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Thursday, February 4, 2016 Vol. 11 No. 119
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PPP Act, SSL 4 left hanging as solons end 16th Congress
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INSIDE
he House of Representatives concluded the last session day of the 16th Congress with mixed results, ratifying two priority bills but leaving the proposed Public-Private Partnership (PPP) Act, amendments to the Foreign Investment Negative List (FINL) and the Salary Standardization Law (SSL) 4 in limbo.
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makati mayor orders probe into cat killings in dasmariñas village
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EW YORK—With Super Bowl on Sunday less than a week away, a flurry of advertisers, including Budweiser and LG Electronics, have already released their game-day ads in the hopes of stoking excitement and building up shares on social media. Because ads cost up to $5 million per 30 seconds, advertisers are looking to extend buzz to make their investment pay off. “More than ever, we’re seeing very elaborate pregame efforts to generate interest,” said Tim Calkins, a marketing professor at Northwestern’s Kellogg School of Management. Here’s a look at 10 spots that advertisers have released ahead of Sunday’s game on CBS:
hursday, February 4, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana
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AvocAdos from mexico
THE trade group that promotes Mexican avocados has a quirky ad showing aliens in a museum appreciating human culture, including a Rubik’s Cube and actor Scott Baio.
BmW
CELEBRITIES such as Harvey Keitel and Serena Williams call the new Mini Clubman car different names like “chick car” and “short man’s car” before urging viewers to “Defy Labels.”
BudWeiser
ACTRESS Helen Mirren calls herself a “notoriously frank and uncensored British lady” and lectures drunken drivers about why it’s a terrible idea.
Heinz
TO the tune of Harry Nilsson’s “Without You,” weiner dogs dressed up like hot dogs run excitedly toward people in ketchup costumes.
‘IT’S NOT AN ISSUE’
HondA
SHEEP in a meadow sing Queen’s “Somebody to Love,” until their owner and a sheep dog drive up in a new Honda Ridgeline, which is also blasting the song.
LG
LIAM NEESON talks about the future in a sci-fi spot directed by Ridley Scott’s son, Jake Scott, to promote an LG TV.
Pokemon
POKEMON’S ad for its 20th anniversary was shot in Rio de Janeiro, Brazil, and empowers children to “Train On.”
sHockToP
SILICON Valley actor TJ Miller trades insults in a bar with the orange-slice mascot for Anheuser-Busch’s wheat beer.
sunTrusT
ACTOR Gary Sinese urges people to let go of financial stress, “let go and breathe” and have financial confidence.
T-moBiLe
CELL phone execs ask the rapper Drake to change the lyrics to “Hotline Bling” to sound more like a cell phone contract. AP
BrAndT snedeker and his caddy discuss options while waiting to tee off on the 18th hole at Torrey Pines during the final round on sunday. AP
BusinessMirror
mini usA shows a still from the company’s super Bowl 50 “defy Labels” ad spot featuring tennis star serena Williams’s handmade decorations, including a centerpiece crafted from inexpensive clay pots painted with white “football laces” lines and filled with grocery-store flowers add more flavor to the super Bowl. AP
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By Barry Wilner The Associated Press
AN JOSE, California—Cam Newton wants any discussion of black quarterbacks in a Super Bowl put away. The Carolina Panthers quarterback on Tuesday emphatically tried to lay to rest any relevance of an African-American quarterback appearing in the National Football League’s (NFL) championship game. During a series of questions by a media member that bordered on confrontational, Newton finally said to the reporter: “It’s not an issue. It’s an issue for you.” Carolina’s All-Pro quarterback, seemingly tired of the topic, added: “We shattered that a long time ago.” This was the third time Newton had to deal with the subject since the Panthers made the Super Bowl. He didn’t need to point out that several other black quarterbacks have led their teams to the big game: Doug Williams, Steve