BusinessMirror February 19, 2015

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TfridayNovember 10 10 No.No. 40 Thursday, February18,19,2014 2015Vol.Vol. 133

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MALAMPAYA SHUTDOWN IN MARCH TO RESULT IN AT LEAST P1/KWH hike AS GAS PLANTS SHIFT TO LIQUID FUEL

Expect another power-rate increase PHL IS NOW 76TH FREEST T ECONOMY

By Lenie Lectura

he 30-day shutdown of the Malampaya naturalgas facility will definitely increase power rates by at least P1 per kilowatt-hour (kWh), a group of power producers and the country’s largest distribution utility firm said on Wednesday.

“I guarantee that there will be a spike, because that happens whenever Malampaya shuts down,” said Luis Miguel Aboitiz, president of the Philippine Independent Power Producers Association Inc. (Pippa), during a discussion organized by GE Philippines.

The Malampaya gas facility, which currently pro-

vides over 40 percent of the country’s energy needs, will undergo a maintenance shutdown from March 15 to April 14.

The Luzon grid is dependent on Malampaya, as it fuels three power plants: Santa Rita 1,000 megawatts; San Lorenzo, 500 MW; and Ilijan, 1,200 MW. The Santa Continued on A2

LAO PDR HONORS A.L.C.

Ambassador Antonio L. Cabangon Chua receives a certificate of appreciation from Ambassador Malayvieng Sakonhninhom of the Lao People’s Democratic Republic (Lao PDR) for his efforts to promote closer relations between Lao PDR and the Philippines. The Lao PDR ambassador paid a courtesy call to bid farewell at the close of her tour of duty in the Philippines, which began in February 2011. Ambassador Cabangon Chua had served as the country’s representative to Laos and is now the chairman of the PhilippinesLaos Business Council, which promotes increased business and trade relations between the two countries.

PESO exchange rates n US 44.2790

By Bianca Cuaresma

T

APEC MOBILITY PARTNERSHIP Toyota Motor Philippines (TMP) will serve as the private-sector partner that will provide transport services to attendees of the Asia-Pacific Economic Cooperation (Apec) CEO Summit. Signing the memorandum of agreement were (seated, from left) TMP President Michinobu Sugata, TMP Vice Chairman Alfred Ty, Cabinet Secretary Jose Rene Almendras, Apec 2015 CEO Summit CEO Guillermo Luz and Apec Private Sector Council Chairman Jaime Augusto Zobel de Ayala. Standing as witnesses are (from left) TMP Marketing Senior Vice President Jose Ariel Arias, TMP Marketing Executive Vice President Yohei Murase and TMP Marketing First Vice President Raymond Rodriguez.

Govt considering MVP’s unsolicited MRT proposal

By Lorenz S. Marasigan

D

ESPITE its apparent distaste for unsolicited proposals, the Aquino administration will still evaluate the multimillion-dollar proposal of conglomerate Metro Pacific Investments Corp. (MPIC) to upgrade the Metro Rail Transit (MRT) Line 3, a Cabinet official said.

The holding company of Manuel V. Pangilinan’s business empire submitted last week its $524-million offer to overhaul the most congested train line in Metro Manila. It is now being reviewed by both legal and technical experts from the Department of Transportation and Communications (DOTC).

“It’s a thick document, and our guys from legal and technical are currently digesting the proposal. Basically, the offer carries what they announced to the public,” Transportation Secretary Joseph Emilio A. Abaya said in an interview.

The infrastructure giant, which has interests in power, toll roads, water and health care, proposed to defray the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity-rental payments.

The group intends to spend $524 million to overhaul the line and improve the train line’s poor services.

The venture aims to expand See “MRT,” A2

Hike in US output to end oil rise

he Philippines received higher marks in latest exercises ranking countries around the world in terms of the economic freedom their citizens enjoy, according to The Heritage Foundation, a research institute on public policy based in Washington, D.C. Foundation officials visited the country, and announced the upgrade as the 76th freest economy in the world, with the score of 62.2 points.

This represented a 2.1-point improvement from the previous year.

The Heritage Foundation defined economic freedom as a “fundamental right of every human to control his or her own labor and property. In an economically free society, individuals are free to work, produce, consume and invest in any way they please.” The foundation also said that, in economically free societies, governments allow labor, capital and goods to move freely, and refrain from coercion or constraint of liberty beyond the extent necessary to protect and maintain liberty itself.

INSIDE

T

he rebound in oil will reverse because rising US production is deepening the global supply glut, according to UBS AG, Bank of America Corp. and Commerzbank AG. Brent futures entered a bull market this month, as US drillers stopped using a record number of rigs, companies cut at least $40 billion from spending plans and hedge funds turned the most bullish in seven months. None of that will stop Brent slipping back to $45 a barrel or lower within the next three months, from about $61 now, the banks’ analysts say. Prices fell as low as $45.19 on January 13. Bloomberg News

n japan 0.3712 n UK 67.9860 n HK 5.7081 n CHINA 7.0863 n singapore 32.6613 n australia 34.4262 n EU 50.5401 n SAUDI arabia 11.8036 Source: BSP (18 February 2015)

News

BusinessMirror

Thursday, February 19, 2015

A2

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Expect another power-rate increase This was echoed by Meralco Vice President and Head of Utility Economics Lawrence Fernandez, who said the rate hike “of about P1 per kWh depends on the prices of fuel during that period.”

“So that’s during the March-toApril supply period that will be reflected in the April to May billing periods,” Fernandez, who was referring to the implementation of the higher power rates, said.

GE Philippines CEO Jose Emmanuel de Dios said cheaper oil

Continued from A1

Rita and San Lorenzo power plants are owned by Lopez-led First Gen Corp., while Ilijan is owned by Kepco Philippines. They will have to shift to liquid fuel to fire up their power plants during the 30-day period.

