Businessmirror april 12, 2015

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

U.N. Media Award 2008

BusinessMirror

www.businessmirror.com.ph

A broader look at today’s business

n Sunday, April 12, 2015 Vol. 10 No. 185

P25.00 nationwide | 7 sections 32 pages | 7 days a week

BSP, financial market ‘keenly watchful’ of Fed rate move

week ahead

ECONOMIC DATA PREVIEW Foreign exchange

n Previous week: The local currency traded sideways during the week. The peso opened trading at 44.39 to a dollar on Monday following the trading hiatus during the Holy Week. The peso then slightly depreciated to 44.48 to a dollar on Tuesday to slightly recover to 44.465 to a dollar on Wednesday. Trading was suspended on Thursday for the commemoration of the country’s Day of Valor.

The peso then corrected on Friday to end the week at 44.55 to a dollar. The average trade value of the peso during the week is at 44.47 to a dollar, stronger than the previous week’s 44.69 to a dollar.

n Week ahead: Foreignexchange market players will likely look for fresher leads from the data coming from advanced economies, particularly in the US, after the Federal Reserve made public its minutes of meeting just this week (see related story). The peso is still bound to trade in the middle band of the 44 territory this week.

Manufacturing data

(February 2015) April 13, Monday

n January manufacturing data: The volume of production index in the first month of this year grew by 3.3 percent, slightly lower than the 4.4 percent seen in the same month last year. The increase, according to the Philippine Statistics Authority, was attributed to the performance of 14 major sectors—including printing, leather products, basic metals, beverages, textiles, tobacco products, transport equipment, nonmetallic mineral products, wood and wood products, paper and paper products and machinery.

n February manufacturing data: The country’s manufacturing is expected to improve in February this year due to the higher domestic demand, particularly in food production. Bianca Cuaresma

T

By Bianca Cuaresma

Russia nervously eyes the

HE Bangko Sentral ng Pilipinas (BSP) and the rest of the local financial market are expected to be up on their toes in looking for clues on the actual timing of the US Federal Reserve’s (the Fed) expected interest-rate normalization, after the Fed released the details of its latest meeting this week.

In an e-mail response to the BusinessMirror, Bank of the Philippine Islands (BPI) economist Nicholas Antonio T. Mapa said the recent minutes of the Federal Open Market Committee (FOMC) will cause the BSP and the market players to search for new leads as to when the Fed’s interest-rate hike will start.

This, as the FOMC minutes of meeting, published earlier this week, bared the Fed policy-makers’ divergence of opinion on the timing of its first rate hike.

In particular, the more detailed view of the agenda in the latest meeting of the Fed showed that,

while “several” participants judged that the economic data and outlook were likely to warrant beginning normalization in June, “others” see that it would be appropriate to begin raising rates until later this year, and even “a couple of participants” suggested that the increase be done in 2016.

As such, the BSP is expected to stay pat with its “no change” policy stance in its next meetings, as it adapts a wait-and-see stance on data coming from the US. Market players are expected to do the same and, barring other big developments, the See “Fed Rate Move,” A2

Exports expected to look up by Q2 T

HE country’s export weakness is expected to end in the second quarter of the year, an international banking giant said in its recent country assessment.

In a research note, JPMorgan said it expects the country’s exports to show some “positive payback” in the months of April to June this year—which would make up for the lower-than-expected export growth in recent months.

In particular, the Philippine Statistics Authority (PSA) recently reported that the country’s exports declined for a third straight month in February this year by about 3.1 percent.

This was due to the decline in six major commodities, out of the top 10 commodities for the month—woodcraft and furniture; other mineral products; metal components; electronic equipment and parts; other manufactures; and machinery and transport equipment.

The slowdown was blamed on

PESO exchange rates n US 44.5590

U.S.-Iran deal

the overall decline in the demand for exports in the region.

“The majority of the major economies in East and Southeast Asia registered negative export performance in February 2015, with only PR [People’s Republic of] China in the positive territory.

This partly mirrors the still-fragile global economy, which is particularly reflected in the country’s weak turnout of merchandise exports on the back of lower demand from the country’s major trade partners—Japan and China,” Economic Planning Secretary Arsenio M. Balisacan said.

Balisacan’s explanation was backed up by JPMorgan, saying that the underlying trend of exports in the region weakened across the board.

The anticipated pickup in exports in the second quarter of the year will likely be brought by the high demand for electronics during the period. Bianca Cuaresma

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ussia has no interest in seeing a nuclear-armed Iran in the neighborhood, but the mere threat of an unshackled Iranian nuclear program and a hostile relationship between Washington and Tehran provided just the level of distraction Moscow needed to keep the US from committing serious attention to Russia’s former Soviet sphere. GlobalEye»C1

Dollar snaps 3-week loss amid US economy gain Jobless 10 ANNUAL 8 5.5% rate 6 Percent of 4 civilian labor 2 force that 0 is unemployed, ’04 by month, seasonally adjusted:

6.2% ’14

5.5%

10 10 88 66 44 22 00

March ’14

March ’15

Graphic: TNS Source: U.S. Bureau of Labor Statistics

T

he US currency snapped a three-week loss on speculation the Federal Reserve (the Fed) is inching closer to raising interest rates as the economy improves. A gauge of the greenback surged after jobless claims dropped to an almost 15-year low, boosting confidence that the Fed will increase borrowing costs this year for the first time since 2006.

“We remain pretty optimistic on the dollar,” Georgette Boele, a currency strategist at ABN Amro Bank NV, said by phone from Amsterdam on Friday. “The strength of the economy is still there. I think people had a bit of doubt because of the weaker numbers recently, and now they’ve started to change their views.”

The Bloomberg Dollar Spot Index,

which tracks the US currency against 10 major peers, rose 1.8 percent this week to 1,204.23 in New York. The greenback rallied 3.3 percent to $1.0604 per euro, near a 12-year high, and added 1.1 percent to ¥120.22.

The US currency has gained 7 percent this year, the best performer after the Swiss franc, among a basket of 10 developed-nation currencies, according to Bloomberg Correlation-Weighted Indexes.

Net bullish bets for the dollar to strengthen against the euro by hedge funds and money managers remained at almost a record, according to Commodity Futures Trading Commission data.

Futures positions betting on a stronger greenback versus the shared currency See “Dollar,” A2

n japan 0.3696 n UK 65.5775 n HK 5.7499 n CHINA 7.1800 n singapore 32.7881 n australia 34.3157 n EU 47.5133 n SAUDI arabia 11.8799 Source: BSP (10 April 2015)

News

BusinessMirror

A2 Sunday, April 12, 2015

China says it’s a ‘robust force for peace’ in South China Sea Continued from A8

told reporters while on a visit to Jamaica. Malaysia, Taiwan and Brunei Darussalam also claim all or parts of the South China Sea.

In an apparent reference to the US, Hua said: “I think everybody can clearly see who has the biggest size and muscle in the world.” She added that, “We hope the US can...genuinely play a positive, constructive and responsible role in promoting peace and stability in the South China Sea and the region.”

The US has increasingly expressed concern about continuing Chinese construction that artificially adds land to the reefs and islands it controls in the region, projects documented by aerial photos and eyewitness accounts. US military officials have said they could be aimed at hosting military facilities as part of an “aggressive” effort to exert sovereignty there.

Hua said on Thursday that such work was mainly for peaceful civilian purposes, such as aiding fishermen, but also served to “meet necessary demands” for defense. She also reiterated China’s stance that its sovereignty over the area gives it the right to carry out whatever work it deems worthy, but that such activities are not directed at any third parties.