McNair, Donovan McNabb, Colin Kaepernick and Seattle’s Russell Wilson the past two years. “I don’t even want to touch on the topic of ‘black quarterback’ because this game is bigger than black, white or even green,” the fifth-year Panther said. “We limit ourselves when we just label ourselves just black this, that.... I want to bring awareness because of that, but yeah, I don’t think I should be labeled just a black quarterback. It’s bigger things in this sport that need to be accomplished.” Speaking at a media session ahead of this weekend’s NFL decider, Newton said race was relevant only in his ambition to be role model for children. “When I go places and I talk to kids and I talk to parents and I talk to athletes all over, they look at my story and they see a person—African-American or not—they see something that they can relate to. They see a guy who went a different route than just going to a major Division I school and flourishing there. “But I just want to become relatable, you know what I’m saying? It’s bigger than race. It’s more so of opening up a door for guys that don’t want to be labeled, that have bigger views and say: ‘Well, I’m in this situation, I’m living in this environment right now, but I also want to be an artist, I want to be a poet. But I don’t have the means, you know, to necessarily do the right things at that point.’ “As for me, I just want to give those people hope.” Lady Gaga, meanwhile, is set to sing the national anthem at the Super Bowl on Sunday. The NFL told the Associated Press on Tuesday that Gaga will sing “The Star-Spangled Banner” at Levi’s Stadium in Santa Clara, California, where the Carolina Panthers will take on the Denver Broncos. Academy Award winning actress Marlee Matlin will perform in American Sign Language during the national anthem. Super Bowl 50 will air on CBS, and halftime show performers include Coldplay and Beyonce. Gaga’s upcoming performance during the Super Bowl is another notch in her belt: She won a Golden Globe for her role in American Horror Story: Hotel last month and she’s nominated for best original song at the Academy Awards on February 28 with “Til It Happens to You,” the song she wrote with Diane Warren for the sexual assault documentary, The Hunting Ground. The song is also nominated for a Grammy at the February 15 awards show, where Gaga will pay tribute to David Bowie with a performance. Last year Gaga wowed audiences at the Oscars when she paid tribute to “The Sound of Music” with a show-stopping performance. She won her sixth Grammy for her collaborative jazz album with Tony Bennett, and she was named woman of the year by Billboard. Tony-winning actress and “Let It Go” singer Idina Menzel sang the national anthem at last year’s Super Bowl.
PerfecT endinG for snedeker S
AN DIEGO—Nothing brings out hindsight in golf like the weather. One year when the Match Play was in Arizona, the opening round was delayed by snow that covered Dove Mountain. And while it took five hours the next day for the snow to clear, Professional Golfers’ Association (PGA) Tour officials told players to be at the course in the morning in case it melted earlier. One player was furious. He said there was no way the course would be ready by noon, tour officials knew it and there was no reason for players to have to wait around. Fair enough. But if he was so certain of this, why not just stay at his hotel? The player said he couldn’t risk not being at the course on the odd chance it was ready—the very logic used by the rules officials. These guys are good. But they are the best in the world at playing golf tournaments, not running them. Brandt Snedeker was tempted by hindsight after one of the great final rounds on the PGA Tour on Sunday. He closed with a three-under 69 at Torrey Pines in rain and gusts that consistently topped 40 miles per hour. He went the final 17 holes without a bogey. He shot 32 on the back nine. His longest par putt was 3 feet. Snedeker, who started the final round in a tie for 27th, was one shot behind and looking good when he finished. The leaders still had to play the back nine. A short time later, however, the horn sounded to suspend play and everyone came in off the course. Suddenly, Snedeker’s odds seemed to get longer. “Weather looks perfect to me outside!!” he tweeted.