“Once the gas plants shift to liquid fuel, there’s around P1-per-kWh automatic increase,” said Aboitiz, who was referring to a spike in generation charge, the largest component of an electricity bill.

MRT. . .

prices could also temper power-rate increases. However, Aboitiz was quick to point out that it won’t help much because “about one-fourth of last year’s spike came from the shift to liquid fuel alone.”

“The moment these gas plants use liquid fuel, there’s automatically around P1-per-kWh increase. That’s excluding increases in WESM [Wholesale Electricity Spot Market] and other charges,” Aboitiz stressed.

A Meralco bill is composed of the following charges: generation,

distribution, transmission, taxes, system loss and lifeline subsidy.

But Pippa is hopeful that the market cap imposed by the Energy Regulatory Commission (ERC) will help temper a rate hike.

“But it won’t be as bad [as 2013] because we’ve got a lower primary cap at the WESM and a secondary cap,” Aboitiz said.

The ERC has put in place a secondary price cap of P6.245 per kWh once the P9-per-kWh threshold was breached.

Continued from A1

the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimillion-dollar expansion plan, hence, will double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.

It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal.

“We’re studying it,” the Cabinet official assured,

but noted that his office is not too keen on accepting the unsolicited proposal.

“Honestly, we’ve seen that we are much better off with open, transparent and competitive bids. Once we entertain this, complaints would sprout out, asking why we entertain such an unsolicited proposal while we are championing open and transparent bids,” Abaya explained.

However, as per the legal division of his agency

explained, the transport chief said an amendment to the build-lease-transfer agreement with the MRT Corp., the owner of the train system, is still possible.

“Provided that it is not substantial—the amendment—neither would it disadvantage the government,” he said. “We have to comply with these two conditions.” But the proposal of the private sector to improve the line involves a substantial amendment to the MRT contract.

3-DAY EXTENDED FORECAST FEBRUARY 19, 2015 | THURSDAY

TODAY’S WEATHER

FEB 20 FRIDAY

FEB 21 SATURDAY

METRO MANILA

23 – 31°C

22 – 31°C

TUGUEGARAO

20 – 29°C

20 – 28°C

FEB 22 SUNDAY

LAOAG

LAOAG CITY 21 – 30°C

FEB 21 SATURDAY

FEB 22 SUNDAY

22 – 30°C

METRO CEBU

24 – 31°C

24 – 32°C

24 – 32°C

20 – 28°C

TACLOBAN

21 – 29°C

22 – 30°C

22 – 31°C

20 – 29°C

CAGAYAN DE ORO

SBMA/CLARK 22 – 30°C METRO MANILA 23 – 31°C

TAGAYTAY CITY 20 – 29°C

20 – 30°C

20 – 29°C

23 – 31°C

22 – 30°C

23 – 31°C

22 – 32°C

23 – 32°C

23 – 32°C

23 – 32°C

23 – 32°C

23 – 33°C

MOONRISE

BAGUIO

14 – 23°C

14 – 22°C

14 – 22°C

METRO DAVAO

SBMA/ CLARK

23 – 31°C

22 – 31°C

22 – 30°C

ZAMBOANGA

TUGUEGARAO CITY 21 – 29°C

BAGUIO CITY 15 – 23°C

TAGAYTAY

20 – 29°C

19 – 29°C

LEGAZPI ILOILO/ BACOLOD 23 – 30°C METRO CEBU 24 – 30°C

TACLOBAN CITY 21 – 30°C

CAGAYAN DE ORO CITY 22– 30°C

ZAMBOANGA CITY 22 – 33°C

23 – 30°C

23 – 29°C

23 – 30°C

SUNSET

MOONSET

6:19 AM

6:01 PM

6:22 PM

NEW MOON HALF MOON

23 – 31°C

23 – 32°C

23 – 32°C

ILOILO/ BACOLOD

24 – 30°C

24 – 31°C

24 – 31°C

7:47 AM

CELEBES SEA

LOW TIDEMANILA HIGH TIDE

FEB 26

5:26 AM

-0.15 METER 1:14 AM Partly cloudy to at times cloudy with rain showers and/or thunderstorms Partly cloudy to at times cloudy with rainshowers

Cloudy skies with rain showers Cloudy to at times cloudy with rain showers and/or thunderstorms

Weekday hourly updates: 6:00 AM on Balitaan, 7:00 AM & 8:00 AM on Good Morning Boss!, 9:00 AM, 10:00 AM, 11:00 AM, 12:00 PM, 1:00 PM on News@1, 3:00 PM, 4:30 PM, and 6:00 PM on News@6

www.panahon.tv

SABAH

6:11 AM

SOUTH HARBOR

FEB 19

PUERTO PRINCESA

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

METRO DAVAO 22 – 31°C

SUNRISE 19 – 28°C

LEGAZPI CITY 24 – 29°C

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

FEB 20 FRIDAY

TAIL-END OF A COLD FRONT AFFECTING EASTERN SECTION OF NORTHERN LUZON. (AS OF FEBRUARY 18, 5:00 PM)

Tail-end of a cold front is the extended part of the boundary, which happens when the cold air and warm air meet. This may bring rainfall and cloudiness over affected areas. It is felt at the northern hemisphere winter season.

PUERTO PRINCESA CITY 22 – 31°C

3-DAY EXTENDED FORECAST

@PanahonTV

10:32 PM

1.13 METER

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The Nation BusinessMirror

Editor: Dionisio L. Pelayo • Thursday, February 19, 2015 A3

Palace: No need to convene NSC

By Butch Fernandez & Recto Mercene

M General orders arrest of coup recruiters

By Rene Acosta

A

SENIOR military officer ordered his subordinates on Wednesday to arrest any individual who tries to recruit them for a coup or any destabilization atttempt. Maj. Gen. Ricardo Visaya, Armed Forces Southern Luzon Command chief, said that his order covers even senior officers.

