BusinessMirror February 6, 2015

three-time rotary club of manila journalism awardee 2006, 2010, 2012

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TfridayNovember 2014 Vol. 10 No. 120 40 Friday, February18, 6, 2015

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2.4% INFLATION IN JANUARY SLOWEST SINCE AUGUST 2013, BUT N.E.D.A. SAYS THREATS TO LOW-INFLATION REGIME REMAIN

El Niño, power woes to kick up prices

By Cai U. Ordinario

A

P.C.O.S. PROBE

n impending El Niño, or dry spell, and the country’s power woes could cause inflation to accelerate in 2015, according to the National Economic and Development Authority (Neda).

Neda Director General and Socioeconomic Planning Secretary Arsenio M. Balisacan, however, said the government is aware of these risks, as well as other factors such as the exchange rate and adjustments in the United States monetary policy that could alter the low-inflation regime.

“The lingering possibility of El Niño occurrence in the first quarter of 2015 and power woes remain an overhanging concern and must be holistically addressed,” Balisacan said.

“Despite the expected monetarypolicy adjustments in the US and the general concerns about the sustainability of growth in emerging economies, the peso is expected to remain relatively stable due to the country’s strong external position and will contribute to stable domestic prices going forward,” Balisacan, however, said.

Balisacan added that the favorable outlook on the production of agricultural commodities should further ease local price pressures in the coming months.

In January the country’s commodity prices continued to slide and began the new year with a growth of only 2.4 percent, according to the Philippine Statistics Authority (PSA).

This was slower than the 2.7 percent posted in December 2014 and Continued on A2

Retired and incumbent Commission on Elections (Comelec) officials, who inked the P268.8million contract with Smartmatic-Total Information Management Corp. (TIM) for the diagnosis and repair of Precinct Count Optical Scan (PCOS) machines, convince lawmakers that the transaction was aboveboard and beneficial to the government. Acting Comelec Chairman Christian Robert Lim (left) and former Comelec Chairman Sixto Brillantes Jr. debunked allegations that the deal with Smartmatic was tainted with irregularity, as it was a negotiated contract that did not undergo public bidding. They stressed that the government actually bagged a good deal out of it, saving as much as P60 million from the original contract price proposed by the election solutions provider. Sen. Aquilino “Koko” Pimentel Jr., cochairman of the Joint Congressional Oversight Committee on the Automated Election System, seemed to have found justifiable the explanations given by the poll officials. “I think as explained by former Chairman Brillantes, they [Comelec] got a better deal than the original deal terms that they were negotiationg on. As to whether it’s legal, the negotiated contract, let us leave that for the courts to determine,” he said in an interview with reporters after the hearing. Lim backed up the claims made

by Brillantes, who have since retired from the Comelec, along with two other Comelec commissioners on Monday, that their decision to seal the contract of Smartmatic went through proper deliberations and was not a result of a haphazard decision. ROY DOMINGO

PROPERTY VALUE IN PHL AMONG HIGHEST

By Bianca Cuaresma

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he Philippines suffers from a 21st century affliction known as urban agglomeration, whose practical effect is best shown by the overly congested state of housing in the National Capital Region (NCR), where prices are some of the world’s worst, according to analysts at McKinsey Global Institute.

The sheer density of dwellings and other structures in the NCR leads to the rise of real-estate prices

PESO exchange rates n US 44.0530

in the country that are some of the highest among developing countries. The phenomenon known as urban agglomeration is characterized by the tendency of the larger portions of population crowding to take shelter at the center of economic activity, distorting the nation’s demographics in the process.

“We find that, in countries where a large share of the population flocks to a single center of economic activity, or to a handful of megacities, housing prices [prove] higher than in countries where economic activity is more dis-

tributed,” the McKinsey study said.

Its analysts said that in some developing economies, for example, Indonesia maintains five urban agglomerations, while Vietnam has only two but that the Philippines has one huge lump right here in Metro Manila. “We find that Indonesia’s real-estate prices per square meter are the lowest, while Vietnam’s are higher and the Philippines’s are the highest,” the global management consulting firm said.

Its analysts further said the same pattern holds true in the more devel-

oped countries such as in Europe, with Germany having seven such urban agglomerations compared to London, which has only one. The McKinsey research show that Germany has much lower real-estate prices compared to the United Kingdom.

While its analysts urge the government to spread the growth areas and build several zones of economic activity outside Metro Manila, McKinsey said having concentrated points of development aren’t all that bad for the economy.

See “Property,” A8

‘Jan inflation within range of forecast for policy horizon’

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he moderating path of inflation in January further bolsters the view of a withintarget inflation for this year, according to the Bangko Sentral ng Pilipinas (BSP).

In a statement, BSP Governor Amando M. Tetangco Jr. welcomed the slower inflation print for the month, which he attributed to lower price changes in the utilities, gas and transport sectors. “[This] falls within our forecast range and bolsters our view of within-target inflation over our policy horizon,” Tetangco said.

“We will continue to monitor developments, particularly in international oil prices and their impact on financial market volatilities and inflation expectations, to see if there is need to make adjustments to our policy levers,” the central bank governor added.

The Philippine Statistics Authority (PSA) announced on Thursday that inflation averaged lower, to 2.4 percent in January from 2.7 percent in December. This was the fifth consecutive month that inflation trended down since September last year, after having peaked at 4.9 percent in June and July.

Earlier the central bank said the Cabinet-level Development Budget Coordination Committee (DBCC), where Tetangco sits as ex-officio member, decided to keep the current inflation target of 2 percent to 4 percent until 2018.

With the inflation outlook looking tamer down the line, several economists are of the consensus the central bank will likely keep the so-called policy rates intact where they are in the first half of the year at the very least. The central bank will have its first rate-setting meeting this year on February 12. Bianca Cuaresma

n japan 0.3763 n UK 66.9033 n HK 5.6816 n CHINA 7.0511 n singapore 32.6754 n australia 34.0835 n EU 49.9737 n SAUDI arabia 11.7396 Source: BSP (5 February 2015)

News BusinessMirror

Friday, February 6, 2015

A2

news@businessmirror.com.ph

El Niño, power woes to kick up prices Philippines says China rammed its boats in South China Sea ternational oil prices is a positive development for the country considering our import dependence in oil,” Balisacan said. Another factor that caused the slowdown in inflation, he said, were electricity rates. This was caused by lower generation charges, improved power plant availability and lower cost of fuel.

The Neda stated that electricity charges were down anew by 17 percent year-on-year, or by P0.219 per kilowatt-hour.

Balisacan also stated that no major economic and weather shocks caused commodity prices to spike.

He added that the lifting of the truck ban also eased inflation pressures.

“The lower inflation outturn in the first month of 2015 bodes well for consumption growth. It is aligned with market expectations given the

The shift in the rice harvest period from December 2014 to January 2015 in some provinces is seen to boost production in the first quarter of 2015.

“Reports also indicate that the National Food Authority will import an additional 600,000 tons of rice in the coming months to boost stocks in 2015,” the Neda said.

Balisacan also said significant rollbacks in the domestic pump prices of unleaded gasoline, diesel, kerosene and liquefied petroleum gas could contribute to the benign inflation regime.

