged in trade or business in the Philippines, and the 25-percent tax applicable to alien individuals not engaged in trade or business in the Philippines, as provided in our local tax laws.

As to royalties, the tax so charged shall not exceed 15 percent of the gross amount of the royalties based on the new treaty. Unlike some of the already existing tax treaties, the article on royalties of the Philippines-Qatar tax treaty does not contain a “most-favored nation” clause. This clause simply means that the tax to be imposed may follow the lowest rate of Philippine tax that may be imposed on royalties of the same kind paid under similar circumstances to a resident of a third state. Nonetheless, the 15-percent tax is still noticeably lower than the usual tax rates provided under the domestic laws, which require the imposition of tax at the rate of 30 percent on royalties payable to non-resident foreign corporations.

These are just some of the preferential tax rates that can be availed of under the Philippines-Qatar tax

treaty. Like in the case of other tax treaties though, these preferential tax rates may not apply if the beneficial owner of the income, being a resident of Qatar, carries on business in the Philippines through a permanent establishment, or performs in the country independent personal services from a fixed base situated here, and the income payment is effectively connected with such permanent establishment or fixed base. In such case, a different rule may apply.

Last, the circular provides that a Qatari resident income earner, who invokes the Philippines-Qatar double-taxation agreement, or an authorized representative, should file with the International Tax Affairs Division of the BIR an application for tax-treaty relief pursuant to Revenue Memorandum Order 72-2010.

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 julie.aranda@bdblaw.com.ph or call 403-2001 local 312.

with foreign media to gain recognition for the territories), but yet—everything worked amazingly well. Volunteers were doing everything from trash collection to traffic policing, neighborhood watch and cell tower engineering.

Tarkowski Tempelhof hopes Bitnation will become a platform for government services that aren’t provided by any specific government. Countries are supposed to recognize it “organically over time, in tandem with mainstream adoption. When Bitcoin was first invented it wasn’t recognized as a currency, until a significant amount of people started using it as a currency.”

Estonia has been the first country to extend semi-recognition to the seemingly quixotic project.

This may sound crazy, but here were these two young people wearing everyday clothes, talking about how they didn’t want to spend thousands of dollars on dresses, rings and a reception,

saying the Internet felt more like home than any country in the world. “Who decides what’s a country or what’s official?” de Borniol asked at one point.

Tarkowski Tempelhof was there, too, smoking cigarettes and drinking Champagne. “It’s the most romantic wedding I’ve ever seen,” she said.

The tech behind the digital services may be a little bit raw, but the blockchain is a great innovation. It’s being tested by big banks and stock exchanges as a way to process and store financial transactions. It’s extremely hard to alter without authorization, which makes it as safe as any government computer.

I’m not sure the rootless idealism of Lolnaz and de Borniol will ever become the norm: even digitally savvy Estonia is fiercely independent and concerned that a big predator, Russia, may be after its territory. I’d like to think, though, that the future holds more events like Tuesday’s wedding.