China says it wants a code of conduct between the parties to avoid conflicts in the South China Sea, but says the US and other countries without direct claims in the region should stay on the sidelines.

While the US says it takes no position on sovereignty issues, its mutual-defense treaty with the Philippines could draw it into a confrontation with China in the event of a military crisis.

Fed rate move...

financial system will likely continue to trade sideways as it awaits further data.

Mapa’s personal forecast, however, is that the BSP will start raising its rates in June this year.

“Although the BSP remains one of the few central banks with the room to keep rates steady this year, the imminent hike in policy rates in the world’s

In this March 30, 2014, file photo, Philippine Marines raise the Philippine flag on the first day of their deployment on the dilapidated navy ship BRP Sierra Madre at the disputed Second Thomas Shoal off the South China Sea. AP/Bullit Marquez

Washington also strongly insists on freedom of navigation through the South China Sea, and the presence of the US Navy in the area is a source of constant frustration for Beijing.

On a visit to Tokyo on Wednesday, US Defense Secretary Ash Carter said the US advocated that “no changes in the status quo are made coercively and that territorial disputes, which are long-standing, are not militarized.”

most important financial market will undoubtedly require some form of action on the part of BSP,” Mapa said.

Among Mapa’s reasons behind his expectation on a BSP rate increase in June this year is a forecast improvement in the first-quarter performance of Europe, the solid growth numbers from the US and

the robust job creation in the US.

He also cited the above 6-percent gross domestic product growth in the Philippines will limit the need for the BSP to provide further monetary-policy stimulus to a vibrant domestic economy.

The BSP will have its next meeting on May 14 this year.

3-DAY EXTENDED FORECAST APRIL 12, 2015 | SUNDAY

TODAY’S WEATHER

EASTERLIES AFFECTING THE EASTERN SECTION OF LUZON AND VISAYAS (AS OF APRIL 11, 5:00 AM)

Easterlies are winds coming from the East passing over the Pacific Ocean. These are warm and moist in nature; causing hot weather and generating thunderstorms.

BAGUIO CITY 15 – 23°C SBMA/CLARK 24 – 33°C TAGAYTAY CITY 22 – 30°C

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Partly cloudy to at times cloudy with rainshowers and/or thunderstorms Partly cloudy skies

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itself, after all the document was not crafted by the NTC itself, but by a group named Democracy Net Philippines, which tags itself as the “drafters and supporters of the Magna Carta for Philippine Internet Freedom.”

Specifically, the group casted doubt on the computations and the definitions of telecommunications standards in the international scene, while complaining on technicalities such as the rules on measurement and metrics of downstream and upstream rates.

“Did the commission test, even in a prima facie way, whether these standards are applicable and workable methods for measuring Internet speed? Does the commission have empirical findings on the effectiveness and success of these formulas to justify their use?” the group asked.

“Worse, the confusion over these standards would be counterproductive, as they would needlessly entangle the ISPs in endless disputes, instead of allowing them to continue focusing their efforts on developing newer, better and more affordable products and services for the benefit of their consumers. These entanglements could also potentially and significantly inhibit or exercise a ‘chilling effect’ on future investments in Internet development, with the result that the objective of improved Internet speed is not met,” PCTO added.

Another major problem of the memo, the chamber said, is the lack of consideration of several factors that affect Internet speed, such as the red tape and the bureaucratic process of getting environmental permits, the type and the state of the device used by the subscriber, the design of the building where the device is located, the distance of the subscriber from an ISP’s office, and illegal or unauthorized extensions to a subscribed account, among others.

“Analyzing all points said, there is, therefore, an obvious urgent and imperative need for all interested parties—the commission, consumer groups, ISPs and the public at large—to study the matter at hand more meticulously and carefully. This can best be done through the convening of a technical working group, which will study, among others, the broad strokes and finer points of the above details,” PCTO said.

The US currency has gained for the past nine months, spurred by a recovering US labor market and signs that the Fed is getting closer to tightening monetary policy. That contrasts with central-bank peers in Japan and Europe, where unprecedented stimulus has debased currencies.

The Federal Open Market Committee was split at its meeting last month on when to begin raising rates from near zero. Several participants wanted to normalize policy starting in June, while others favored later in the year, according to minutes of the March 17 and 18 gathering released also on Wednesday.

Federal fund futures show a 58-percent probability the central bank will raise borrowing costs from virtually zero at the December gathering, according to data compiled by Bloomberg. That’s down from 78 percent before the Fed meeting.

US retail sales rose 1 percent last month, according to a survey of analysts and economists before the data are released on April 14. Retailers were hurt in February as bitter cold swept over parts of the US, discouraging consumer purchases.

“Next week, the market will continue to focus on US indicators, which are likely to confirm that growth is picking up,” and will support the dollar’s upward trend, Nordine Naam, a strategist at Natixis SA in Paris, said in a note. Bloomberg News

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continued from A8

were at 215,258 contracts as of Wednesday, down from the record 226,560 reached the week before.

Fewer Americans applied for unemployment benefits during the past four weeks than at any time in almost 15 years, signaling underlying strength in the labor market.

“The improving jobless-claims data helped to ease concerns about what’s happening in the American economy,” Karl Schamotta, director of foreign-exchange research and strategy at Cambridge Global Payments in Toronto, said by phone on Friday. “Rate hikes are still on the menu.”

Fed Bank of Richmond President Jeffrey Lacker said he continues to favor a first interestrate increase in June, because recent soft readings on the economy will probably prove temporary.

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‘Shady’ law...

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Dollar...

Rally time

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news@businessmirror.com.ph

@PanahonTV

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EconomySunday

www.businessmirror.com.ph • Editor: Vittorio V. Vitug

BusinessMirror

briefs albay boosts digital tourism drive

DARAGA, Albay—The provincial government of Albay and Smart Telecommunications Inc. (Smart) once again joined hands—this time, in the launch of digital tourism for Albay— on Friday afternoon at the historic church of Nuestra Señora de Porteria, which lies atop the Santa Maria Hill in this town, with the majestic Mayon Volcano at the background.

The partnership made Albay the first province in the Philippines to employ digital tourism.

The occasion was led by Albay Gov. Joey Salceda; Jose FL. Rosete, Smart external relations manager for Luzon; representatives from the National Historical Commission and the Catholic church; Albay provincial and Daraga and Camalig municipal officials; tourism officers; media and other sectoral group representatives.

Salceda said digital tourism is the third collaborative project of the province with Smart. The first is the Info Board with 15,000 subscribers, and the second is dubbed as Pindot.

He said the first two mobile applications are both part of the Disaster Risk Reduction and Management program of Albay.

“This is a concrete proof of the continuously rising level of the tourism industry in the province,” Salceda said. He added that as a free mobile application, one can see in just a single press on the button of an Android cellphone the needed information about tourism in Albay, thus, serving a handy tourism guide to the province. PNA

bdo provides cms services to leading shipping company

CMA CGM Philippines Inc., a major carrier for companies in the US, Europe, Latin America and Middle East, recently signed an agreement with BDO Unibank Inc. (BDO) for its cash

management services (CMS).

A news statement released over the weekend said that the leading container shipping company has availed of various BDO collection and payment solutions to help them manage their finances more effectively.