Since the last quarter of 2014, international oil prices have slid remarkably due to rising global oil supply and sluggish oil demand due to the weak global recovery.

“The continuing decline in in-

Continued from A1

the 4.2 percent posted in January 2014. Inflation in January 2015 was also the slowest since August 2013, when inflation was at 2.1 percent.

Balisacan said this is largely due to cheaper rice and oil prices. Rice prices, which account for 38 percent of total food inflation, eased on the back of ample supply.

“Although the prices of rice are still elevated, the rate of price increase was slower because of more favorable supply conditions. Total rice stock inventory continues to register a double-digit year-on-year growth as of December 2014. This is in contrast to the decline in inventory recorded prior to November 2014,” said Balisacan, who is also the Neda director general.

consensus forecast of 2.4 percent for the same period. It is also within the medium-term inflation target set at 2 percent to 4 percent for the year by the Development Budget Coordination Committee,” Balisacan said.

The PSA said excluding selected food and energy items, core inflation further decelerated to 2.2 percent in January. It was noted 2.3 percent in the previous month and 3.2 percent in January 2014.

In NCR inflation eased to 1.5 percent in January. Its annual growth in December 2014 was 1.6 percent and 2.7 percent in January 2014.

Inflation in Areas Outside NCR continued to move at a slower pace of 2.7 percent in January. Inflation in December 2014 was pegged at 3 percent and in January 2013, 4.6 percent.

Noodle hunger in Southeast Asia seen testing Australian farmers

Spending. . .

Continued from A8

of the National Treasurer’s certification that the revenue collections exceeded the revenue targets. The voiding of this process under DAP is being blamed for the underspending of the government last year, which, in turn, is a factor in the low GDP growth during the third quarter at a measly 5.3 percent.

Government spending during the fourth quarter picked up, partly due to the releases of bonuses to government employees, bringing the full-year GDP growth to 6.1 percent, but still lower than the projected 6.5 percent to 7.5 percent.

Abad said that for 2015, underspending will no longer be tolerated, notwithstanding the unconstitutionality of DAP, because the government will come up with other sanctions that will make sure the line agencies will spend the money allocated to them.

W

heat farmers in Australia, the world’s fourthbiggest shipper, will face an increasing challenge keeping up with their neighbors’appetite for bread and noodles.

Demand from Indonesia, the Philippines and three other Southeast Asian nations is set to jump 40 percent to 13.2 million metric tons by 2020, said Greg Harvey, chief executive officer of Interflour Group Pte. That may outpace the ability of Australia to supply the variety used in soft bread and noodles, he said in an interview in Singapore.

Faster growth and an expanding population are boosting consumption of everything from wheat and sugar to cooking oils in the region, which has more people than the European Union. Indonesia will become the world’s second-largest wheat importer this year and has overtaken India as the top user of palm oil, the US government estimates. The US, Canada and Russia could fill any

shortages in Australian supply, he said.

“It’s a bullish story for Australian wheat,” said Harvey, whose company is a venture between Salim Group in Indonesia and CBH Group, Australia’s biggest grains shipper.

“There will be more demand in 2020 than the ability to supply, at least on paper. That’s a good problem to have.”

Wheat in Chicago entered a bear market last month, as world stockpiles of grains excluding rice head for the highest since mid-1980s, the International Grains Council estimates. Prices fell 13 percent this year to $5.11 a bushel on Thursday. The states of Western Australia and South Australia, top producers of the low-protein white wheat used in noodles and soft bread, are the country’s main suppliers to Southeast Asia, Harvey said. His projections assume that farmers will have difficulty increasing exports from the 11.1 million-ton annual average in the five years to 2014. Bloomberg News

3-DAY EXTENDED FORECAST FEBRUARY 6, 2015 | FRIDAY

TODAY’S WEATHER

Northeast Monsoon locally known as “Amihan”. It affects the eastern portions of the country. It is cold and dry; characterized by widespread cloudiness with rain showers.

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he Philippines said a Chinese vessel rammed three of its fishing boats last week in the West Philippine Sea (South China Sea), in the latest sign of tensions over disputed claims to rich fishing grounds in the area.

The Philippines filed a formal protest to the Chinese embassy in Manila on Wednesday over the incident, and lodged a separate complaint over illegal fishing after at least two dozen Chinese boats were seen collecting endangered giant clams in the Scarborough Shoal on January 22, the Department of Foreign Affairs said.

“The Philippines strongly protested China’s continuing actions to harass and prevent Filipino fishermen from legitimately pursuing their livelihood in that area,” it said in a statement, referring to the January 29 incident in which a Chinese coast guard vessel rammed three Philippine fishing boats.

The incident is the latest in the territorial dispute between the Philippines and China over the resourcerich shoals in the South China Sea, located about 150 miles from the Philippine island of Luzon. China claims most of the sea and in recent years has become more aggressive in asserting its claims. In January of last year Chinese ships used water canons to drive Filipino fishermen out of the Scarborough Shoal, which the Chinese call Huangyan island.

China’s claim to more than 90 percent of the South China Sea is based on a 1947 map, with a more recent

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LAOAG CITY 19 – 28°C

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7:09 PM

Watch PANAHON.TV everyday at 5:00 AM on PTV (Channel 4).

METRO DAVAO 24 – 30°C

SUNRISE 19 – 29°C

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PHILIPPINE AREA OF RESPONSIBILITY (PAR)

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version following a line of nine dashes shaped like a cow’s tongue, looping down to a point about 1,800 kilometers (about 1,120 miles) south from the coast of Hainan island. The area overlaps claims from Vietnam, Malaysia, the Philippines, Brunei Darussalam and Taiwan.

Huangyan, which is about 500 miles from China’s Hainan island, is an “integral part of Chinese territory,” Foreign Ministry Spokesman Hong Lei said on Thursday in Beijing.

“On January 29th multiple Philippines fishing boats lingered illegally in the shallow waters of Huangyan island disobeying the instruction of the Chinese side.

The Chinese coast guard sent a dinghy to ask the Philippine fishing boats to leave and some of those bumped slightly into each other.”

Chinese ships last year clashed with Vietnamese vessels after China towed an oil-exploration rig into contested waters near the Paracel Islands. The conflict, which led to the sinking of a Vietnamese fishing boat, triggered antiChinese riots in Vietnam.

“We’ve unfortunately had to have dialogue about this in the past, given, as you know, there’s a history here,” US State Department Spokesman Jen Psaki said in Washington on Wednesday, when asked about the latest incident.

Harvesting giant clams, which are endangered species, destroys corals and reefs, and violates three international conventions, the Philippines’ foreign affairs department said. Bloomberg News

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The Nation BusinessMirror

Palace allowing Congress to plug flaws in cease-fire pact with MILF

By Butch Fernandez

M

ALACAÑANG is leaving to Congress to review the flaws in its existing ceasefire agreement with the Moro Islamic Liberation Front (MILF).

The cease-fire agreement allowed the MILF and the Bangsamoro Islamic Freedom Fighters to shoot and kill 44 National Police-Special Action Force (PNP-SAF) commandos serving arrest warrants against two high-value terrorist suspects hiding out in territories known to be controlled by the MILF and BIFF in Mindanao.