“If anybody enters our operational jurisdiction to recruit for a coup, my order for the soldiers is to arrest him so that he could no longer recruit,” Visaya said.

He said soldiers should also arrest their commanders or any of their senior officers if they recruit

for a coup attempt.

Talks about a brewing coup circulated in the aftermath of the killing of 44 police commandos in Mamasapano, Maguindanao, by members of the Moro Islamic Liberation Front and Bangsamoro Islamic Freedom Fighters.

Visaya said any recruiter for the reported coup should stay away from his operational areas, otherwise the individual will end up in jail. “Regardless of his status, he will be arrested.

Nobody is above the law,” he said.

At the same time, Visaya also warned soldiers against joining the coup, because they would certainly be prosecuted and will be discharged from the service.

ALACAÑANG is not alarmed enough to convene the National Security Council (NSC), amid apprehension over circulating text messages about looming security threats purportedly triggered by growing dissatisfaction over the Aquino administration’s mishandling of the police operation that led to the massacre of 44 Special Action Force (SAF) commandos in Mamasapano.

Still, the Palace aired an appeal on Wednesday for the public to remain calm and not give credence to anonymous text messages about certain threats to their security, assuring that the National Police and the Armed Forces are closely monitoring the security situation.

Palace Communications Secretary Herminio B. Coloma Jr. said, “Tinututukan ng National Police nang masinsin ang sitwasyong pangseguridad, at tinitiyak na handang pangalagaan ang kaligtasan ng mga mamamayan. Hindi makakatulong ang pagpapakalat pa ng mga ganitong uri ng text messages na walang batayan.”

Coloma told Palace reporters at a briefing that the Cabinet has not discussed any plan to convene the NSC just yet.

“Wala pang napag-uusapan sa hanay ng Gabinete. Wala pa akong natatanggap na impormasyon mula sa Pangulo hinggil diyan sa ideya ng National Security Council [meeting], sapagkat patuloy din naman ang pakikipagkonsulta ng Pangulo sa mga lider ng bansa kahit na walang pagpupulong na katulad niyan,” he said.

Coloma added that, in lieu of the NSC, President Aquino regularly consults his Cabinet Security Cluster, which includes the secretaries of

National Defense and Interior and Local Government, the Armed Forces chief of staff and National Security Adviser Cesar Garcia, among others.

Asked about Vice President Jejomar Binay’s suggestion to convene the NSC to assess the security situation and come up with measures to allay public concerns in the face of reports of an imminent resumption of hostilities between government forces and Moro rebels in Mindanao, the Palace official recalled that the Moro Islamic Liberation Front has signed an agreement with the government to help maintain peace in Mindanao.

“Pansinin lang natin na umiiral pa rin iyong Framework Agreement on the Bangsamoro [FAB] at iyong Comprehensive Agreement of the Bangsamoro [CAB]. May mga prinsipyo doon na nilagdaan at pinapanindigan ng magkabilang panig, at kasama diyan iyong pananatili ng tigil putukan, iyong pagpapairal ng kapayapaan at seguridad. Kaya iyan ang dapat na maging batayan kung ang magkabilang panig ba ay tumatalima diyan dahil hindi naman dapat naapektuhan ng mga mas recent na developments iyong mga probisyon ng mga kasunduang iyan,” he said.

Binay called on the President to convene the NSC to assess the national peace and security situation, and define appropriate measures.

“In light of recent developments especially the reports of renewed clashes in Mindanao, I urge President

Aquino to convene the National Security Council,” Binay said.

“The meeting will assess the current peace and order and security situation, and formulate the proper mechanisms that would prepare our law enforcement and the armed forces to respond accordingly,” he added.

Binay said that in view of the escalating conflicts in Mindanao, it is important to be prepared for any eventuality.

“We need to be prepared. We have to discuss not only what’s happening now but how to be ready for the future. We need to invite persons who possess knowledge and experience on matters pertaining to national security,” he said.

“The NSC meeting will provide our security forces the framework to act, keeping in mind that our ultimate goal is to ensure stability and pursue peace in Mindanao,” he added.

The NSC is composed of the President, the Vice President, the Armed Forces of the Philippines chief of staff, the National Security Council director, the executive secretary, and the secretaries of foreign affairs, of national defense, of the interior and local government, of justice and oflabor and employment.

Barely a month after the failed police ra id in Mamasapano, Maguindanao, gunfire once again rattled the province after members of the Moro Islamic Liberation Front and the Bangsamoro Islamic Freedom Fighters clashed on Saturday.

A BusinessMirro

A4 A14 www.businessmirror.com.ph

Suntrust Kirana: A beautif P

 J V B. D B

EOPLE who work in the central business districts (CBD) but live in farther areas often spend more time in a traffic jam than with their families. The stress caused by waiting on the road in addition to the rising cost of fuel are enough reasons to be convinced that finding a home right in the city is the practical way to go.

However, a home proximate to these business centers can be pricey. And if cost was not the issue, then it is the quality of lifestyle that can be compromised as one

settles for a space that, although located at the city, offers little to no comfort.

With these in mind, Suntrust Properties Inc (SPI), a wholly-owned subsidiary of Megaworld Corporation and a brand catering to the affordable market, brings a beautiful ray of light to shine at the center of Pasig City — Suntrust Kirana.

Suntrust Kirana is a 7,083sq.m midrise development along U. Velasco Avenue near the Pasig City hall, set to be in full swing in three years’ time. As a low density condominium with two 10-storey and

one 11-storey towers, it will offer only a total of 593 units with an average size of 30 sq.m per unit.

“We want to keep the place exclusive.

We want to invest on the quality of lifestyle that we will offer our residents,” says Suntrust’s president Atty. Harrison M. Paltongan.

Light in an Eco-city

PASIG City is gradually redeeming itself from its reputation of being a flood-prone area. With the restructured drainage systems and the local government’s greeninspired initiatives, it is slowly being

transformed into an emerging Eco-city.