“With BDO’s ePayment solutions, it’s now easy for CMA CGM to pay their employees, suppliers and vendors,” BDO Senior Vice President and Head of Transaction Banking Group Emmanuel Narciso said. “Likewise, for their collection requirements, we will provide CMA CGM with efficient ways to collect container rental payments from their clients. And they can view all these transactions anytime of the day, anywhere they are through BDO’s Business Online Banking,” he added.

CMA CGM General Manager Michel Azrak expressed his appreciation to BDO for making these cash management services available to them. “We have surely chosen the right bank partner as we grow our business.”

PAF allots p1.5m for propeller repair of sf-260 trainer fleet

THE Philippine Air Force (PAF) has appropriated P1.5 million for the spare parts needed in the overhaul and repair the propeller assemblies of its SF-260 trainer aircraft.

Prebid conference is scheduled on Tuesday at PAF Procurement Center Conference Room, Villamor Air Base, Pasay City. Submission and opening of bids is slated on April 28 at 9 a.m. in the same venue.

Prospective bidders should have an experience in similar project within the last five years.

The SIAI-Marchetti SF-260 is an Italian light aircraft marketed as an aerobatics and military trainer. PNA

Sunday, April 12, 2015 A3

DENR clips local executives’ powers in award of small-scale mining deals

T

By Jonathan L. Mayuga

he Department of Environment and Natural Resources (DENR) has issued a set of revised guideline on smallscale mining operation intended to stop illegal mining activities and prevent mining’s adverse impact to the environment.

The new guideline is contained in Department Administrative Order (DAO) 20015-03 providing for the revised implementing rules and regulations of Republic Act 7076, or the People’s Small Scale Mining Act of 1991.

Director Leo Jasareno of the DENR’s Mines and Geosciences Bureau said the order signed by Environment Secretary Ramon JP Paje reflects the Aquino administration’s commitment to protect the environment against destructive mining activities, consistent with Executive Order 79 signed by President Aquino in July 2012.

The order maintains small-scale mining for all nonmetallic minerals such as quarry materials but limits small-scale mining of metallic minerals to gold, silver and chromite.

The order also essentially clips the powers of local chief executives in awarding

small-scale mining contracts. Instead of the governor, city or mun i c i p a l m ay or, small-scale mining contracts shall now be issued by provincial and city mining regulatory board. jasareno Jasareno says the order is a breakthrough in small-scale mining regulation.

With the revised regulation on smallscale mining, he said the DENR looks forward to the transformation of small-scale mining operations into a formal and responsible sector of the mining industry, significantly contributing development in the countryside.

The DAO 2015-03 also bans the use of mercur y, hydraulic and compressor mining.

It provides for centralized custom mills within a mineral processing zone inside a declared Minahang Bayan; limits the total term of small-scale mining to a maximum period of six years; allows the establishment of Minahang Bayan in areas covered by large-scale mining applications that have been denied but with pending appeals, provided that royalties shall be paid in escrow, while awaiting for the final resolution of the appeals.

The order also limits the qualified applicants of small-scale mining to a cooperative or a group of small-scale miners and requires small-scale mining contractors to pay a government share in the amount to be set by the provincial, city or municipal mining regulatory board on top of the payment of the usual taxes.

Mineral processors will also be required to secure mineral processing licenses from the provincial, city or municipal mining regulatory board.

Small-scale miners and operators lack the financial and technical capacity to extract metallic minerals with minimum or less adverse impact to the environment, implement rehabilitation plan of mined out areas, or remediation measures to clean up mine waste advertently or inadvertently dumped into rivers during their operations.

SundayV

Busine

A4 Sunday, April 12, 2015

editorial

A new lease on life for Greece

T

HE report that Greece was able to repay €460 million to the International Monetary Fund (IMF) as an installment on its international bailout loan drew a sigh of relief from the IMF and the Eurozone creditors, but elicited groans of pain from the Greek people and their government. The repayment was necessary to enable Greece to access the rest of the €240-billion loan fund that has been approved for its bailout by the international lenders.

As a condition for the bailout, Greece had committed itself to a vast reform program that included increasing revenue by expanding the tax base, minimizing tax evasion, selling off public assets, and cutting down expenditures by disbanding various subsidy schemes, privatizing public agencies, etc. Still, the government remains on life support.

One can understand the position of the lenders. They cannot throw good money after bad, they must be given assurance that they will get their money back.

And, for that to happen, Greece must accept a debilitating austerity program. But Greece is hurting, and hurting badly. When Greek Prime Minister Alexis Tsipras presented Germany, its principal sympathizer, with a bill of €279 million for war damage, which German Prime Minister Angela Merkel promptly rejected, Greece was acting in desperation.

Clearly, there is need for political statesmanship on the part of the international lenders.

Greece is in the depths of a depression. What is needed to get it out of there is a carefully calibrated expansionary program, one that will restart Greek industry, not an austerity program that will only plunge it deeper into the depression.

Prior to his election, French President François Hollande promised to the French electorate that, once elected, he will launch and pursue a program for France that is development-oriented, about the opposite of the austerity-focused policies of the previous government. Hollande won the election, but, for one reason or another, did not pursue his articulated policy as energetically as he had announced it.

A rejuvenation program akin to the Hollande program in its original conception is what Greece needs at this time. Resuscitate manufacturing, awaken tourism, envigorate exports, widen infrastructure, even weaken the currency subject to the limits imposed by the Eurozone. At the same time, dismantle “excessive” subsidies but strengthen social security and other elements of the national safety net.

Naturally, Greece must not be allowed to continue having its cake and eating it, too. The government bureaucracy that, from reports, is bloated with political appointees must be decisively downsized. Programs catering to populist demands must be terminated. Shortened working hours must be returned to normal.

The need for statesmanship applies not just to the international lenders but also to the Greek leadership. Their platform of rejection of the bailout terms and reversal of some of them must give way to acceptance, if with reservation, of those terms. That is certainly a way for Greece to remain a solid member of the Eurozone and of the international economic-political community, as well.

Where your tax dollars go

By John Gray

The Heritage Foundation

I

T’S a question that naturally springs to mind when tax season rolls around: Where are all those tax dollars being spent?

In total, Washington will spend $12,304 per citizen. Unfortunately, the government will only collect $10,878 in tax revenue per person.

That means that, you, the American citizen, will be left with a tab of $1,426. The $1,426 placed on every citizen’s tab represents this year’s deficit of $455 billion.

Let’s put this into perspective.

Adjusting for inflation, the government spent $894 per person in 1940, $7,319 per person during the peak of World War II (1945), $6,026 per person in 1980, and slightly more than $7,000 during the 1990s. That means that spending per person jumped about 1,276 percent between Frank Sinatra’s public debut and today.

So what exactly does that $12,304per-person spending get you? Let’s take a look: Social Security: $2,884 per person. Social Security is the largest federal program, or roughly a quarter of all federal spending. Social Security provides benefits to the elderly, individuals with disabilities, and dependents and survivors. According to the Congressional Budget Office, Social Security is expected to grow at an unsustainable pace of 6 percent per year. By 2025 Social Security is expected to support more than 65 million people; nearly a 40-percent

Gospel

Sunday, April 12, 2015

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increase relative to 2014.

Medicare: $2,103 per person.

Like Social Security, Medicare is on an unsustainable trajectory. In 10 years, Medicare spending is expected to nearly double. The number of beneficiaries will climb from 55 million in 2014 to more than 70 million by 2025. Together, Medicare and Social Security costs—nearly $1.6 trillion—is greater than the economy of Spain.

Food stamps: $241 per person.