Palace Communications Secretary Herminio B. Coloma Jr. said moves to prevent another breach in the agreement covering cessation of hostilities between government forces and Moro rebels are expected to be taken up during ongoing legislative deliberations on the proposed Bangsamoro basic law granting expanded autonomy to Muslims in Mindanao.

“Congress is already addressing [these] concerns as part of BBL review,” Coloma told the BusinessMirror.

The 44 slain members of the PNPSAF were waylaid by combined MILF and BIFF rebels in Mamasapano town on January 25 as the SAF commandos were pulling out after “neutralizing” their main target, Malaysian bombmaker Zulkifli bin Hir, alias Abu Marwan, a known member of the Jema’ah Islamiyah terror group who had a $6million bounty offered by the United States for his capture dead or alive.

The secondary target of the SAF commandos, Marwan’s sidekick tagged

as alleged terrorist Abdul Basit Usman, also the subject of a separate arrest warrant, managed to escape during the ensuing firefight, but President Aquino vowed that authorities would also get him anytime soon. This developed as the Office of the Presidential Adviser on the Peace Process (Opapp) debunked Arroyo-era Press Secretary Jesus Dureza’s claim there was no need for authorities to coordinate with the MILF in serving warrants of arrest against high-value targets in MILF territory.

“We wish to correct erroneous and misleading statements made by Mr. Jesus Dureza in a social-networking site, claiming that the cease-fire agreement and the implementing guidelines betweentheGRPandMILFclearlyneverrequired prior coordination in operations against high-value, priority targets,” an Opapp statement attributed to Brig.

Gen. Manolito P. Orense, chairman of the Government of the Philippines Ad Hoc Joint Action Group, said. It added that Dureza’s statement “is not true.”

“Mr. Dureza asserts that documents he signed in October 2001 as government peace panel chairman, and subsequent implementing guidelines and even the recent AFP/PNP operational guidelines clearly excluded operations against high-value targets like Marwan and [sic] Basit Usman.”

The general noted that Dureza was “referring to, and even posted the photographed documents as proof, the Revised Joint AFP/PNP Operational Guidelines for the Ad Hoc Joint Action Group signed on July 23, 2013, and the Implementing Guidelines of the Joint Communique of May 6, 2002.”

Editor: Dionisio L. Pelayo • Friday, February 6, 2015 A3

PNP waits to confirm ‘Marwan’ death

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By Rene Acosta

HE Philippine National Police stopped short of officially confirming on Thursday the death of Jema’ah Islamiyah leader Zulkifli bin Hir, alias Marwan, during the operation almost two weeks ago in Mamasapano, Maguindanao, although unofficial reports have confirmed it.

“There will be a formal announcement on this. If you can just give me some time for the announcement,” said PNP Officer in Charge Deputy Director General

Leonardo Espina during a media briefing that followed his command conference with top police officials.

On Wednesday a report from the US Federal Bureau of Investigation

(FBI) claimed DNA tests conducted from the tissue sample of Marwan initially point to a positive identification of the terrorist, although further examinations need to be further conducted.

The DNA testing, out of the cut index finger of Marwan, was reportedly compared or matched with the samples of his sibling who is currently detained in Guantánamo, Cuba, on charges related to terrorism.

But Espina hinted they are merely waiting for the final and official confirmation report from the FBI before announcing Marwan’s death, as this early, the possibility of giving the $5-million reward offered out of the terrorist’s head to the families of the killed commandos is already being considered.

“I am not really privy to that re-

ward. Anyway, we will include it in our formal announcement. Just wait for a while,” he said.

While he admitted to the affected morale of the policemen, Espina said there is no division in the organization.

Meanwhile, Espina also directed SAF commander Chief Supt. Noli Talino to make an inventory of the equipment that the SAF troopers lost during the operation, and which are now in the hands of the Moro Islamic Liberation Front (MILF).

He renewed his call to the MILF leadership that they should return their loot, which included the issued firearms of the commandos. If not, Espina refused to say what the PNP will do, answering: “We will cross the bridge when we get there.”

CHR visits Mamasapano in start of probe

By Manuel T. Cayon Mindanao Bureau Chief

D

AVAO CITY—Gov. Mujiv Hataman of the Autonomous Region in Muslim Mindanao (ARMM) accompanied on Wednesday the chief of the Commission on Human Rights (CHR) to visit the scene of a bloody fight in Mamasapano, Maguindanao, to start a CHR investigation.

Etta Rosales, CHR chief, inspected the site of the deadly encounter between the elite police force and Moro Islamic Liberation Front (MILF) fighters in Barangay Tukanalipao, Mamasapano, Maguindano.

Rosales urged ARMM officials to help shed light on the incident and look after the welfare of residents in the area, who are mostly farmers.

She said the incident disrupted the livelihood of farmers, and said the owner of the farm “had to harvest what was left of the crops.”

She and Hataman also talked to families and victims of civilians killed or wounded in the battle, including Sarah Langalan, 20, who lost her husband Badruddin. She said he was on his way to another house to charge his phone when the fighting broke out. Her husband was found hogtied and killed near the wooden bridge.

Both Hataman and Rosales urged the government and the MILF to push on with the peace process as a durable solution to the conflicts in Mindanao.

“The on-site inspection is an opportunity for us to know what happened last January 25,” Hataman said.

The encounter left 44 police Special Action Force (SAF) commandos, 18 Moro Islamic Liberation Front (MILF) fighters and five civilians dead, including a 5-year-old girl.

More than 1,000 families in the area have also been displaced and classes in at least 13 schools, with more than 6,000 schoolchildren,

have to be suspended.

Meanwhile, the Air Force lost one UH-1H military helicopter when it crashed in front of the headquarters of the 4th Infantry Division in Camp Evangelista, Patag, Cagayan de Oro City.

The Eastern Mindanao Command said the helicopter was about to go back to the headquarters of the Tactical Operations Group 10 in Cagayan de Oro City after transporting Maj. Gen. Oscar Lactao, the commander of the 4th Infantry Division, to the headquarters of the 402nd Brigade in Bancasi, Butuan City.

No one was reported hurt during the said incident.

Economy

A4 Friday, February 6, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

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Nlex-SCTEx integration done by Nov

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WWF-PHL pushing for higher FIT for wind farms

By Lorenz S. Marasigan

he Manila North Tollways Corp.

(MNTC) is aiming to complete the integration of the North Luzon Expressway (Nlex) and the SubicClark-Tarlac Expressways (SCTEx) by the fourth quarter this year, a senior official told the BusinessMirror.

This development came after the toll-road company and the Bases Conversion and Development Authority (BCDA) signed on Thursday the P650-million contract to link the two expressways, thereby making it faster for motorists to transfer from the Nlex) to the SCTEx and vice versa.

“Immediately after this signing, we will start the works. We are just waiting for the approval from the Toll Regulatory Board, but while waiting for that we’ll start the needed preparations,” MNTC President Rodrigo E. Franco said in an interview. “Our target is to complete the integration works by November.”

The integration of the two expressways would speed up the queues on the exit plazas of the Nlex and the SCTEx, increasing the amount of transactions per hour to 800 from the current 200.