Was he joking? Not entirely. “Last night if you had seen the texts between me and my brother... ‘I can’t believe they called it,’ and ‘I got hosed,’ and ‘Maybe it will be a good thing,’” Snedeker said on Monday after his one-shot victory. “And my caddie kept saying, ‘Don’t worry about it. Maybe it will work out.’ This morning when I woke up it was, ‘We’re done, I’ve got no chance.’ And then the break of a lifetime. The wind is pumping into them the last five holes. You can’t make this stuff up.” It was the perfect storm—bad weather, great golf—to make up a six-shot deficit. As wild as it seemed to Snedeker, that’s what the rules staff had to rely on to make their decisions. There was a mixture of disgust and irritation in the locker room on Sunday afternoon when play was suspended for the third and final time. Players dealt with the wretched conditions all day, and about half of those who finished couldn’t break 80. And, yet, it was clear that some were angry on behalf of Snedeker. They were in awe of his score and wanted to see it rewarded. To stop play meant a chance the leaders would have calm conditions in the morning. Charley Hoffman, tied with Snedeker going into Sunday until he shot an 80, went so far as to post on Instagram, “Rules staff absolutely botched [Farmers Insurance Open]. Whole field could have finished today. Rules officials need to be held accountable. Sorry CBS.” Or maybe that was his idea of campaigning to be chair of the Players Advisory Council. Voting ends in two weeks. Hoffman never explained what was botched. The two delays on Sunday morning were a combined 1 hour and 35 minutes, so it’s not like the round would have finished,
anyway. Mark Russell, the tour’s vice president of rules and competition with 35 years of experience behind him, no doubt would love to see players make these decisions. Because whether play was halted, someone was going to complain. Snedeker was asked if he thought he could a run tournament. The answer was quick even by his standards. “No,” he said with a big grin. “The thing I realize, that most guys on tour realize, is these officials do the best they can. They’re out there 15 hours a day. The forecast is what it is, and sometimes you can’t guess right.” Stopping play for the final time on Sunday, which looked like a bad break to Snedeker at the time, appeared to be the right guess. An hour after play was stopped, tents came undone and light fixtures dropped from the rafters. About a dozen trees were toppled, including one left of the 18th fairway where fans typically watch the long approach to the green. Snedeker said he tries not to be critical of rules officials because “it’s an imperfect science.” He also is honest. “Now that being said, if I had come out here this morning and it was perfect, and I lost the tournament, I would have questioned why we spent an hour and a half in a rain delay when nothing had changed,” he said. “It would have affected my final standing in the tournament.” It worked out for him. He even felt bad for the leaders for getting “the raw end of the stick.” And then he summed up a wild day of weather with one comment that should remind everyone they are playing an outdoor sport. “That’s just the way golf goes.” AP
sports
The Andrew Tan-owned Resorts World Manila is one of the top private casino operators that contributed 65 percent of the P125-billion Philippine gaming revenue last year.
Meralco: Feb gen charge up
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Left for dead, meanwhile, were the resolution overriding the presidential veto on the P2,000 pension hike for Social Security System (SSS) members and the proposed Bangsamoro basic law (BBL). The lower chamber failed to act on House Bill 6631, or the PPP Act, which it recalled on Tuesday evening following a late Continued on A2
‘IT’S NOT AN ISSUE’ MAXIMUM EXPOSURE
By Jovee Marie N. dela Cruz
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B y Lenie Lectura
OWER generation charge for this month is expected to go up, a Manila Electric Co. (Meralco) official warned on Wednesday. “We expect the generation charge this February to be higher than January’s rate,” Meralco Head of Utility Economics Lawrence Fernandez said in an interview. Generation charge, the largest component of an electric bill, stood at P3.92 per kilowatt-hour (kWh) last month. This is lower by P0.21 per kWh from December last year, and the lowest since January 2010. According to Fernandez, the cost in January was pulled down by capacity-fee adjustments from plants under the power sales agreements
We expect the generation charge this February to be higher than January’s rate.”—Fernandez (PSAs). “This is part of an annual reckoning or true-up of the use of outage allowances by the generation company,” the Meralco official said. “We will no longer have this negative adjustment in the February generation charge.” He said that, without the onetime outage allowances adjustment, the January generation-charge reduction would have been a “P0.07per-kWh increase” instead. Meralco will announce actual figures on Friday, according to Fernandez. He noted the many power plants