The number of beneficiaries receiving food stamps is projected to drop from the peak it reached during the financial crisis. However, while the number of people receiving stamps will decrease as the economy improves, spending is projected to increase as the average benefits per beneficiary will increase with the inflation. CBO estimates that more than 46 million Americans will receive food stamps this year.

Other mandatory and welfare programs: $2,530 per person. Removing the largest mandatory programs, such as Social Security, Medicare and food stamps, the amount spent per person remains staggering. Medicaid ($1,129 per person), Supplemental Security Income ($188 per person), and unemployment compensation ($113 per person) are just a few examples of other mandatory spending.

Total mandatory spending is projected to swell to 14.2 percent of gross domestic product in 10 years, consuming 78 percent of all federal revenues.

N the evening of that day, the first day of the week, the doors being shut where the disciples were, for fear of the Jews, Jesus came and stood among them and said to them, “Peace be with you.”

When He had said this, He showed them His hands and His side. Then the disciples were glad when they saw the Lord. Jesus said to them again, “Peace be with you. As the Father has sent me, even so I send you.”

And when He had said this, He breathed on them, and said to them, “Receive the Holy Spirit. If you forgive the sins of any, they are forgiven; if you retain the sins of any, they are retained.”

Now Thomas, one of the 12, called the twin, was not with them when Jesus came. So the other disciples told him, “We have seen the Lord.”

But, he said to them, “Unless I see in His hands the print of the nails, and place my finger in the mark of the

Defense: $1,774 per person.

That amount includes funding for military bases, troop pay and weapons procurement. It also includes the various operations occurring around the world, including those in Iraq and Afghanistan. This is a slight decrease from 2013, when estimated spending per person was $2,000. The drop in spending per person can be attributed to budget restraints enacted in 2011 and the drawdown in war spending.

Education: $1,340 per student.

According to the National Center for Education Statistics, the US spends about $12,000 per student. A majority of the funding originates at the state and local levels. Although spending per pupil has more than doubled since the 1970s, test scores in math, reading and science have remained the same.

Net Interest: $868 per person. Net interest is the cost of our $13-trillion public debt. This year every American will have to pay $868, the result of excessive government spending beyond what the government can afford. Unfortunately, the problem is projected to further deteriorate. By 2025, every person will pay $2,330 in interest payments.

Taxpayers will have to determine if they believe the government spending $12,304 per person is a decent bargain. Anyone who has reservations should take further note: If nothing is done now, the federal government will spend $17,400 per person in 2025—nearly 40 percent more. Tribune News Service

nails, and place my hand in His side, I will not believe.”

Eight days later, His disciples were again in the house, and Thomas was with them. The doors were shut, but Jesus came and stood among them, and said, “Peace be with you.”

Then He said to Thomas, “Put your finger here, and see my hands; and put out your hand, and place it in My side; do not be faithless, but believing.”

Thomas answered him, “My Lord and my God!” Jesus said to him, “Have you believed because you have seen me? Blessed are those who have not seen and yet, believe.”

Now Jesus did many other signs in the presence of the disciples, which are not written in this book; but these are written that you may believe that Jesus is the Christ, the Son of God, and that believing, you may have life in His name.”—John 20:19-31

Voices

essMirror

opinion@businessmirror.com.ph • Sunday, April 12, 2015 A5

Fantastic story A

Free Fire

By Teddy Locsin Jr.

FTER first submitting its report to the Malaysian government, the Moro Islamic Liberation Front (MILF) condescended to give what it claims is a copy to the Philippine government.

Not surprisingly, the Malaysian defense minister, dressed camouflage with a floral print, tweeted a warning address to Filipinos: If the Philippines does not move on from that trivial incident at Mamasapano and give in to the MILF’s demand for a homeland of its own, all hell will break out. The MILF gave another copy to its drumbeaters in the Philippine press.

Naturally, it took the MILF a while tocomeupwithastorythataddresses,

though it doesn’t disprove, what the Philippine National Police Board of Inquiry and the Senate investigation turned up. Not the least of which is the litany of prevarications that Miriam Defensor-Santiago said she heard from government witnesses.

Clearly, this woman must be elected president regardless of her health.

Just one year of her in the Palace will do us more good than two terms (if that were possible) of anyone salivating for that place today.

Suffice it to say, that the MILF report has thrown the Bangsamoro basic law drumbeaters into spasms of ecstasy. It’s had them coming and coming and coming some more. So much so that the

Human Rights Commission suggested deleting the word “massacre” from any description of the Mamasapano whatchamacallit.

To be sure, examples of the usage of massacre in the Oxford English Dictionary clearly cover what happened there. You see, it is still a massacre even if the good guys fired back or even if they fired first—so long as they were outnumbered, outgunned and sure to lose and yet no mercy was shown to them.

Naturally, the MILF claimed the obvious: self-defense against an attack of zombies. Although shot down already, the Special Action Force (SAF) had to be shot again pointblank to make sure

they stayed dead.

So, not only do we have widows and orphans—not of heroes but of a botched encounter, as the media still describe it but—widows and orphans of the living dead.

No wonder we were startled when General Espino said that, rigor mortis notwithstanding, the SAF are not fallen. Maybe, this is what he meant.

Already, the grief-stricken father of a dead SAF was careful to embroider his grief with mandatory praise of the peace process.

The goal is clear: Break the will of the grieving until they are grateful for their dead.

And of course, the MILF had no

idea that the Malaysian bomb maker and two local confederates were making bombs inside their camp.

And they were not teaching anyone else how to make more of them.

All of this leads to the conclusion that if only the SAF had alerted those hiding the terrorists that it was coming for them, then the watchamacallit would not have happened. The MILF would have moved them elsewhere. And with straight faces the MILF would have told the arriving SAF, “Yes, Zulfikli’s Bin Hir but he’s gone now.” Result: Peace process preserved, bombs going on being made in an MILF camp, and soon enough, going off in shopping malls everywhere.

various other economic mechanisms, like labor search, has further reduced the amount of price stickiness required to cause major recessions.

Sticky-price models have become the dominant models used at central banks. The smoothly adjusting, flexible-price models of the 1980s are basically not used anywhere, by anyone, for anything.

Even some of the biggest skeptics of sticky prices are coming around.

In 2004 economists Mark Bils and Peter Klenow looked at how businesses changed prices, and found that the changes were too frequent to be consistent with the sticky-price story. But in 2014 they reversed their stance, looking at evidence on the adjustment of markets in recessions and concluding that “sticky prices... deserve a central place in business cycle research.” Meanwhile, economists V.V. Chari, Patrick Kehoe and Ellen McGrattan, longtime opponents of the mainstream sticky-price models, nevertheless wrote a paper in 2010 entitled “Prices are sticky after all.”

Sticky-price models still have

their dogged opponents here and there throughout the macroeconomics world. Steve Williamson of the Federal Reserve Bank of Saint Louis dismisses sticky prices on his blog, saying that the Great Recession went on too long to have been caused by price stickiness, and that sticky-price models have conquered central banks mainly due to slick marketing. Elsewhere, University of California-Berkeley economist Brad DeLong grumbles that the success of the sticky-price models (called “New Keynesian” models even though they have relatively little to do with John Maynard Keynes) could be distracting from the search for deeper reasons for economic dysfunction.

But despite these scattered denunciations and grumbles, sticky prices are enjoying a hard-fought place in the sun. The moral of the story is that if you just keep pounding away with theory and evidence, even the toughest orthodoxy in a mean, confrontational field like macroeconomics will eventually have to give you some respect.

What causes recessions?