“This would pave way for seamless travel between the two expressways, lessening the stops that motorists have to do in the current setup,” Franco said.

The toll-linkage project in-

volves the conversion of separate Nlex and SCTEx toll-collection systems into a single system that should allow more efficient toll collection and faster movement of traffic for motorists.

It also involves the installation and removal of temporary plazas, and the construction of interchange plazas that will also require the widening of existing entry or exit ramps.

BCDA President and CEO Arnel Paciano D. Casanova said the integration would facilitate trade to and from three key economic zones of Central Luzon: the Subic Bay Freeport, the Clark Freeport Zone and the Central Techno Park in Tarlac.

“The actual integration may even be faster because MNTC will soon be awarded the contract for the SCTEx as well,” he said. “The BCDA board formally approved the toll-integration proposal, clearing all hurdles to toll integration from our end.”

The tollways arm of Metro Pacific Investments Corp. will soon

By Roderick L. Abad

F

take over the reins of the central expressway after the disposition agency failed to muster bids for the price challenge of the thoroughfare’s multibillion-peso operations contract.

The toll-road business of tycoon Manuel V. Pangilinan offered P3.5 billion to win the deal way back President Arroyo’s term. It also proposed a 50-percent revenuesharing scheme.

President Aquino late last year

directed the state-run asset-disposition agency to subject the offer of MNTC to a price challenge “in the interest of transparency and for competition.”

The 94-kilometer expressway allows for the merging of Clark and Subic Bay Freeport zones into a single facility resulting in the convergence of land-, air- and seabased transport.

As of end-November 2014, the the number of vehicles that used

the toll road was at 10,305,688, a 12.93-percent increase compared to the 9,125,480 vehicles that used the toll road for the same period in 2013. It booked P1.07 billion in revenues during the period under review.

T he Pangilinan group also operates the Manila-Cavite Toll Expressway. Its parent company, Metro Pacific Tollways Corp., has significant interests in toll roads abroad.

Bill seeks merger of DBP, LBP ahead of Asean integration

By Jovee Marie N. dela Cruz

T

O strengthen their financial capabilities, improve the delivery of services, achieve economic efficiency and better support the development thrust of the government, a lawmaker has proposed the merger of the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP).

House Bill 5350, authored by Committee on Banks and Financial Intermediaries Chairman and

Liberal Party Rep. Nelson Collantes of Batangas, said the merger of DBP and LBP—includingn all aspects of implementation—shall be exempt from the payment of all national and local taxes, fees and charges, including, but not limited to, the income tax, capital-gains tax, creditable withholding tax, gross receipts tax, local transfer tax, documentary-stamp taxes and registration fees.

Under the measure, LBP shall be the surviving entity, being the

larger bank in terms of assets and resources. It shall also exercise the powers of DBP under its 1986 Revised Charter (Executive Order 81, dated December 3, 1986, as amended by Republic Act (RA) 8523 dated February 14, 1998).

The bill said the existing capital of DBP and LBP shall be combined, provided that the combined existing authorized stock of DBP and LBP, now in the amount of P60 billion, shall be increased to P100 billion. The increase will consist of 400,000 common shares w ith par va lue of P100 per share.

In filing the bill, Collantes said the merger is also in line with the curr e nt r e g u l a tory thrust to encourage the consolidation of banks to achieve higher lending capacities, diversify risks and improve the quality of their services.

The merger of DBP and LBP is necessary as the functions or purposes of both

banks duplicate and/or unnecessarily overlap with one another, which is one of the standards for implementing under Republic Act 10149, otherwise known as the GOCC Governance Act of 2011,” Collantes said.

According to Collantes, the merger will result in synergies in the operations of the two government financial institutions.

He said, although DBP and LBP have different mandates under their respective charters, they have similar authority to engage in universal banking activities.

“The fusion of the universal banking activities of the two banks is, therefore, expected to result in the economies of scale of banking operations. Said merger will improve the balance sheet capabilities of the merged bank, thus resulting in a stronger bank which will have a competitive edge over other banks not only in the domestic and global markets,” Collantes said.

The lawmaker said the consolidated entity would be more effective, efficient and sustainable in carrying out the mandates of both banks, particularly in anticipation of the wave of foreign banks that may enter the Philippine market upon the Asean integration in 2015.

LBP, according to its Senior Vice President Liduvino Geron, is a universal bank with the mandate to support farmers, including agrarianreform beneficiaries and fishers and

promote countryside development.

“In the process of consolidation, it needs to be ensured that the mandate to support farmers and fishermen and countryside development, for that matter, is retained,” he told the BusinessMirror.

He said LBP extends financial assistance to farmers and fishermen, and supports the priority programs of the government such as micro and small and medium enterprise (SME) development.

Geron said there are benefits to consolidation that include improved efficiencies and better capital ratios of the consolidated entity.

“We also maintain that the stronger and bigger bank should be the surviving entity,” he added.

LBP, the fourth-largest bank in terms of assets, has presence in all provinces.

Meanwhile, DBP’s mandate is to provide the medium- and long-term financing needs of agricultural and industrial enterprises, particularly in the countryside, with emphasis on SMEs. The parent bank and its subsidiaries such as DBP Data Center Inc., DBP Management Corp., DBP Leasing Corp. and Al Amanah Islamic Investment Bank of the Philippines, are engaged in development banking, financing, management services, computer services, leasing and remittance services.

With Genivi Factao

OLLOWING the commencement of operations of the new wind farms in Guimaras and Ilocos Norte, a global organization advocating for climate-change solutions calls for a hike in feed-in tariff (FIT) allocation for wind energy in the country to augment the looming power shortage this summer.

Energy Secretary Carlos Jericho L. Petilla earlier made a projection that the increase in demand from 8,717 megawatts (MW) last year to 9,011 MW during the first half of this year requires additional generating capacity.

With this, the World Wide Fund for Nature (WWF) is hopeful that the Department of Energy (DOE) will immediately increase the wind FIT allocation to help ease the projected lack of energy supply this March.

Citing data from the Wind Energy Development Association of the Philippines, WWF-Philippines Climate and Energy Unit Head Gia Ibay said March seasonally has the highest wind-energy output occurrence each year.

“Incidentally, this is the same month when our projected 2015 power shortage is slated to worsen,” she said.

The DOE recently supported the goal to increase installations for solar energy under the FIT regime.

Through the “Seize Your Power” campaign, WWF-Philippines continues to convince both public and private sectors that renewable energy is the main solution to the country’s power requirements.

With the support for solar power in place, the government’s energy arm is now encouraged to turn the table for wind energy this year, which, according to the WWF, is a “firm, next step” that it can commit to in 2015.

The organization’s “Seize the Wind” campaign, which gathers stronger support for Philippine wind farms, is the program’s first phase that aims to increase the FIT allocation for wind energy from 200 MW to 500 MW. The newly operated wind farms in Ilocos Norte and Panay have already added 303 MW to the country’s power supply.

“By ‘seizing the wind,’ we can augment our power supply this 2015,” she said.