that went on forced shutdown and scheduled shutdown last month did not affect electricity prices. “While there are several power-generation units on maintenance outages, and while other units experienced forced outages, the supply-demand situation remained normal.” Based on earlier data provided by Meralco, the power plants scheduled for maintenance shutdown last month include the Calaca 1 and 2 (600 megawatts) power plants, the Masinloc 1 (315 MW), the Santa See “Meralco,” A2
Philippine-born actress leads SoKor immigration debate
1.9M
Number of foreign residents in South Korea, twice the total in the past decade
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he more famous Jasmine Lee became in South Korea —first as a Philippine-born movie star and then as the country’s first naturalized legislator—the more she became a lightning rod for debate about immigration. Recruited four years ago to represent the ruling Saenuri Party as a proportional representative in parliament, Lee has become an
PESO exchange rates n US 47.7300
outspoken campaigner for immigration in a society that prides itself on ethnic homogeneity. While she’s regularly the target of racially based online attacks, Lee has also provoked a robust discussion on national identity, as the country confronts the reality of a shrinking work force as its population ages and the birthrate declines. Policy-makers, who for decades
stressed the importance of preparing for eventual unification with North Korea, are waking to a more immediate problem: How to stoke economic growth as the number of South Koreans aged 15 to 64 peaks at 37 million this year and then begins to steadily drop. After the rapid gains in efficiency that saw the rise of industrial
GOVT SETS $300-MILLION TAG FOR CASINOS OUTSIDE MANILA
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he Philippines is open to issuing gambling licenses outside the capital of Manila and plans to require the minimum investment for new casinos at about $300 million to ensure world-class properties are in provincial cities and towns, its gaming regulator said. “There are areas which I think are very ripe for a casino,” Cristino Naguiat, chairman of the Philippine Amusement and Gaming Corp. (Pagcor), said in an interview, declining to disclose those locations. The agency is “open to giving out a casino license if it can help boost economic activity and if the people in the area want it. We’re developing a template to ensure that no one would be granted a license unless an investment commitment is made.” The Southeast Asian country, which is aiming to compete with Macau and Singapore casinos amid plunging revenues, has already allowed four resorts being built in the 120-hectare seaside Entertainment City complex in the capital with a minimum investment of $1 billion each. Japanese tycoon Kazuo Okada will be constructing the country’s biggest property in the Las Vegasstyle casino hub by spending as much as $2 billion.
$2.83B
Estimated Philippine gaming revenue this year
The minimum investment, which could vary depending on the location, will likely be implemented by the new president after incumbent leader Aquino’s six-year term ends in June, Naguiat said. Mr. Aquino’s administration followed his predecessor Gloria MacapagalArroyo’s guidance on investment requirements for the casinos operating in the Entertainment City.
Competition created
“They are trying to replicate Entertainment City on a smaller scale. This will create competitors,” saidJonathan Ravelas, chief market strategist at BDO Unibank Inc. “Operators in Entertainment City will have to be on their toes because if they are complacent it’s not impossible that some of the traffic will go to these provincial casinos if the properties are world class.” See “Casinos,” A2
Continued on A3
n japan 0.3977 n UK 68.7932 n HK 6.1287 n CHINA 7.2538 n singapore 33.4033 n australia 33.7887 n EU 52.1212 n SAUDI arabia 12.7280
Source: BSP (3 February 2016 )
BMReports BusinessMirror
A2 Thursday, February 4, 2016
PPP Act, SSL 4 left hanging as solons end 16th Congress Continued from A1
appeal made by Senior Deputy Minority Leader and Bayan Muna Rep. Neri Colmenares. According to Colmenares the approval of HB 6631 violated Section 28, Article VI of the 1987 Constitution, which, he said, clearly states that “no law granting any tax exemption shall be passed without the concurrence of a majority of all the members of Congress.” Only 136 congressmen voted during the third-reading approval of the PPP bill on Monday. With the House of Representatives rolls showing a total membership of 291, HB 6631 need to be passed on third and final reading by 146 congressmen. “Even if my motion is lost, I believe my objection will be upheld by the Supreme Court because the Constitution clearly requires for a vote of majority of all members, not just those present during the session,” Colmenares said. The measure institutionalizing and strengthening the PPP, principally authored by Speaker Feliciano Belmonte Jr., seeks to recognize the indispensable role of the private sector as the main engine for national growth and development, create an enabling environment for PPP. The measure also seeks to provide the most appropriate incentives to mobilize private resources for the purpose of financing, design, construction, operation and maintenance of infrastructure projects and services normally financed and undertaken by the government.