By Noah Smith Bloomberg View

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NE time, at a dinner, I asked a famous macroeconomist: “So, what really causes recessions?”

His reply came immediately: “Unexplained shocks to investment.”

We really just don’t know the answer. Some people—the types who think the market is self-adjusting and wonderful and doesn’t need any government help—believe that recessions are a natural, even healthy process. Maybe recessions are responses to changes in the rate of technological progress, or to news of future progress, or even bursts of creative destruction. Others—the people who tend to think the market needs a little helping hand—believe that there’s something blocking the market from adjusting to the shocks that buffet it.

The market adjusts by the price mechanism. If the cost of something goes up, the price goes up to match.

If demand falls, the price drops until the market clears. So if you want

to show that the market doesn’t naturally self-regulate, the simplest and easiest way is just to show that prices themselves can’t adjust in response to events. This phenomenon is called “sticky prices.” If prices are sticky, then someone—the Federal Reserve, or perhaps Congress and the Treasury—needs to nudge markets back into their long-run equilibrium after a big shock.

In 1994 economists Greg Mankiw and Lawrence Ball wrote an essay for the National Bureau of Economic Research entitled “A Sticky-Price Manifesto.” Sticky prices might sound like a strange thing to write a manifesto about (did the prices spill Coke all over themselves?), but the essay heralded the beginning of a macroeconomics mini-revolution.

It was a direct threat to the line of research that had been dominant in the 1980s, which tried to explain recessions without sticky prices.

The economic establishment reacted harshly to the upstarts. “Why do I have to read this?” fumed Robert Lucas, the dean of macroeconomics.

“This paper contributes nothing.”

He went on to accuse the stickypricers of being opposed to science and progress.

But Lucas fumed in vain. During the following decade, the stickyprice models went from strength to strength. New math was developed to make them easier to use. Possible reasons for price stickiness were investigated—for example, “menu costs,” in which the seemingly trivial costs of changing prices add up to a big problem across the broader economy.

Even more telling, sticky-price theorists proved that you didn’t need a lot of price stickiness to mess up the smooth working of the economy.

Even the tiniest dash of stickiness would turn all kinds of theories on their heads. Economists Susanto Basu, John Fernald, and my doctoral adviser Miles Kimball, for example, showed that when prices are even a little sticky, bursts of technological progress actually hurt the economy for a short while, by causing a burst of deflation, before eventually boosting growth. Over time, the addition of

Social Security and Ronald Reagan’s ghost L Bloomberg View

By Megan McArdle

OTTERIES have been described by waggish statisticians as “a regressive tax on people who can’t do math.” I am beginning to think something similar about Social Security’s trust fund: It is a regressive tax on the brains of people who have never studied accounting.

If you want to spend a hilarious and illuminating 15 minutes, try to convince a financial analyst that the Social Security trust fund exists and is important. This is what they will tell you: “It’s a consolidated entity. The treasury bonds in the trust fund are an asset of one part of the government and a liability of the other part. Net effect on the balance sheet: zero.”

What advocates of the “trust fund as obligation” story are trying to do is make that asset and liability transitive to parties outside the government; they speak as if the bonds are assets of, and liabilities to, beneficiaries themselves.

This is not legally true. Flemming v Nestor decided that in 1960: You have no contractual right to Social Security benefits.

Why does this matter? Because if you had a contractual right, the courts would step in to ensure that you were paid benefits. Due to various provisions of the Constitution —notably the Takings Clause and the 14th Amendment—the government has very limited ability to rewrite the terms of contracts it has entered into with other parties. Bondholder Pete Peterson has a contractual right to be paid the interest on the bonds. So if

you, a hardworking American citizen who is duly paying your Social Security taxes, had a contractual right to benefits or the interest on those bonds, then this would be legally meaningful. But you don’t. What you have is a legal right to benefits for which you are eligible. But you have no protection against Congress changing that law—just the political protection afforded by the popularity of Social Security.

It is trivially true that under current law, you have a right to collect benefits until Congress changes the law, or the trust fund runs out of special-purpose bonds and cuts the benefit level. But this is not what people are trying to say when they invoke the sacred trust fund: They are trying to say it means that you cannot change the law. Legally, this is nonsense.

As a fallback, the trust funders say that the bonds convey some sort of moral obligation. We made a deal with people, they say: higher taxes in the 1980s and onward in exchange for promised benefits.

Because the program was overfunded in the early years, a significant chunk of those (regressive) payroll taxes helped fund Ronald Reagan’s tax cuts for the wealthy. Now that it’s their turn to pay higher taxes to fund Social Security, they’re trying to welsh.

This is manifestly unconvincing for several reasons.

First of all, the idea that workers somehow explicitly cut a deal to pay more payroll taxes now, give the money to rich people, and then get

it back later in the form of higher income taxes doesn’t really hang together. The timeline is wrong, for one thing; the first round of Reagan tax cuts preceded the Social Security deal by several years.

Also, since “the rich” in 1983 and “the rich” today are not the same group, it’s hard to see how the former could make any sort of agreement binding on the latter.

As far as I can tell, the idea of this vague implied contract was first bandied about during the proposed Social Security reforms under George W. Bush some 20 years later, but I could just be missing earlier references. At any rate, I do not think that you can say that there was a widespread understanding that we were raising payroll taxes in order to give money to rich people in the hopes that they might pay it back later, because if that had been the widespread understanding, it never would have passed. You’re essentially arguing that people were parties to a binding contract they were never told about.

Second of all, let’s take a look at this “deal.” Assume there really was an implied contract. Here’s how it would actually read, stripped of the legal language: “We’re raising your payroll taxes now and putting the money in a trust fund that will invest in special-purpose government bonds. When payments start to exceed taxes, we’ll sell the bonds to the Treasury at par and get some cash in exchange, which will be taken out of the general fund, which is to say, taxes on those rich people we gave

the money to in the 1980s. In 2016 the trust fund for disability insurance will run out, and benefits will be slashed by almost 20 percent. In 2034 the OASI Trust Fund will run out, and benefits will be cut by about a quarter across the board. These events may occur earlier, and cuts may be larger, if future revenues fall short.”

Are the trust funders interested in making sure that retirees and disabled people stick to their part of the “deal”? I tried to pin one chap down on this in a Twitter discussion and had no luck. But my basic feeling is: of course not! Humming along and then suddenly slashing benefits is a terrible way to run a program. No rational person would endorse this “deal.” Also, trust funders are generally in favor of not only keeping benefit levels where they are, but also raising them. So what they end up arguing for is a one-sided contract in which Congress, the rich or whoever they think took the other side of this contract has an absolute legal and moral obligation to pay benefits exactly as scheduled until the trust funds run out, but after that, beneficiaries will have an additional right, of unspecified origin, to keep getting benefits.

“The deal,” “the bonds,” “the trust fund”—they’re all political tactics, not serious arguments. Unfortunately, what they are most useful for is putting off discussing how we’re going to fix Social Security.

I come from a school of thought that says “the deal” whereby workers get high benefit levels until

suddenly their income drops by 20 percent to 30 percent is a really terrible arrangement, so we should fix it. Let’s change the system, with some combination of phased-in taxes and adjustments to benefit levels, so that no one ever has to deal with a massive benefit cut.

And let’s make it actuarially stable over the long term, so that young workers know what is coming and can plan their retirements accordingly. To us, the trust fund is irrelevant; what matters is deciding how much money is going to go into the government, how much is going to come out, and keeping those amounts roughly in balance.