And as Suntrust Kirana soon rises from this capital, all the more will Pasig City become the newest ideal location for finding comfort in the city life.

“The main reason we situated the property in Pasig is because a lot of condominium developments are going nearer the CBDs - Ortigas, Makati and Bonifacio Global City (BGC). Pasig is very near these three CBDs, and therefore is accessible to more work places,” mentions Atty. Paltongan.

Aside from key business districts, Suntrust Kirana’s location is also accessible

to other immediate needs: malls, schools, hospitals, churches, among others.

Another unique feature of this upcoming condominium development is the magnificent scenery that can be seen from each unit.

“Unlike other cities, Pasig doesn’t have much skyscrapers yet,” says Paltongan.

“That means if you live in an elevated place, you can have a view of whichever cardinal direction you want. If you avail of a unit from Suntrust Kirana, you may choose which scenery you would want to see every time you wake up – like the lake and the mountains, or perhaps a great view

ror Special Feature

Monday, July19, 15,2015 2013 A15 A5 Thursday, February

ful ray of light in Pasig City of the nearby city skylines. Residents can freely choose which view they want, and it is also given that all units have balconies.”

Energy-efficient units and resort-like amenities

H AV IN G a name taken from an Indonesian word which means “beautiful ray of light”, Kirana is a property being developed with the energy-efficient Modern Asian concept - indeed a ray of light contributing to a city that is shining brighter and brighter.

Paltongan explains that modern methods will be used for the facilities while still holding faithful to the Asian

concept. “That means the units will have wide windows and wide hallways for natural light to come in; the ventilation system will also be a priority so that residents wouldn’t have to use their aircon units the whole day. With these features, each unit will become more sustainable in energy,” he states.

In addition, the three towers will be surrounded by green landscapes and paved sidewalks that will encourage residents to take leisurely strolls inside the property and consequently promoting a healthier lifestyle.

Residents will also enjoy the resort-

like amenities of Suntrust Kirana which include a clubhouse, swimming pool, a play area, and a retail space that will be occupied by laundry shops, beauty salons, grocery stores and restaurants. A two-level podium parking for the residents will also answer to the residents’ car garage problems.

Furthermore, the courtyard structure of the three towers also mute, if not totally eliminate, the noise and pollution from the outside.

Affordable luxury

GIVEN the amenities and features that

can be enjoyed in this new condominium community, it is typical to assume that it comes with a high price.

“With the location and the kind of features that Kirana offers, it’s common to assume that it will be very expensive.

But because the Suntrust brand caters to the affordable market, we are offering all these for almost 60% less the cost of other condominium developments in the area,” Paltongan says.

He further highlights that Suntrust Kirana c an comp e te w ith many condominium projects that offer firstclass amenities. “You upgrade your

lifestyle at a cost within your reach and you get to save also in all other expenses.

We are not much for the profit, as we are for the quality of service that we give our home owners. This is the legacy we want to be known for pursuant to our vision to be the yardstick in our industry.”

And with this promise of shining bright from the light of Kirana, Suntrust Properties, Inc. is definitely on that route.

Suntrust is also inviting topnotch sales professionals to join its rapidly expanding team. Interested applicants may call 8567015 to 19 or visit www.suntrust.com.ph.

*For Announcement Purposes Only

Opinion BusinessMirror

A6 Thursday, February 19, 2015

editorial

Watch your systems

T

HE bank heists today are no longer done just at gunpoint. They are done with code.

It began with money mysteriously disappearing from automated teller machine (ATM) accounts in Russia, the United States, Germany, China, Ukraine, Canada, Hong Kong, Taiwan, Romania, France, Spain, Norway, India, the United Kingdom, Poland, Pakistan, Nepal, Morocco, Iceland, Ireland, Czech Republic, Switzerland, Brazil, Bulgaria and Australia.

Up to $1 billion were taken from a hundred financial institutions spread across these territories. It took the combined efforts of antivirus software makers, the Interpol, the Europol and authorities in the affected areas to uncover the great cyber-robbery committed by the Carbanak gang, a band of cybercriminals from Russia, China, the Ukraine and other parts of Europe.

The attacks were targeted and this plot is but the beginning of a new stage in the evolution of cybercrime in which criminals steal money directly from banks themselves and avoid targeting end-users. Worse, the attacks remain active, according to reports.

The Philippines is, thankfully, not on that list. Not yet.

The banks, as a rule, secure their transactions with laudable thoroughness and support from the Bangko Sentral ng Pilipinas (BSP). Yet simple errors in ATM account data still occur. So how about the security of remittance and non-bank payment facilities? And who will watch over these non-bank moneyremittance services?

These attacks targeted the bank systems rather than the depositor accounts, Securelist said. “Once the attackers successfully compromise the victim´s network, the primary internal destinations are money processing services, ATM and financial accounts.”

The cybercriminals used online banking and money transfer technology to put their pillage in their bank accounts. They manipulated databases to open payment or debit cards at the same banks. They used ATM networks to dispense cash to waiting money mules. They bloated regular depositor accounts and withdrew the difference—robbing the bank but not the depositor.

In a world made smaller and easier to navigate with technology, crime happens faster, too. Let this be a cautionary tale to business in the Philippines that deal with cash transactions: Watch your systems.

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John Mangun

OUTSIDE THE BOX

T

HE Philippine Senate recently held hearings on the quality provided by the major telecommunications companies regarding their Internet service. The US government is ready to announce new rules broadly under the title of “Net-Neutrality.”

Access to the Internet has become so much an integral part of everyday life for many people, that we have begun to take it for granted and almost assume that it is “just there” rather than being a provided service.

In the early 20th century, people were amazed that the wonders of electricity could be brought inside their own homes and businesses.