Wind farms are faster to build and are becoming more economical power sources, freeing energy-generation companies and consumers alike from the need to import expensive fossil fuels, like coal and oil.

Ideally, they take just about a year to go online, compared with conventional fossil fuel-powered plants, which can take up to four years to construct.

Approximately around 70 percent of electricity nationwide is currently generated from fossil fuels, with 90 percent of coal and oil resources imported at different prices from other nations.

“It’s time for us to divest from fossil fuels and prepare for a windfall of clean and affordable power for all Filipinos,” Ibay said.

DENR cuts process on grant of ECC-exemption permit

By Jonathan L. Mayuga

C

ertificate of noncoverage (CNC), a permit that will exempt development projects from environmental compliance cerficates (ECCs), can now be obtained online, as part of efforts to streamline and speed up the CNC application process for projects that fall under “Category D” of the Environmental Impact Statement (EIS) system, Environment Secretary Ramon JP Paje said.

He said the Department of Environment and Natural Resources (DENR), through the Environmental Management Bureau (EMB),

has issued a memorandum circular providing for electronic transactions of CNC application and processing.

Category D refers to projects that are unlikely to cause adverse environmental impacts.

These involve land developments above 1 hectare, with no toxic or hazardous materials, substances and products, including those on the revised Priority Chemical List and Chemical Control Order under Republic Act 6969, or the Toxic Substances, Hazardous and Nuclear Wastes Control Act. “This new system has been designed to

speed up and simplify the processes associated with projects that do not require ECCs. It allows for the secure online and paperless transaction 24 hours a day, seven days a week,” Paje said.

An ECC is issued to certify that the project under consideration will not bring about an unacceptable environmental impact and that the proponent has complied with the requirements of the EIS system.

An online application process enables easier communication between the parties and faster transactions, the DENR chief said.

Economy BusinessMirror

news@businessmirror.com.ph

Friday, February 6, 2015 A5

House needs more time to OK economic Cha-cha

S

By Jovee Marie N. dela Cruz

peaker Feliciano Belmonte Jr. said the House of Representatives still needs more time to deliberate and pass the proposed economic amendments to the 1987 Constitution. allhome daang hari opens The grand opening of AllHome Daang Hari, led by former Sen. Manny Villar (fourth from left), was graced by business partners, media executives and key officers of the MB Villar Group. With Villar are (from left) Starmall Operations Head Florence Bemardo, Starmall President Jerry Navarete, President of AIIHome Corp. Benjamarie Serrano, Camilie Villar and Chief Finance Officer Salie Coloma.

BSP crafting financial-inclusion strategy

By Bianca Cuaresma

T

he Bangko Sentral ng Pilipinas (BSP) bared its plans to intesify its drive toward financial inclusion, with the central bank governor announcing that it is currently drafting a national program for a more systematic implementation of financial-inclusivity programs.

In a blog authored by the central bank governor, Amando Tetangco Jr., for the Alliance for Financial Inclusion (AFI), the BSP chief said the framework that they are currently drafting will provide a national strategy for the country to push financial inclusion

—enjoining other government agencies and the private sector in the cause.

“TheBSPpreparedaninitialdraftofthenational strategy for financial inclusion, and is in the process of convening relevant stakeholders to discuss the way forward,” the BSP governor said.

“The BSP takes the route to champion financial inclusionandcallotherstoactionbyspearheadingthe development of a national strategy. This will provide a framework that will enable the government and the private sectors to take a coordinated, organized and efficient approach toward building an inclusive financial system,” he added. Tetangco further said

this national framework will push for an environment that will foster cooperation and coordination with stakeholders.

It is also needed, according to the governor, to avoid duplicating efforts, set a common direction and to ensure the delivery of the action items set in the singular strategy. AFI is a network of financial and monetary officials from developing and emerging countries across the globe, with the aim to increase appropriate knowledge and implementation strategies for financial inclusion —or being able to provide financial access to the low income or rural sectors of the country.

Belmonte said more members of the lower house want to have deeper discussions on the Resolution of Both Houses 1, or the proposed amendments to the economic provisions of the Constitution.

“Most of the interpellation is over [last December], but now the number of interpellators is increasing,” Belmonte said.

The House of Representatives minority bloc, the interpellators of the so-called economic Charter change (Cha-cha), vowed to block any efforts to amend economically or politically the 1987 Constitution.

They said any form of Cha-cha now, whether it be economic or political, is dangerous because it will open the floodgates for any or wholesale amendments to the Constitution.

The Makabayan bloc is composed

of Party-list Reps. Neri Colmenares and Carlos Zarate of Bayan Muna; Luz Ilagan and Emmi de Jesus of Gabriela Women’s Party; Rep. Antonio Tinio of ACT Teachers; Rep. Fernando Hicap of Anakpawis; and Terry Ridon of Kabataan.

Moreover, Belmonte added that he is confident that members of the ruling Liberal Party and the majority at the lower chamber will join him in passing the resolution.

According to the Speaker, the lower chamber is still the main proponent of the economic Cha-cha and senators would still wait for the House version once it passes the third reading before the upper house tackles it.

“Once we pass it here in the House, the Cha-cha will pass easily in the Senate,” he said.

The amendments to the Charter

will be approved through separate votings by the both chambers, with a three-fourths vote required from them.

The resolution, filed by Belmonte and Sen. Ralph Recto, is eyeing to amend provisions on the 60-40 rule that limits foreign ownership of certain activities in the Philippines.

The resolution will include the phrase “unless provided by law” in the foreign-ownership provision of the Constitution, particularly land ownership, public utilities, natural resources, media and advertising industries.

Under Article XII of the Constitution, foreign investors are prohibited to own more than 40 percent of real properties and businesses, while they are totally restricted to exploit natural resources and own any company in the media industry.

Earlier, several businessmen expressed support for the passage of the economic Cha-cha.

B u s i n e s s m a n M a n u e l V. Pangilinan has said that to promote inclusive growth in the country, Congress should pass the resolution amending the economic provisions of the 1987 Constitution.

Makati Business Club Chairman Ramon del Rosario Jr. also indicated his support to the move to amend the Constitution.

Opinion BusinessMirror

A6 Friday, February 6, 2015

editorial

Already a failed state

T

HE tragedy and disaster that occurred in Mamasapano, Maguindanao is not going away easily or without long term repercussions.

The millions of words that have been written and spoken in the last week have dissected the situation in Muslim Mindanao down to the minutest detail and accurately for the most part. We have learned more of the political and military rivalries, the dire economic situation in the region and the attempts and missteps to achieving peace on all sides.

However, if you look at the bigger picture, whatever legal form the autonomous political entity of the Bangsamoro may take, it is already a failed state.

The Autonomous Region in Muslim Mindanao (ARMM) region was first created on August 1, 1989 through Republic Act 6734 which President Benigno Aquino III described as a “failed experiment.” The implication of the president’s statement is that the way that the ARMM was structured is where the failure lies and the new Bangsamoro Basic Law (BBL) will be better and achieve the desired results of peace and prosperity.

But what is being ignored in the conversation is that after 26 years of a degree of autonomy, the people of the ARMM are really no better off today than at the beginning.