So here’s a crazy proposal: How about we figure out how to pay for all the benefits we promised, then sit down and have a think about whether there are additional benefits we might also like to pay for? Rather than pointing to untapped taxing capacity as a way to finance new benefits, without asking whether we might need that cash to pay for benefits we already have?

This doesn’t seem that controversial to me, but if you don’t want any benefit cuts ever and think that delaying will mean putting more of the burden on tax hikes, it’s probably better to spend a lot of time talking about whether the trust fund is real.

The exhaustion date of the trust funds has been steadily advancing since the end of the stock market bubble, especially for disability, because the number of beneficiaries has risen dramatically from where it was in the 1980s.

NewsSunday

A6 Sunday, April 12, 2015 • Editor: Vittorio V. Vitug

BusinessMirror

LP lawmaker to Napeñas: Take full responsibility for Mamasapano fiasco

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acked Philippine National Police-Special Action Force (PNP-SAF) Police Director Getulio Napeñas should start acting like a true officer and a gentleman by admitting that he is solely responsible for bungling the Mamasapano raid that killed 44 SAF commandos, and stop dragging other people, including President Aquino, into the mess, Samar Rep. and Liberal Party Secretary-General Mel Senen Sarmiento said over the weekend.

“The Mamasapano operation is his mess. He should stop dragging other people into this because he alone had full control of the operation. He planned the operation and he executed it. Even the people who were involved in the operation were handpicked by him. General Napeñas should [be] man [enough] and start acting like a true SAF commando. Blaming other people for your own mistake is definitely

not one of the characters of a true SAF officer,” Sarmiento said.

“Being the one who planned and executed the Oplan Exodus, Napeñas must accept responsibility. His shortcomings in planning the operation proved fatal and he has nobody to blame but himself.

His failure to obey the directives of his Commander in Chief is the proximate cause of the death of the 44 SAF members,” he said.

The senior House lawmaker said that it was obvious that Napeñas got too “greedy” to own all the credits in the Mamasapano operation and this was the reason he refused to obey a direct order by President Aquino for him to coordinate his efforts to his superiors and to the Armed Forces of the Philippines (AFP), which caused the death of 44 of his men.

“The unquestioned narration of facts stated that the SAF already killed their target at 4:15 a.m., a fact made known to Napeñas 15 min[utes] later. What prevented Napeñas from informing right away the AFP of the mission? Was he driven by greed? The fact that he coordinated only with the AFP at around 5:30 a.m., or an hour after killing Marwan [Zukifli bin Hir] showed that desperation to extract his men being assaulted brought him back to his senses,” Sarmiento said.

“I wonder if the Oplan Exodus was perfectly executed, will he own all the accolades and proclaim to have single-handedly planned it all?” he said.

Sarmiento also opted to report the progress of his operation to suspended PNP Chief Director General Alan Purisima despite the absence of a formal directive

from the President.

“He just assumed that it was okay for him to get his orders from General Purisima for the simple reason that he is a friend of the President. That already shows his lack of prudence in dealing with operations as sensitive as Oplan Exodus,” Sarmiento said.

Sarmiento added that being the chief of the PNP’s most elite unit, Napeñas was expected to be the expert in the tactical aspect of Oplan Exodus and the President counted on him to do everything necessary to ensure the success of their operation and protect the lives of his men.

“Similar to a doctor, it was Napeñas who convinced the relatives of a patient to conduct a surgery. When the surgery fails, the doctor cannot blame the relative or the patient for relying on his expertise in good faith. Following this analogy, President Aquino is just a relative who just wanted the surgery to take place,” Sarmiento added.

He said that President Aquino only issued the order for Napeñas and the SAF to conduct law-enforcement operation against international terrorist Marwan that was the end of his role in the Mamasapano operation. PNA

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POEA canceled permits of 55 recruitment agencies in 2014

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total of 55 recruitment agencies were barred from recruiting and deploying overseas Filipino workers after the Philippine Overseas Employment Administration (POEA) canceled their permits last year.

The POEA ruled to cancel their permits on the account of unethical recruitment practices and violations of Philippine migration laws and regulations.

The list of canceled recruitment agencies for 2014 is as follows: A-M Philippine Professional Services Corp.; Al-Siq International Placement and Manpower Services Inc.; AFT International Manpower Services; Aguila Management and Resources Corp.; Al-Ahram International Group Services Inc.; Al-Sadiq Manpower Corp.; Apex Grande International Labor Agency; Asian International Manpower Services Inc.; Asmara International Placement Agency Inc.; Batie International Manpower Services Inc.; Bobstar International Recruitment Agency Inc.; B & E Overseas Manpower Services Corp.; Chronos International Manpower Corp.; Creative Artist Placement Services Inc.; Dalandan International Manpower Inc.; Dream Fame International Manpower Corp.; Dywen International Manpower Agency; Expeditor International Manpower Services Co.; Experts Placement Agency Inc.; Findstaff Placement Services Inc.; France Asia International Inc.; Global Care International Manpower

Services; Global Unlimited International Manpower Inc.; Globrec Manpower Services Inc.; Gerardo J. Santos Manpower Inc.; Goodman International Manpower Inc.; IDM Manpower Services; InterGlobe Manpower & Consultancy Services Inc.; Jade Jobwell Philippines Inc.; Japhil 2000 International Agency Corp.; Jenar Maritime Inc.; Jovineria Manpower Services; Kabayan Ko Overseas Manpower Placement; Kookies International Recruitment Agency Inc.; Meccaj Manpower International Services; M.G.M International Recruitment Services Inc.; Mind Resources Corp.; Nahed Internationa l Manpower Ser v ices; Non-Stop Overseas Employment Corp.; Pacific Mediterranean International Manpower Agency Inc.; Perfect Employment Agency Corp.;PERT-CPM Manpower Exponents Co. Inc.; Renaissance Staffing Support Center Inc.; Ridzkey Human Resources International Services; Sacred Heart International Services Inc.; Sand-dune International Manpower Services; Saranay Philippines Inc.; Seven Ocean International Manpower Corp.; Sherine Manpower Services Inc.; Sunshine Recruitment Agency Inc.; Sky Top Service Contractors Inc.; Sunshine Recruitment Agency Inc.; Tuem International Manpower Corp.; Wandy Overseas Placement Agency Inc.; and YMC International Manpower Services. PNA

RegionsSunday

www.businessmirror.com.ph • Editor: Dionisio L. Pelayo

BusinessMirror

Duterte twits de Lima over prohibition of allowance for government prosecutors

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ROSECUTORS in Davao City will continue to receive allowances from the local government, despite the directive from the Department of Justice (doj) that prohibits prosecutors from receiving such grants.

Davao City Mayor Rodrigo Duterte said he will not abide by Justice Secretary Leila de Lima’s order.

Speaking during the 27th National Convention of Prosecutors held in Davao City, Duterte said the grant of allowances and other benefits is provided by law.

“I will not adhere with her order,” Duterte said. “Bakit mo tatanggalin iyong nakakatulong?” he added.

“I hope that this [grant of allowances] will be modified simply because it is not good…it is not good to us, mga local officials, because the implication is takot kayo baka may hingin kami,” Duterte explained.

De Lima had said last month during the 15th Integrated Bar of the Philippines Convention in Cebu City that she would issue a directive prohibiting all prosecutors and employees of prosecution services nationwide from receiving allowances and other forms of benefits from local governments. She said it is to ensure that the prosecutors will not feel beholden to local politicians who might affect their independence and partiality in the discharge of their mandate.