Yet the Internet is the most complex system ever devised by humans and continues to evolve on a daily basis. While a relatively new creation, many people are ignorant about the “Net.” Sixty percent of mobile phones users who access Facebook daily did not know that they were first accessing the Internet to reach Facebook. We have come to expect Internet access to be there when we want it and the way that we want it. But realize that only 40 percent of the world’s population has In-

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ternet access up from 16 percent as recently as 2005.

In the developed world, the idea has evolved that Internet access is a ‘human right’ which is absurd when compared to genuine rights like life and liberty. But government, in its quest for more power and control, would like people to believe that it is the government that gives ‘rights’.

The latest in the government pursuit for more power comes under “Net Neutrality” (NN). It seems like an appealing and favorable concept. NN says that Internet Service Providers (ISP) should not have the legal right to limit individual Internet usage either in amount or content. The parallel is drawn with electricity. If you want to run 10 air conditioners, that is your privilege as long as you pay for the amount of electricity you use. The companies that generate

Japan Inc. gets moving

Judge Pedro T. Santiago (Ret.) Benjamin V. Ramos Adebelo D. Gasmin Frederick M. Alegre Marvin Nisperos Estigoy Aldwin Maralit Tolosa Rolando M. Manangan

BusinessMirror is published daily by the Philippine Business Daily Mirror

HOM

Net neutrality: Are you sure you want this?

William Pesek

BLOOMBERG VIEW

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HIGEHISA Takada personifies all that’s wrong with corporate Japan. The Takata chairman has adopted a familiar response to the deadly airbag scandal that’s enveloped his 82-year-old company: duck and cover. As the costs of recalling tens of millions of airbags mount—they’re likely to reach $264 million in the year ending in March—Takata has remained out of sight, leaving underlings and lawyers to face the news media and testify before the US Congress.

Something extraordinary just took place within the clubby ranks of Japan Inc., however: Someone had the gumption to tell Takada the jig was up. Not just anyone, but Honda’s respected Chief Executive Officer Takanobu Ito. In December, local press speculated that Honda, Takata’s biggest customer, would provide a financial lifeline to the embattled airbag-maker. Ito now says Honda intends to do no such thing: “We have no interest” in keeping Takata afloat, he told reporters at the end of last week.

While that would sound unremarkable coming from a CEO in Detroit, Ito’s tough message is revolutionary for Japan. It’s a promising sign that the Japanese corporate sector may finally be modernizing from within. That should both cheer Prime Minister Shinzo Abe—who

has called upon Japanese companies to improve their governance—and inspire him to give his stalled Abenomics reform program a serious reboot.

In recent years, Honda’s Ito has mounted a one-man assault on Japan’s traditional “keiretsu” system of closeknit business networks. From the 1960s through the 1990s, these interlinking interests, cemented by cross-shareholdings of stock, fueled Japan’s dominance in sectors like autos. But they’ve left the country deeply uncompetitive. In 2012, Ito began dismantling Honda’s relationships with high-cost and complacent domestic suppliers in favor of low-cost ones overseas.

Companies like Daihatsu have begun to follow suit. Last month, Reuters ran a fascinating story about how Japan’s

and distribute electricity cannot tell you how to use your purchased electricity.

Likewise, ISPs should not be able to limit personal bandwidth usage whether you access once a day to check emails, or are continuously downloading YouTube videos assuming that both customers are on the same subscription plan. That would seem to make sense.

But once government steps into closely regulating the free market transactions between business and client, great risks emerge.

The Internet is about the marketplace aspect of the communications system itself and about content.

Another parallel is made between the Net and cable television. NN proponents say that the Internet should be more like cable TV with open access to all both in terms of no discrimination between heavier and lighter users and content availability.

Proponents claim that ISPs seek to impose a tiered service model in order to control the pipeline and oblige subscribers to buy their otherwise uncompetitive services.

But Cable TV does discriminate and it is the customer that creates the ‘discrimination’.

SKY Cable Corp., which dominates cable TV in Metro Manila, offers 11 basic subscription plans ranging from P299 to P1,999. Further, there are also 113 ‘add-on packs’ you

can buy for Korean TV, sports, kids, and High-Definition. But NN proponents also say that ISPs charging differentially by user, content, site, or mode of communication is wrong and government needs to step in.

So which of the 11 subscriptions plans and add-ons is the government going to consider ‘fair’ for me to buy if all I ever watch—and want to watch—is Sponge Bob cartoons and “Aquino & Abunda Tonight”?

The same applies to the Internet.

Further. It is a very small step between the government providing so-called NN and the government controlling content. Ask Chinese Internet users about that problem.

There is a need for government to provide limited controlling regulation. However, should this regulation extend to what the ISPs provide in terms of their products and pricing and even their service? Notice what a great job the PHL government has done with controlling power generation, the airports, and the Philippine National Railways. Are we sure that we want to also hand over the Internet to the government?

oldest carmaker had also decided to focus more on costs than on preserving backroom relationships. Even more intriguingly, former Daihatsu chairman Kosuke Shiramizu claimed that Akio Toyoda, Toyota’s CEO, was “carefully aware of what we’re doing.” For giant Toyota to revamp its traditional supplier network in the interests of efficiency would mark a sea change in how Japanese manufacturers operate.

These aren’t the only hints of change. Japanese companies are notoriously resistant to shareholder complaints, particularly from foreigners.

Olympus shareholders, remember, were more aghast by the fact that whistleblower Michael Woodford had gone public with a $1.7 billion fraud scandal at the company in 2011 than the crime itself. Sony recently fended off pressure from activist investor Daniel Loeb to buy back stock and address what he claimed was an “illogical capital structure” that did nothing to increase shareholder value.

Loeb is back now, acquiring a stake in Fanuc, the world’s largest maker of automation equipment, and pressing the company to deploy its $8.5 billion cash pile rather than sitting on it. While the company might deny acting under pressure, President Yoshiharu Inaba has announced plans to invest more than $1 billion in new plants and research-anddevelopment facilities. Fanuc is Japan’s 10th-biggest company by market capitalization; its actions send a powerful signal to peers.