Pension hike
The House also failed to override the presidential veto on SSS bill increasing the pension of SSS members by P2,000, which the so-called Makabayan bloc lobbied for.
Colmenares said the P2,000 pension hike is very reasonable and is badly needed by pensioners and their dependents. Last month President Aquino vetoed the enrolled HB 5842, which provides for a P2,000 across-the-board increase in the monthly pension of SSS pensioners and adjustment of the minimum monthly pension from P1,200 to P3,200, for members who have contributed the equivalent of 10 credited years of service (CYS), and from P2,400 to P4,000, for those with at least 20 CYS. The President was worried that the stability of the SSS would be compromised if he would allow the pension hike of 2.1 pensioners. Under Article VI, Section 27 of the 1987 Constitution, the Congress can pass a bill into law despite the President’s veto if two-thirds of the members of each chamber would vote for its approval.
In limbo
Meanwhile, the chance of the proposed SSL 4 of becoming a law is now dimmer, as the congressional bicameral conference committee still failed to end the impasse on the measure. The House leadership did not change its position suspending the indexation of the pensions of retired uniformed personnel. Sen. Antonio Trillanes IV said the Senate wants to include the pension of veterans and retired military and uniformed personnel in the coverage of the bill subject to availability of funds. The lower chamber also failed to ratify a measure allowing foreigners to own 100 percent of adjustment companies, lending companies, financing companies and investment houses. The measure also seeks to amend “The Insurance Code” for adjustment companies, “The Investment Houses Law” for investment houses, “Lending Company
Regulation of 2007” for lending companies and “Financing Company Act of 1998” for financing companies. According to Majority Leader and Liberal Party Rep. Neptali Gonzales II of Mandayulong the Congress may still approve these bills when session resumes from May 23 to June 10. “Don’t think life of Congress will end this Wednesday; we will resume session in May [or after election],” he said. Based on the legislative calendar, Congress sessions shall adjourn on February 3 as part of its preparation for the national and local elections in May.
Dead bills
The President Aquino-backed BBL is now dead, as the lower chamber went on break without approving it. Congress has been under intense pressure to approve the bill following the Mamasapano encounter between Philippine National Police-Special Action Force (SAF) commandos and Moro Islamic Liberation Front (MILF) members. The BBL failed to hurdle plenary deliberations at the House. Other bills left for dead were the Resolution of Both Houses No. 1, or the economic Charter change; rationalization of fiscal incentives, freedom of information bill, anti-political dynasty bill, the bill lowering individual income tax rates, amendments to the Bangko Sentral ng Pilipinas Charter and the bill creating the Coco Levy Trust Fund.
Ready for signature
The measures readied for the President’s signature, meanwhile, the bill extending the Agricultural Competitiveness Enhancement Fund (ACEF) to 2022 and the bill exempting raw cane sugar from the value-added tax (VAT). These bills will
be transmitted to President Aquino for signature. The ACEF bill is seen to help significantly raise farm productivity levels by providing the necessary support services to the agriculture sector. The measure exempting raw cane sugar from VAT, meanwhile, mandates a single definition for “raw cane sugar.” “For this purpose, notwithstanding the process/es involved in its productions, ‘raw sugar or raw cane sugar’ means sugar whose content of sucrose by weight, in the dry state, corresponds to a polarimeter reading of less than 99.5 degrees,” the bill said. If passed into law, the bill would override Bureau of Internal Revenue’s Revenue Regulation No. 8-2015, which stipulated that a sugar product must have undergone one stage of filtration and centrifugal process to be considered “raw cane sugar.” The lower chamber, meanwhile, adopted the Senate-approved version of the measure extending the life of the Human Rights Claims Board by two years until May 12, 2018, to give all legitimate martial-law, human-rights victims access to recognition and reparation.