The ARMM has its own government, its own ability to make decisions in the same way as any of the other Philippine provinces, and both domestic and international encouragement and assistance. To this day, it is a failed state with little to inspire confidence that things will change for the better under the BBL. Poverty is the highest of any province in the country. The ARMM receives approximately 98 percent of its operating revenue from the National Government, and has yet to create significant, viable sources of additional revenue. The ARMM government is unable to keep peace and order in its own territory, not due primarily to national government interference, but because of factions within its own peoples.

A failed state by definition is a state whose political or economic system is become so weak that the government is no longer in control. We have yet to hear any rational argument that this will change under the BBL or any other framework.

If the ARMM were a sovereign country, it would probably rank in the same category as South Sudan, Somalia, Yemen and the Central African Republic did in the “Fragile States Index” of the international Fund for Peace.

The Philippine government has a duty and obligation to the Philippine citizens of the ARMM. However, unless and until the leaders of the ARMM and of all the factions take a unified responsibility for their government and the people, it may be another 26 years before genuine peace and prosperity comes to the region.

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No overprice James Jimenez

E

spox

VER since the first working day of 2015, the Commission on Elections (Comelec) has been on the receiving end of all sorts of accusations of wrongdoing in relation to the preventive maintenance proposal it approved. For the most part, the brick bats being hurled had to do with some sectors’ speculative fears that the Comelec chairman had entered into a sweetheart deal, circumventing public bidding, to the disadvantage of the government.

But of all the allegations being bandied about, the most cringe-worthy one was the claim of overprice. Apparently, some quarters believed that the 300 million price tag was simply too much for something as pedestrian as conducting diagnostics on the Precinct Count Optical Scan (PCOS) machines used in the elections of 2010 and 2013. What made this claim objectionable was that it was being made, on the one hand, long before the actual contract was finalized; and on the other hand, by quarters that ought to have had a better grasp of the complexities involved in conducting preventive maintenance on 82,000 PCOS machines.

The contract signed earlier this week however, reveals why it is never a good idea to traffic so heavily

in hypotheticals.

First of all, the contract ended up costing the Comelec less than initially thought: thirty-one million and two hundred thousand pesos less, to be more precise. After almost a month of intense negotiations, the contract price was brought down from 300 million to 268,800 million pesos. Simply dividing that amount by the number of units to be maintained—as the proponents of the overprice theory routinely did— gives you a price point lower than you might expect to spend getting your smartphone repaired.

Second, the scope of work was revealed to be much broader that the “mere diagnostics and minor repairs” that had some people wondering whether the whole undertaking

would be worth it. Now, we know that the contract will actually cover, not just diagnostics but also a physical inventory count of all the PCOS machines to be maintained; the examination of every PCOS machine to determine the required refurbishment to bring them back to working condition; the performance of a full preventive maintenance program on each PCOS machine; the performance of all repairs and replacements of the defective parts; and the full replacement of irreparable PCOS machines.

Those last two inclusions bear repeating, I think. All repairs and replacements of defective parts; and full replacement of PCOS machines found to be beyond repair.

In other words, at the end of this preventive maintenance project, most of the PCOS machines will have been made just like new, while the rest are literally going to be brand new. And that is exactly the kind of reassurance we need when we remember that these machines are going to be used in more than 80,000 precincts, in an electoral exercise that will give the country its next President.

SK postponement

ANTICIPATING the impending passage into law of House Bill 5006, which was recently adopted by the Senate en toto, the Comelec had slowed down its procurement pro-

ceedings considerably. As a result, essential supplies—like ballot box padlocks and indelible ink—were put on hold, in order to minimize expenses should the law postponing the Sangguniang Kabataan elections actually be passed.

This was done with the expectation that the required legislation would be passed sooner rather than later. Unfortunately, the process has taken longer than expected. Now, with these essential supplies still unbought, and the SK Election Period upon us, it has become clear that if the polls are held as scheduled on the 21st of February 2015, they will not be as secured as they ought to be.

Without padlocks, the ballot boxes will be that much easier to force open, leaving the contents vulnerable to all sorts of skulduggery; and without indelible ink, there will be no reliable way to prevent flying voters from having a field day at the expense of the sanctity of the elections.

This has led the Comelec to invoke its authority, under law, to reschedule the elections to a date “reasonably close” to the elections not held. More specifically, the 25th of April 2015.

This will make it possible for the necessary procurement procedures to be held, to ensure that the SK elections, if they are not postponed by law after all, will be free, orderly, and honest.

James Jimenez is the spokesman of the Commission on Elections.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Piketty diagnoses Japan’s sick economy

Digging one’s grave Tito Genova Valiente

William Pesek

BLOOMBERG VIEW

T

OYOTA’S projected record $18-billion windfall profit should put a smile on Japanese Prime Minister Shinzo Abe’s face.

This was, after all, how his economic strategy was supposed to work—after two years of driving down the yen and filling the coffers of the nation’s giant exporters, they, in turn, would give workers fat-pay rises. Hello consumer spending, good-bye deflation.

Except, Toyota isn’t sharing the spoils. Like most of Japan’s industry bosses, Akio Toyoda, the company president, is hoarding the cash. Abenomics may be great for corporate Japan, but most of the nation’s 127 million people are still waiting for any benefit. How to move the wealth along? Well, there’s someone traveling the country who might offer Abe’s team a clue: Thomas Piketty.

Over the past week, the French economist has received rock-star treatment in Japan, where the translation of his 2013 book on inequality will soon hit bookshelves. The problem, Piketty argues, is that the Bank of Japan’s (BOJ) ultra-loose policies are ginning up stocks and real estate, assets that tend to further enrich the wealthy.

Meanwhile, the 30-percent plunge in the yen, disappearing bank-account interest and rising household costs are hurting everyone else. The BOJ, in other words, is increasing the gulf between the haves and have-nots.

“It’s not enough to print money,” Piketty told Bloomberg’s Daniel Leussink in Tokyo. “If you print money, you can create bubbles on the stock market, on real-estate prices. But that’s not necessarily increasing consumer-price inflation and increasing growth.”

By relying almost entirely on “creative” monetary policies and delaying any structural reforms, Abenomics risks increasing Japan’s Gini coefficient—a measure of a nation’s rich-poor gap. Japanese have long been proud of being ichioku-sohchu-ryu–a nation of middle-class people. Yet, Japan’s sense of egalitarianism is fading as fast as its tradition of lifetime employment. At 0.336, Japan’s Gini ranking is already worse than that of Germany, France, Italy and Canada.

Why are CEOs being so stingy? Abenomics has three arrows: monetary expansion, fiscal stimulus and a deregulatory “big bang.” The first two have been deployed, but Abe has failed to lower trade barriers, loosen labor markets, reduce red tape or encourage entrepreneurship. Corporate executives say higher wages are contingent on these upgrades; Abe wants paychecks fattened now. As the standoff continues, consumer-price gains (2.4 percent year-over-year) are setting Japanese back.

Just as Japan is a laboratory for what happens when an entire population ages, it’s a testing ground for whether zero

interest rates can do more harm than good. In a May 2014 paper, titled “How Does Unconventional Monetary Policy Affect Inequality?,” economists Ayako Saiki and Jon Frost of the Netherlands central bank found that “structural reforms can play a role to offset widened income inequality.” The longer Abenomics remains just a monetary game, the more Japanese society will suffer.