Finally, even Japan’s stuffy Keidanren business federation appears to be responding to Abe’s calls to promote more women to top positions. Just last week, the Wall Street Journal ran a story headlined, “Leaders at Business Lobby Keidanren Remain All Male, All Over 60.” Now the group has named its first woman—Haruno Yoshida, president of BT Japan—to its board. The move follows decisions by Daiwa Securities and Sumitomo Mitsui Bank also to appoint their first female board members, and by Lexus to name its first female engineer.

These are small steps, to be sure. But change in Japan is increasingly driven by bold action from outliers within the private sector. The success of Fast Retailing’s Uniqlo stores around the world inspired Abe to prod other companies to grow their overseas markets (and begin using English more). Entrepreneurs like Hiroshi Mikitani of e-commerce giant Rakuten are backing startup companies and lobbying the government to do the same. SoftBank’s Masayoshi Son used a $200 million investment to shame Tokyo into focusing more on renewable energy, with some success.

As Japan’s docile media shies away from speaking truth to power, corporate chieftains can—and should—play a greater role in setting Abe’s priorities.

So far the government’s reform program has had limited success, as evidenced by the disappointing 2.2 percent annualized growth rate in the fourth quarter.

If Abe is looking for inspiration, it’s all around him.

E-mail me at mangun@gmail.com.

Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Invited to God’s goodness

Islamic state’s appeal in Libya

Msgr. Sabino A. Vengco Jr. Noah Feldman

BLOOMBERG

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Y last column explained the dangerous game of chicken Saudi Arabia is playing with other major oil producers, including US frackers, to see who can withstand low oil prices the longest before slashing production. That price may be as low as $10 to $20 a barrel, or even lower. Now let’s look at how things might shake out.

Start with the winners from the faceoff, which include the US in general—the country still imports more than a quarter of its energy needs— and American consumers in particular. The 40 percent drop in gasoline prices from their recent peak of $3.70 a gallon in April 2014 has given drivers about a 1.7 percent boost in purchasing power. So far, most of that has been saved, though consumers probably will increase their spending if oil prices stay low.

Perhaps no industry is more sensitive to oil prices than airlines, since fuel is their largest single cost. Senior officials at American Airlines, United Continental and Delta say the halving of fuel costs will go straight to the bottom line to benefit stockholders and provide funding for stock buybacks.

Southwest plans to accelerate its growth if fuel costs remain low. Shares of the major carriers have surged since October. However, airline passengers, not stockholders, will probably be the final winners because of the tight correlation between fuel prices and fares.

Japan and other Asian energy importers also will benefit from lower prices. So will importers in Western Europe as well as Turkey, Pakistan, Egypt and India. Nevertheless, oil is priced in dollars, and the weakening of most currencies against the greenback offsets some of the effects of dropping crude prices. Also, amid falling energy prices, Japan has raised auto-fuel taxes so pump prices are down only 15 percent there. Brazil, meanwhile, has used declining energy prices as an opening to cut fuel subsidies and raise taxes.

China imports about 60 percent of the 9.6 million barrels it uses each day, but falling oil and other commodity prices harm that country’s energy, mining and metals-processing businesses as capital spending is slashed.

Losers from falling oil prices obviously include US producers and oil-services companies, especially those that took on large amounts of high-yield debt during the oil-price boom. Energy companies account for 17 percent of the junk bonds outstanding, and the securities are leading the way down as prices fall, yields rise and spreads widen versus Treasuries. Only $13.4 billion in junk bonds was issued in January compared with $22.7 billion a year earlier.

Oil and gas-related capital spending accounts for just 1 percent of US gross domestic product, but the industry already is cutting costs. Employment in the US oil and gas industry leaped 29 percent from the end of the recession in 2009, more than triple the overall job gain of 8.6 percent. The industry retrenchment will be painful.

Shares of exploration and production companies are down about 40 percent since last summer, while the energy giants—Royal Dutch Shell,

Exxon Mobil, Chevron and BP—are down by about a quarter. Their production and exploration costs are low, in the $20 to $30 a barrel range, and the refining and distribution arms of these integrated outfits benefit from cheap crude. They also tend to have time horizons of 20 years or longer for capital projects. Still, they’re all cutting spending to preserve cash flows and dividend payments, which suggest they think low oil prices will be around for a long time. BP Chief Executive Officer Robert Dudley said recently that US shale-oil production and low oil prices are a structural shift that is forcing him to “reset the whole cost basis of the company.”

Among the hardest hit are those nations that rely on oil for much of their government revenue and were in financial trouble before prices plunged.

Venezuela along with its state-run oil company issued more debt than any developing country between 2007 and 2011. Venezuela has been downgraded to the bottom of the junk pile—CCC

by Fitch—and credit-default swaps on Venezuelan debt recently indicated a 61 percent chance of default in the next year and 90 percent in the next five years. The nosedive in oil prices also is devastating African exporters Ghana, Angola and Nigeria, where oil finances 70 percent of the government’s budget.

Another country in trouble is Russia, where Western sanctions over Ukraine and tumbling oil prices are threatening it with a rerun of its 1998 default. The ruble swooned 43 percent in 2014 and sanctions prevent Russian banks from borrowing abroad to service their foreign debts. The Russian central bank jacked up interest rates to 17 percent to fight inflation, now running at 15 percent, but then had to cut them to 15 percent to try and prevent a deep recession.

On balance, energy consumers win and energy producers and exporting countries lose. Yet two important questions remain. Will energy-driven deflation, now in evidence in almost half of the 34 major developed countries, spread to prices in general? If so, will that encourage potential buyers to wait for still-lower prices in a selfreinforcing spiral that spawns more deflation and slow, if any, economic growth? In today’s world, with so many weak and troubled economies, general and chronic deflation is likely.