But in his keynote speech during the 27th national convention of the Prosecutors League of the Philippines (PLP) at the SMX Convention

Center here, Duterte said de Lima was wrong, since there are laws that allow local governments to give allowances to prosecutors.

Duterte said the order of de Lima is discriminatory, because only prosecutors will be prohibited from receiving the allowance while others, such as judges, can still accept it. “If I may ask, why?

What is the reason you came up with this silly thing?” Duterte said, addressing de Lima.

According to the regional state prosecutor for Southern Mindanao, Antonio Arellano, there are actually three legal bases in which prosecutors are allowed to accept allowances from local governments.

Arellano first cited Presidential Decree (PD) 1275, or the Creation of the National Prosecution Service, which provides that local governments will provide allowances to the prosecutors and employees, “including even the rental for buildings and other requirements on the administration of criminal justice.”

Under section 14 of PD 1275: “The salaries of provincial and city fiscals and their assistants shall be paid entirely out of national funds

and included in the annual appropriations of the DOJ. This is without prejudice to the grant of allowances to the above-mentioned fiscals by their respective local governments, in amounts not exceeding 25 percent of their basic salaries.”

It also stated that the salaries of clerks, stenographers and other subordinate employees in the offices of the provincial and city fiscals shall be paid by the province or city government.

Arellano also quoted Republic Act (RA) 7160, or the Local Government Code of 1991, which allows local governments to provide assistance to the prosecutor’s offices.

“The third is the new law, which was enacted several years ago, that is RA 10071, or the Prosecution Service Act of 2010, which also allows local governments to grant allowances to prosecutors, provided that the allowance will not go beyond 50 percent of their basic salary,” Arellano said.

In addition, RA 9279, or “An Act Granting Additional Compensation in the form of Special Allowances for the Members of the National Prosecution Service and the State

Counsels,” was also enacted, he said.

Under Section 16 of RA 10071, the salaries and allowances of regional, provincial and city prosecutors and their assistants, and the members of the prosecution staff, including the prosecution attorneys, shall be paid entirely out of national funds and included in the annual appropriations of the DOJ. The law, however, adds: “Provided, however, this provision is without prejudice to the grant of allowances to the prosecutors by their respective local governments in amounts not exceeding 50 percent of their basic salaries.”

Arellano said the PLP, the Chief Prosecutors Association and the Regional Prosecutors Council already wrote a letter to de Lima asking her to reconsider the order.

“We are with her in her desire to really come up with higher standards of governance. But we are saying, considering the situation of the prosecution on the field in the regional areas in the regional offices and in the cities and provincial offices, the resources from the national government is very inadequate,” Arellano said. Joel R. San Juan

Batanes first province with zero out-of-school youth

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HE Department of Education (DepEd) recently recognized Batanes as the first province in the Philippines to achieve a zero out-of-school youth (OSY) record. DepEd officials and teachers in the province earlier identified a total of 607 out-of-school young men and women, mostly unemployed or underemployed, and enrolled them under the Abot-Alam Program.

The number of the OSY constitutes 3.5 percent of Batanes’s some 17,000 population.

“Abot-Alam is a nationwide convergence of various government agencies and non-governmental organizations to map out all OSYs in the country and enroll them in programs under education, entrepreneurship and employment,” Education Undersecretary for Partnerships and External Linkages Mario A. Deriquito explained.

“The OSYs are provided with relevant interventions, such as the Alternative Learning System [ALS]. They may also be part of livelihood and skills training programs provided by the Technical Education and Skills Development Authority; higher-education scholarships of colleges and universities through the Commission on Higher Education; employment through the Department of Labor and Employment and partner employers; and entrepreneurship programs through the Department of Trade and Industry, microfinance institutions and NGOs [non-governmental organizations]. In some provinces, cities and municipalities, the local government also offers all or at least one of

these programs,” Deriquito said.

He added, “Crucial to the goal of providing all OSYs with opportunities in education, entrepreneurship, or employment would be partnerships.

Batanes has shown that, through partnerships, we can ensure that OSYs can be presented with opportunities to improve themselves and contribute to their communities.”

Proof of the partnerships formed through the Abot-Alam Program is the full support of the mayors in Batanes’s six towns. “I’m very inspired by Abot-Alam, because it underscores partnerships. Our programs need to be integrated, and we need to help each other,” Mayor Demetrius Paul Narag of Basco said.

Meanwhile, Sabtang Mayor Maxilindo E.A. Babalo, who initially donated P200,000 to help fund the needs of volunteer teachers for the program, committed to double the amount next year. “The foundation of basic education should not be hindered by [lack of] funding,” Babalo said, adding that the local government will continue to support Abot-Alam learners.

“When we met with Undersecretary Deriquito a year ago, we accepted his challenge and in a year’s time, we attained our goal of zero OSYs,” shared Wivina B. Gonzales, acting schools division superintendent of the DepEd’s Batanes Division Office. “We have registered the OSYs and mapped suitable programs for them, and made sure that these programs are aligned with their needs, ensuring the availability of program interventions.”

New princess, old traditions

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NEW princess was recently enthroned in the town of Ditsaan-Ramain, Lanao del Sur. Hadja Fatima Jannah Batua Bayabao Mabaning Dimaporo Urab Dimacaling Mangotara Lantud-Caye Pasandalan was enthroned as the new Bai sa Bayabao.

(Bai is the M’ranao word for princess.)

Officiating the ceremony were the sultans of Ditsaan-Ramain, headed by Sultan Patadau Bayas and Sultan Gafar Punguinaguina, togetherwiththesevenmembersoftheMaruhom (Council of Sultans) of Ditsaan-Ramain, at the Adiong Memorial Polytechnic School.

“Let us become righteous as demanded by our religion, a person of knowledge and nobility while being aware of and living up to obligations to the country,” asked Bai Fatima Jannah, as she is fondly known. The new bai wore a yellow native-inspired gown—a long dress in yellow silk gazar decorated with crystals and cut beads on the bodice and on the bell sleeves. It was designed by Manila-based fashion designer James Reyes.

Her mother, Bai Alabi sa Timbab Mayor Eleanor Dimaporo Lantud of Pantao Ragat, and brother, Sultan sa Cabasagan Ayran D. Lantud, and other relatives, attended the ceremony.

Sunday, April 12, 2015 A7

Koko seeks probe into large number of local execs facing graft charges

By Recto Mercene

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EN. Aquilino “Koko” Pimentel III on Saturday sought an inquiry into the Ombudman’s report that for four consecutive years since 2011, local officials had the most number of cases before the antigraft body.

Pimentel said pursuant to the strong anticorruption mandate of the Constitution, the Ombudsman was created to repress certain acts of public officers and private persons alike constituting graft or corrupt practices.

He cited Article XI, Section 27 of the Constitution that provides, “The State shall maintain honesty and integrity in the public service and take positive and effective measures against graft and corruption”; while Article XI, Section 1 states, “Public office is a public trust.”

In a statement, Pimentel said that it has become imperative to conduct an inquiry into the report “to find out the varying forms of graft and corrupt practices,” in view of his proposed “Bigger Pie, Bigger Slice” bill that would bring more resources to local governments.

“Before this bill becomes a law, positive steps must be taken to fight and eventually eradicate corruption at the local level,” Pimentel said.

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Sunday, April 12, 2015

PCTO: ‘Shady’ law impedes govt drive to boost Internet connection

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By Lorenz S. Marasigan

T seems that the government is on the losing end in its battle to boost the quality of Internet connection in the Philippines, partly because, by law, the move is “shady” in nature.