“Abe talks about tackling deflation, but with so many younger workers sidelined into low-paid, dead-end jobs, they can’t spend much, won’t have families, won’t buy houses or invest in stocks,” said Jeff Kingston, director of Asian Studies at Temple University in Tokyo.

Japan’s relative poverty rate–those living on less than half of median income—is already about 16 percent, the sixth worst among countries in the Organization for Economic Cooperation and Development. What worries Kingston is the rise of an insecure “precariat” in Japan, which he puts at 38 percent of the work force. “Growing disparities,” he added, “trample on egalitarian norms and values. Increasingly, Abenomics is seen to be welfare for the wealthy.”

The answer, Piketty suggests, is a fourth arrow: a plan to redistribute wealth. Abe wants to cut Japan’s 35percent corporate tax to further pad company profits. That would be grand for Toyota, which may earn more this fiscal year than the 11 other carmakers in Japan combined. Why not target the other end of the economy with tax incentives and stronger social safety nets? “I think, in Japan, it’s important to rebalance the tax system in favor of the young generation, who have a very difficult time to access property right now in Japan,” said the author of Capital in the Twenty-First Century. “Increasing the value-added tax, which is what Abe did, is not a very good way to reduce inequality in Japan.”

Piketty also favors raising taxes on rich Japanese, particularly beneficiaries of what he calls “patrimonial capitalism,” or heavily concentrated wealth passed down over generations. Abe also should slap a 10-percent to 20-percent levy on companies sitting on excessive cash piles. And why not use the bully pulpit to shame corporate Japan into sharing the wealth? If Toyoda and his ilk shared the record $2.3 trillion they held as of March 2014, Abenomics could be helping everyone.

I

annotations

like to propose something controversial: Let us forgive our president. People are not about to forgive President Aquino, or his sister, or his name. The President has dug his grave many times. Let us forgive him then. He spoke ill of priests before the highest of priests. In a country where a welcome means good words and good feelings, our president decided to be negative about relations of institutions in this country.

The president could have waited for the right time, when the esteemed visitor has left the land. That is not hypocrisy; that is the highest manner we can afford a man who had travelled all the way to this part of the world to condole with our countrymen whose land had been ravaged by a storm.

But let us forgive him for that lack of graciousness.

Then the president opted to attend the inauguration of a plant than wait for the return of the forty-four cops who perished in a battle that has been dubbed a misencounter.

Excuses have been given. Explanations have been offered.

But things can be forgiven.

The priorities are very clear, and that the president is for economic development. The Fallen 44 as they are called now are shades of gray for a government that is prone to invent events in black and in white.

There are talks of betrayals.

There are talks of subversion.

There are talks of US intervention.

There are talks of cluelessness even on the side of our strategy and intelligence.

There are talks of plots about bounty hunters.

We can declare all these interpretations as real. But in the end, there is the statistics of forty-four dead in a season of non-war. Unless we are declaring war in Mindanao.

The real war, however, is in our hearts and the heartof a president whose feelings we can never understand. It is also less saddening that the action of the president is a function of his heart than his mind. The heart can somewhat be forgiven but the mind that is of the president that is not rational is pathetic and mad.

But the again maybe he is not mad. Maybe this republic is just un-

Friday, February 6, 2015

lucky of its politicians. Or of sisters of politicians.

There are talks that Ms. Kris has unfriended or unfollowed some fellow movie celebrities because of their comments agains the president. Why am I happy about this development.

It is because if Kris unfriends everyone, or at least most of them, then we can gather a critical mass of enlightened showbiz denizens.

It is said that Kris Aquino and Aiai de las Alas have reconciled during their visit to the wake of the Fallen 44. That is good for them, but that does not bring any good to the issue that in the times of Peace, almost many government people perished in the land of Maguindanao.

The issue is not about two individuals reconciling but of people unable to reconcile the facts that out there, these forty-four PNP-SAF personnel died. Out there in Maguindanao where in 2009, some 58 perished due to election-related massacre.

The geography of murder prods us to ask what is in the land of Maguindanao that causes these killings? That question, however, is not correct. For every killing in that southern land, there are connections found in the violence and corruption committed in the capital.

The fall of the 44 cannot be removed from the ascent of arrogance and indiscretion in this land. For every absence of the president in a national event the counterpoint feeling is the presence of senseless death. For every death in our nation,

Industrial policy and the resurgence of the manufacturing sector Fernando T. Aldaba

EAGLE WATCH

I

N the last two years, industry and manufacturing have been the growth drivers of the Philippine economy (See Table). This is in contrast with the previous years where the services sector led the expansion of the economy. Colleagues from the Economics department call this trend a “manufacturing resurgence” as we see the sector managing to grow at very high levels of 7 percent to 10 percent coming from lower rates in the past years. But what has triggered this recent recovery in industry and manufacturing?

Sectoral Growth Rates 2011-2014 2011

2012

Agriculture, Forestry and Fishing

2.6

3.5

1.1

1.9

Industry

1.9

6.5

9.3

7.5

Manufacturing

4.7

5.4

10.3

8.1

Services

2.6

7.4

5.7

6.0

Gross Domestic Product

3.7

6.8

7.2

6.1

Source: Philippine Statistical Agency

2013 2014

Was it the implementation of an active industrial policy? More recently, the government has embarked on engaging the private sector in terms of identifying constraints in key sectors and industries of the economy. Then, it has worked jointly with industry leaders towards the resolution of some of these obstacles. The Department of Trade and Industry (DTI) spearheaded the formulation of various industrial roadmaps to catalyze expansion in these key sectors. This kind of collaboration has heightened expectations of private businesses in the industry and manufacturing sectors of a more conducive environment for their plans of growth and development.

Industrial policy in the more recent past became taboo among policy makers as multi-lateral institutions and mainstream economists frowned upon government’s intervention in selecting strategic industries and sectors to bolster the development of the economy. “The Washington Consensus,” the dominant paradigm then, advocated that free markets should determine which sectors would flourish and grow amidst global and local competition. But the result in many developing countries was not desirable—de-industrialization as many

manufacturing sectors became uncompetitive and unattractive to domestic and foreign investors.

But after the global financial crisis of 2008, the increasing relevance of industrial policy was “acknowledged by economists and political leaders from all sides of the political spectrum” according to Joseph Stiglitz and Justin Lin in a newly-published book Industrial Policy Revolution I. Both economists, former vice-presidents for research of the World Bank, are now advocates of a new industrial policy towards the structural transformation of many developing economies. The new industrial policy transcends “picking winners” but addresses constraints, coordination failure and externalities confronting the manufacturing sector.

In the Philippines from 2012, it was Norio Usui of the Asian Development Bank, Rafaelita Aldaba of the Philippine Institute for Development Studies and DTI’s Adrian Cristobal Jr. who spearheaded the promotion of industrial policy to reenergize the manufacturing sector and diversify the country’s drivers of economic growth. Of course, even before this renewal, Filipino economists like Manuel Montes of the South Center, nongovernment think tanks (e.g. Action for Economic Reforms) and trade

unions were already pushing for industrial policy as an important strategy for genuine development of the country as early as the 1990s.