Second, will the fallout from deleveraging in the energy industry worldwide spawn a major shock and global recession that shifts the investment climate from “risk on” to “risk off”? As with the financial excesses revealed by the housing collapse, there’s probably much higher leverage among energyrelated companies and countries than is now apparent. As Warren Buffett once said, you don’t know who’s swimming naked until the tide goes out.

Alálaong Bagá

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OD’S love and compassion have always been there for the poor and the humble and those asking for His guidance and wisdom (Psalm 25:4-5, 6-7, 8-9). Jesus, guided by the Spirit in the desert and tempted by Satan, proclaimed the coming of God’s kingdom and the need for repentance and faith in the gospel (Mark 1:12-15).

Lord, teach me your ways PSALM 25 begins with a prayer for God’s guidance, begging to be taught of His ways and paths. They refer to the style of life in accord with the divine will, or the manner of living God teaches humankind to aim at as the way to salvation. It is the way of truth and righteousness which the psalmist is confident God will teach him because God is his savior, his deliverer. Down God’s paths, salvation is accomplished. And to be taught God’s saving ways, the psalmist appeals to God’s covenantal commitment of old: His tender compassion (rahum, deep and loving attachment as between a mother and the child of her womb) and His loyal kindness (hesed).

The psalmist asks to be remembered in this context of God’s goodness. For it is because God is good and upright that He shows sinners the path to salvation. Similarly, it is

because God is compassionate and kind that He guides the poor and humble ones (anawim) to justice and teach them His ways. And what is man’s response to such saving graciousness of God? Like the psalmist we should long to be taught God’s ways and to walk along God’s paths of love and truth, and thus be faithful to His covenant.

Jesus in the desert

IN God’s mighty Spirit, Jesus was led out into the desert. In the same power of God, individuals have been taken from obscurity and made prophets of God, and kings have been enabled to lead the people.

God’s Spirit drove Jesus into the wilderness, the place of dangers and conflict, where wild animals and social rejects are found; it is the place of trial where God’s people time and again failed the test. Jesus remained in the desert forty days, just as

Naked assessment Atty. Filamer D. Miguel

Tax law for business

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AKEDNESS is everywhere, literally or figuratively that is. To illustrate a few, the Philippine Senate is currently preoccupied with finding out the ‘naked truth’ in what really transpired in the Mamapasapano incident that resulted in the untimely demise of the forty-four brave Special Action Forces (SAF) of the Philippine National Police in the hands of the Moro Islamic Liberation Front (MILF) and Bangsamoro Islamic Freedom Fighters (BIFF). Likewise, the box office adult film Fifty Shades of Grey starring Anastasia Steel and Christian Grey, no doubt overflowing with intimate nude scenes, has stirred so much media hype and attention when the motion picture’s showing coincided with Valentine’s Day celebration.

Also, in negotiable instruments and law on property, the delineation of what constitutes ‘naked title’ often becomes relevant and a pivotal issue that may resolve property conflicts. Apart from these, there is as well stark nakedness in the world of tax. This is the concept of ‘naked assessment.’

I need not belabor discussing the naked truth with respect to the 44 fallen SAF commandos, that’s what the fact finding committee of the Senate is for. Nor will I critique the extent of the nudity involved in the film Fifty Shades, we already have the Movie and Television Review and Classification Board. However, I shall endeavor to expound on the concept of naked assessment.

As the name implies, naked assessment arises when the assessment is bare or bereft of any foundation, meaning it is arbitrary

and capricious. As elucidated in the case of Collector of Internal Revenue vs. Benipayo, where the Bureau of Internal Revenue (BIR) has come out with a ‘naked assessment,’ i.e., without any foundation character, the determination of the tax due is without rational basis. Accordingly, if the taxpayer’s assessment is barren of factual basis, arbitrary and illegal, such failure on the part of the Tax Bureau cannot serve as a basis for a finding by the Court that the taxpayer is liable for the amount contained in the said assessment; otherwise, the Court would thereby be committing a travesty.

In a recent decision promulgated last February 3, 2015 in CTA Case No. 8367, the Tax Court once again emphasized the significance of the Best Obtainable Evidence Rule vis-à-vis the concept of a naked assessment.

In said case, the taxpayer was

Why atheists can claim the moral high ground

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S soon as the news broke that Craig Stephen Hicks, the man charged in last week’s fatal shooting of three young people—all Muslims—in Chapel Hill, North Carolina, was an ardent atheist, many concluded that this was a religion-based hate crime.

The Internet was quick to react, with the Right playing up the “atheist killer” angle and the Left stressing anti-Muslim bigotry. In fact, the story is still developing and the motive apparently included a parking dispute (which does not exclude religious bias as a factor). But whatever we eventually learn, one lesson of this

tragedy is clear: Beware of generalizations and easy answers, especially if they support your ideological biases.

The Chapel Hill killings had a strong resonance for those who believe that terrorist acts by Islamic extremists are unjustly used to tarnish Islam and all Muslims—and that prominent atheists who single out Islam for criticism, such as Richard Dawkins, contribute to this unfair blame.

Dawkins, whom Hicks listed as a favorite author, tweeted to express his dismay at the shootings; writer Reza Aslan sarcastically responded that no matter how many times Dawkins condemned it,

“We’re just going to keep assuming you haven’t and don’t.” It was his way of making the point that Muslims’ condemnations of terrorism are routinely ignored.

Atheist blogger P.Z. Myers, who has often accused atheist critics of Islam of aiding anti-Muslim bigotry, also seized on the connection.

“The killer was one of us,” Myers wrote on his blog. “He had received the message that murdering Muslims does not expel one from the community of atheists.” (Myers did not give any examples of such a message.)

And yet a more comprehensive look at the content of Hicks’s Facebook page

may not support the view that he had a particular animus against Muslims, as opposed to religion in general. In fact, he mocked conservative Christians who deplore radical Islam while, in his opinion, sharing a similar social agenda. He explicitly opposed what he saw as right-wing efforts to curb Muslims’ religious freedom and defended the right to build a controversial mosque near Ground Zero a few years ago. There is no evidence to suggest that he was especially interested in atheist critiques of Islam.