The Philippine Chamber of Telecommunications Operators (PCTO) is strongly opposing the idea of regulating Internet services in the country by imposing minimum speeds for each broadband connection. Currently, the Internet is considered a value-added service, hence, deregulated.

Should the government pursue its goal of imposing minimum broadband speeds for various Internet products, the state would have to break the law and face the consequences. Or, it has to amend the Philippine Telecommunications Act to suit its proposals.

But the idea irks industry players, according to the chamber, as this should also require the government to pump in money to build infrastructure that would strengthen the Internet connection in the country, something that developed countries like Japan have been doing.

The National Telecommunications Commission (NTC), in a draft memorandum, proposed that the different broadband products be subject to regulation.

Specifically, the draft memo read that wireless broadband, or over-the-air connectiv-

ity, should have a theoretical downstream data rate of at least 1 megabits per second (Mbps) and a theoretical upstream rate of at least 768 kilobits per second (kbps).

Wireline broadband, or Internet connectivity via terrestrial landline networks, should have at least 2 Mbps of downstream data rate and an upstream data rate of 1 Mbps.

Dial-up Internet, meanwhile, should have a downstream data rate of 56.6 kbps and an upstream data rate of 48.8 kbps.

Downstream and upstream data rates are simply the download and upload speeds.

Requiring these, however, would mean a depletion in resources for private companies and smaller players in the telecommunications arena.

“As of now, the lack of available bandwidths in the countryside impedes the growth of Internet access there. The commission will kindly note that countries that have adopted such minimum bandwidth policies are mostly developed countries, with a naturally more mature broadband infrastructure, whose growth was significantly enhanced by counterpart government investments to those made by the private sector,” PCTO said.

The chamber, while warning the regulator to “tread on the matter with utmost caution,” also casted doubt on the memo See “Shady Law,” A2

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China says it’s a ‘robust force for peace’ in South China Sea

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EIJING—China said on Friday it only seeks peace in the South China Sea (West Philippine Sea), rejecting comments

by President Barack Obama that Beijing is using its muscle to intimidate neighbors in a region where US officials say China also is aggressively creating artificial land to bolster its position.

Foreign Ministry Spokesman Hua Chunying said that China advocated talks to resolve tensions between rival claimants to the strategic waters and island groups that sit astride some of the world’s busiest shipping lanes, rich fishing grounds and potentially huge mineral reserves.

CHINA

Hong Kong

Artificial islands

China is building artificial islands in the contested Spratly Islands area.

LAOS

PHILIPPINES

THAILAND

CAMBODIA

Manila

VIETNAM

Mischief Reef

Ho Chi Minh City

Spratly Islands

CHINA 250 km

DETAIL AREA

“I think you will agree with me that China has been a robust force for the preservation and promotion of peace and stability in the South China Sea,” Hua said.

Obama said on Thursday that the US is concerned that China is not abiding by international norms, and is using its “sheer

250 miles Source: Asia Maritime Transperancy Initiative Graphic: Tribune News Service

size and muscle” to bully smaller claimants, such as the Philippines and Vietnam.

“We think this can be solved diplomatically, but just because the Philippines or Vietnam are not as large as China doesn’t mean that they can just be elbowed aside,” Obama Continued on A2

Cebu City Devt Council approves ₧3.5B worth of infra projects for implementation this year

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EBU CITY—The Cebu City Development Council (CCDC) infrastructure committee has approved some P3.5 billion worth of infrastructure projects proposed by the Department of Public Works and Highways (DPWH)-Cebu City Engineering District for 2015.

The projects include the rehabilitation of Colon Street for P120 million and the widening of Archbishop Reyes Avenue for P128 million.

Also included are the widening of the Bacayan-Pit-os Road for P170 million; and the construction of a flood-mitigation structure along Estero Parian on Colon Street and on Jakosalem Street from Imus Road to Parian Creek at P160 million each.

The DPWH also plans to construct an engineering district building in Barangay Tinago for P30 million and a multipurpose building inside the Vicente Sotto Memorial Medical Center compound in Barangay Sambag II for P25 million.

Projects for the Cebu City south district, on the other hand, include the road right-of-way acquisition in Barangay Basak San Nicolas and the construction of a “depressed intersection” at the N. Bacalso Avenue-F. Llamas Street junction, totaling P400 million.

Some P400 million was proposed to widen the city’s natural waterways and P120 million for dredging of Kinalumsan River and rip-rap installation on its banks.

Other projects include the widening of C. Padilla Street from the Carlock Street intersection to the South Road Properties Access Road for P267 million, the widening of the access road from the V. Rama Avenue junction in Barangay Guadalupe to Doña Modesta Gaisano Street in Barangay Lahug for P210 million, and the stretch of N. Bacalso Avenue, from Santo Tomas de Villanueva parish church to the Bulacao Bridge for P300 million.

All these projects were endorsed to the CCDC full council for its approval.

Upon approval, the proposal would be endorsed to the Cebu City Council, before endorsing it to the Regional Development Council 7, which would either turn it down or endorse it to the national government for funding. PNA

Lawmakers push JobStart PHL Program

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awmakers have moved to institutionalize the nationwide implementation of the JobStart Philippines Program to enhance the knowledge and skills acquired in the formal education or technical training of Filipino jobseekers.

Reps. Karlo Alexei B. Nograles of the First District of Davao City; Emmeline Y. Aglipay Villar of Diwa Party List; Florencio T. Flores Jr. of the Second District of Bukidnon; and Deogracias B. Ramos Jr. of the Second District of Sorsogon, authored House Bill 5468, which seeks to provide jobseeker-trainees with a venue to apply relevant theories and code of ethics within a conducive and safe work environment.

Nograles, chairman of the House Committee on Labor and Employment, said the Department of Labor and Employment (DOLE) launched in May last year the JobStart Philippines Program, a remedial undertaking aimed at assisting the at-risk youth, improving their schoolto-work transition and increasing their chances of integrating into productive employment.

Funded by the government of Canada and with technical assistance from the Asian Development Bank, the project was undertaken in General Trias, Cavite; San Fernando, Pampanga; Taguig City and Quezon City, Nograles said.

“The pilot project included 3,200 program beneficiaries and the development of model full-cycle employment-facilitation services at the local level, benchmarking good practices from Kenya, Chile and the United States,” according to Nograles.

Aglipay-Villar said the bill aims to replicate the success of the JobStart Program

and cascade it on a national scale, covering at least 70,000 JobStart Program beneficiaries by 2020.

“Public Employment Service Offices [Peso] will be able to offer enhanced employment facilitation services and an improved local labor market information system,” Aglipay-Villar said.

“Given the country’s employment thrust to address the job-skills mismatch and facilitate the smooth transition of graduates and trainees to the work force, it is deemed imperative to institute reforms to modernize the Peso’s and implement a nationwide youth-employment program that enhances the employability of jobseekers and assists their integration in the labor force,” Aglipay-Villar said.

The measure requires program participants to be 18 to 24 years old at the time of the registration period; at least a highschool graduate; not employed, studying, or undergoing training at the time of the registration; and with less than one year or no work experience.

The program shall include full employment-facilitation services, such as registration or client assessment, one-on-one career guidance, life skills and technical training, job matching and referrals either for further technical training or for employment in an establishment.

The DOLE, as the executing agency of the program, shall establish a JobStart unit at the Bureau of Labor and Employment to be headed by a program manager, who shall provide the necessary technical and administrative assistance to concerned regional and field offices and Peso’s.