But why was industrial policy avoided in the past by government policy makers? This is due to the recurring pitfalls in the strategy like wrong choice of sectors to support, vulnerabilities to rent seeking and lobbying from vested interest groups and the inability to withdraw support for failed projects and thereby wasting precious government resources.

However, other prominent economists held opposite views. For example, Montes saw industrial policy as the application of selective government intervention to favor certain sectors so that their expansion benefits the productivity of the economy as a whole through multiple spillover effects.

Dani Rodrik, meanwhile, viewed industrial policy as a strategic collaboration between the private sector and the government with the aim of identifying where the most significant obstacles (e.g. information constraints, economies of scale, coordination failure) to economic restructuring lie and the type of interventions most likely to remove them. For Stiglitz and Lin, industrial policy generates positive

A7

other deaths are recalled. In the case of the Fallen 44, the presidential sister comes armed with her own memories of loss.

It is said that when this sister grieved she related the loss of fortyfour to her loss of her father. There is no problem with this sharing of one’s grief but the style once more brings us back to that person’s propensity to focus on herself always. That is perhaps the painful side of her comments – the lack of comparability of deaths and the subsequent implications of the loss.

Remove the death of Ninoy and you remove the ascent of the Aquino clan. This is perhaps the sad lesson of that day in August 21. For some reason, the death of Cory Aquino has focused the political choice of people on the son who stood by her mother admirably.

Elixabeth Kubler-Ross, the foremost (I shiver at this label) authority on death) is quoted to have said: “I say to people who care for people who are dying, if you really love that person and want to help them, be with them when their end comes. Sit with them – you don’t even have to talk. You don’t have to do anything…”

The forty-four men are not dying; they are all dead. The president need not prepare a eulogy. He just needed to be there when their bodies were brought down from the plane. No words, no mention of one’s personal loss. Perhaps, a quiet salute is enough.

E-mail: titovaliente@yahoo.com

externalities and social rewards e.g. knowledge creation and technological upgrading.

The DTI recently declared that the automobile industry is at “the heart of the various industrial roadmaps” since the sector is characterized by having multiple linkages with the rest of the economy. Government support to this sector has been wanting for many years.

But, currently, the DTI has formulated a strategy for strengthening the industry.

This is the reason why President Aquino gave importance to the inauguration of the Mitsubishi plant.

In any case, many in the private sector have been eagerly awaiting the executive order spelling out government’s industrial policy on the automotive sector as this signals whether this administration is serious or not in pursuing industrial upgrading and structural transformation. Hopefully, this executive order will be out soon and will thus confirm government’s commitment to implement genuine industrial policy and to sustain the resurgence of the manufacturing sector.

Fernando T. Aldaba is a professor of Economics and a Senior Fellow of Eagle Watch, Ateneo de Manila University’s macroeconomic forecasting unit.

2nd Front Page BusinessMirror

A8 Friday, February 6, 2015

Value of seized pirated goods rose 70% in 2014

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By Catherine N. Pillas

he Intellectual Property Office of the Philippines (IPOPHL) reported a 70-percent spike in the value of seized counterfeit products in 2014, after the government intensified its drive to curtail the proliferation of fake goods in the market.

In a statement, IPOPHL Deputy Director General Allan B. Gepty the value of seized goods last year at P13.3 billion was the highest in the agency’s history.

In 2013 the IPOPHL reported

that the government seized some P7.86 billion worth of counterfeit items. In 2014 the IPOPHL and concerned state agencies visited a total of 15 establishments.

Five of them were inspected

Property. . . Continued from A1 “There are benefits to having large urban agglomerations, including concentrations of high-paying industries such as finance—which attract high-skill workers who can pay for expensive housing…. Research on

economic clusters also shows that companies in a cluster grow faster and are more profitable than those outside of a cluster…clusters also breed innovation,” it said.

McKinsey said policy-makers in

by virtue of visitorial order issued by the IPOPHL, whereby it was found that one establishment was using mislicensed software and establishments were selling counterfeit products.

Ten establishments were raided by virtue of inspection orders issued by the Optical Media Board that resulted in seizures of 16-anda-half sacks of pirated DVDs and CDs, including three sacks of pirated computer softwares.

The IPOPHL, Gepty said, is committed to its duties for the incoming year, sustaining the country’s removal from the Special 301 Watch List of the United States Trade Representatives Office in 2014.

Gepty emphasized that the country will continue to persevere in maintaining the steady progress in the government’s IP enforcement.

developing economies should keep this analysis in mind as they face choices of whether the country should develop one or more megacities—or encourage the growth of alternate urban centers in larger numbers.

GOVT LOOKING FOR NEW WAYS TO INCREASE SPENDING–ABAD

By Estrella Torres

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udget Secretary Florencio B. Abad said the Aquino administration is now looking for ways to ensure line government agencies would no longer underspend this year, a factor that contributed to the low growth in the gross domestic product (GDP) during the third quarter of last year.

He said the new measures to ensure underspending would no longer happen this year are being discussed in the Cabinet, in light of the Supreme Court’s (SC) decision on the Disbursement Acceleration Program (DAP).

The SC has affirmed its decision declaring DAP as unconstitutional, including the provisions that allowed the withdrawal of unobligated allotments from implementing agencies and their use as savings before the end of the fiscal year, as well as the transfers of savings of the Executive Department to augment funds outside of the Legislative Department.

The Court also upheld the unconstitutionality of the use of unprogrammed funds despite the absence See “Spending,” A2

www.businessmirror.com.ph

PSE convinces Catholic groups to invest in PHL

By VG Cabuag

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he Philippine Stock Exchange (PSE) on Thursday said it made a presentation on Philippine investment opportunities before the Christian Brothers Investment Services (CBIS), a leading prov ider of investment-manageme nt s e r v i c e s for C at hol i c institutions worldwide.

The operator of the country’s equity market said PSE Chairman Jose T. Pardo made the presentation in Rome during a road show it conducted late last month.

Pardo presented the economic climate and investment outlook in Asia and the Philippines, including the role of economic expansion in promoting inclusive growth, the PSE said.

“I am very pleased to have been given this opportunity to talk about investing in our country and in Asia before the religious community. It was an opportune time to tackle the growth prospects of the region and the Philippine stock market, especially as our index broke record levels in January,” Pardo said.

The congregational forum was attended by around 80 superior generals and treasurers from Catholic institutions that have expressed

PARDO: “The fact that we are now being invited to present in these forums shows that word of our strong economic and stock-market performance is reaching different parts of the globe. ”

interest in rebalancing their portfolio to include equities listed in Asia and the Asean.

Investors have also taken notice of the Philippines, given the recent record highs achieved by the market and the positive awareness on the country following the papal visit in January this year, the PSE said.

“The fact that we are now being invited to present in these forums shows that word of our strong economic and stock-market performance is reaching different parts of the globe,” Pardo said.

He added: “I believe a lot of companies in Asia and especially in the Philippines adhere to the faith-based investment strategy of CBIS even as we continue to promote good corporate governance among our listed companies.”