That said, Myers may have a point when he calls for some atheist soul-

Thursday, February 19, 2015

Moses fasted there for forty days and came out with the Ten Commandments for the people, and just as Elijah the prophet fasted there too for forty days on the way to Horeb for an encounter with God. Jesus would come out of the wilderness with the saving good news from God. But Jesus had to contend first with Satan, the adversary and his polar opposite. For the forty days he was in the wilderness, Jesus was tempted by Satan, instigator of evil who does everything to seduce him to acquiesce to it, trying to turn him away from God’s ways. Jesus led by the Spirit was not alone; in fact, angels of God ministered to him in the midst of the wild beasts and sustained him against the angels’ own ancient adversary Satan.

The wilderness was for Jesus a place of communion with God, a place where he experienced God’s goodness and fidelity, and from where he emerged all the more intent to walk the path of God and to carry out the divine will.

Repent and believe

PREPARED by his desert experience, Jesus started his ministry of proclaiming the good news of salvation to the public. He announced first that the time (kairos) had come, the end-time of fulfillment. God’s promises of old are now to be realized; the people’s waiting is now to be satisfied. This means that the kingdom of God is at hand.

But mere mention of the reign

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of God does not make it real for the people, as it is real in Jesus who has offered himself to the Father and who is filled with His Spirit. People who seek the reign of God and want to be taught God’s ways need to submit themselves to a conversion or transformation of heart and mind (metanoia), to a repentance that becomes real in the turning away from the old ways of the world. This turning away is complemented by the turning toward the good news of Jesus, believing in his gospel and being guided by God’s truth and love. This opening of oneself to the reign of God spells concretely the rejection of Satan and all its allurements.

Alálaong bagá, the beginning of the Lenten season emphasizes for us the imperative of truly desiring to be taught God’s ways and to be guided to God’s paths. It is to be reminded again that our road to salvation is only real in the context of God’s mercy and compassion. Sinners as we all are, repentant and marked with ashes, we are confident like the psalmist that in His loving kindness God will save us. Invited to the divine goodness, we know we need to be humble, like the poor ones who simply call upon God’s saving love. We also have the blessing of the forty days of Lent (Kuaresma) to encounter our Saviour.

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.

assessed for alleged income tax deficiency for the taxable year 2007. Taxpayer promptly assailed the validity of the Formal Letter of Demand and Assessment Notice (FAN) issued to it clarifying that its failure to submit documents is not willful but due to reasonable and justifiable causes, in particular, that its records were destroyed by neck-deep waters and ankle-deep mud caused by typhoons Ondoy and Pepeng. Nonetheless, taxpayer still submitted some reconstructed documents such as worksheets and schedule of purchases and expenses.

On the other hand, the Tax Bureau contended, among others, that in issuing the FAN, it resorted to the Best Evidence Obtainable Rule in view of the taxpayer’s alleged failure to furnish the BIR of the requested supporting documents.

With this scenario, it becomes crucial to determine whether the assessment was valid or not. It bears recalling that the Best Evidence Obtainable Rule is anchored on Section 6 (B) of the Tax Code of 1997, as amended, and Section 2.3 of the Revenue Memorandum Circular 232000. This empowers the Commissioner of Internal Revenue to assess the proper tax based on the best evidence obtainable in cases where: (a) the report or records requested from the taxpayer is not forthcoming i.e. records are lost; refusal of taxpayer to submit such records; or (b) the reports submitted are false, incomplete or erroneous.

In the instant case, the Court pointed out that while the law allows wide latitude to the BIR Commissioner to the Best Evidence Obtainable Rule, such power is not with-

out limitation. In deciding in favor of the taxpayer, the Court applied the rule laid down by the Supreme Court in the case of Commissioner of Internal Revenue vs. Hantex Trading Co., Inc. (G.R. No. 136975, March 31, 2005) declaring that the Tax Bureau could have determined the taxpayer’s liability through estimation considering the latter’s absence of accounting records, which were destroyed by typhoons. However, such estimation should be based on sufficient evidence.

Thus, as aptly held by the Supreme Court in the Hantex case citing the Benipayo case, the presumption of correctness of an assessment, being a mere presumption, cannot be made to rest on another presumption. Since the BIR failed to present any evidence which it used as a basis or foundation for the subject deficiency assessment, the Court found BIR’s assessment void for lack of factual basis.

With these in mind, it behooves upon taxpayers beset with tax assessments to be very vigilant and to see to it that no naked assessments are issued against them.

searching. Too many holier-than-thou (and smarter-than-thou) atheists claim their belief system is morally superior to religion because it does not lead to murderous fanaticism. Yet in the 20th century, millions were slaughtered by communist regimes that embraced militant atheism as part of their creed.

Today, of course, there is no radical atheist terror network. But this does not make atheists immune to fanaticism or hatred toward those who believe differently than they do. Ironically, that includes Myers himself: In a blog last year discussing a Christian movie in which a fatally injured atheist profes-

sor is persuaded by two missionaries to embrace Jesus, he wrote, “Just so all you Christians know, if I’m in a fatal accident [and] you try to pull that prayerand-conversion (expletive) on me, I’m going to stab you.”

There is a lot of deplorable prejudice against nonreligious people in large segments of American culture. But atheist intolerance exists as well, and (speaking as an agnostic) it can be toxic even if it does not lead to violence.

So, by all means, let’s treat the Chapel Hill shootings as a lesson in humility.

But let them also be a lesson in not using tragedies to score political points. TNS

The author is a senior associate of Du-Baladad and Associates Law Offices, a member firm of World Tax Services 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 email the author at filamer.miguel@bdblaw. com.ph or call 403-2001 local 360.