Casinos. . .
news@businessmirror.com.ph
Meralco. . .
Continued from A1
Rita Module 10 (257.3 MW), the Santa Rita Module 40 (264 MW) and the Santa Rita Module 30 (265.5 MW). Meralco Spokesman Joe Zaldarriaga earlier warned of higher power rates in the succeeding months as more power plants are scheduled for maintenance shutdowns. “Rates are bound to be affected by the simultaneous scheduled plant outages and the expected increase in demand due to the reported impact of El Niño,” Zaldarriaga said in a text message. Eight power plants in Luzon with a combined capacity of over 4,500 MW are scheduled to implement maintenance shutdowns this year. Based on this list, more than 700 MW of capacity from three power facilities in Batangas are on scheduled outage for the month of August. These are the 190-MW Ilijan combined-cycle power plant 2, the 330-MW Calaca coal-fired thermal power plant 1 and the Santa Rita combined-cycle natural gas plant Module 20, which has a generating capacity of 255.7 MW. For September, there is almost 600 MW of powergenerating capacity coming from Santa Rita Module 30 and Calaca 1 that would be shaved off from the grid. The 647 MW Sual 1 Power Station in Pangasinan will also be out during October and November this year. “As mentioned by Oscar Reyes, the scheduled outages are bunched up in January and the months of August and September, with one unit of Sual going out from October to November,” Fernandez said via electronic mail.
Continued from A1
Bloomberry shares fell 4.5 percent at P4.25 at the close of trading in Manila, the biggest loss in more than two weeks and halting a three-day rally. Melco Crown Philippines Resorts Corp., operator of City of Dreams Manila, sank 5.2 percent, its biggest retreat in two weeks. Travellers International Hotel Group Inc., which will open a casino in Entertainment City by 2020, slid 1.1 percent. The benchmark Philippines Stock Exchange Index lost 1.8 percent. The regulator, or Pagcor, also runs 13 casinos in the country, 10 of which are outside Manila. Philippine gaming revenue is expected to more than
double this year’s estimated P135 billion ($2.83 billion) by 2025 when all four projects are operating, the regulator said. Philippine billionaire Enrique Razon’s Bloomberry Resorts Corp. was the first to open in the hub in 2013, followed by the project of Macau operator Melco Crown Entertainment Ltd. which opened a year ago. Okada’s casino is scheduled to start operations in December, while Westside City Resorts, a venture of Philippine billionaire Andrew Tan and Malaysian billionaire Lim Kok Thay, may open by 2020, Naguiat said in Manila on February 1.Bloomberg News
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Coal plants: Kiss of death to host communities–Greenpeace report D By Jonathan L. Mayuga
eaths due to stroke, heart and other cardiovascular diseases, and respiratory illnesses due to air pollution may go up from the current 960 annual premature deaths to 2,410 deaths per year, with the construction and operation of more coal power plants in the Philippines, a Greenpeace report said.
The report—Coal: A Public Health Crisis (Diseases and deaths attributed to coal use in the Philippines)— was released on Wednesday at a news conference in Manila by environmental and public-health interest groups to warn the government and the public about the health impacts of existing coal-fired power plants and the plan to construct more in the future. “Results of the research show that coal-fired power plants expose everyone in the Philippines to toxic pollution, resulting in hundreds of premature deaths every year,” said Lauri Myllyvirta, senior global coal campaigner at Greenpeace International and also one of the authors of the report. “Leading economies from the United States to China and Europe are already relying on modern, renewable energy sources for their additional power needs, showing that this is a real option for the Philippines, as well,” Myllyvirta said. According to Greenpeace, more than one-third of the energy used to generate electricity in the Philippines come from burning coal. Currently, the country has 17 operational coal plants, with 29 more approved by the Department of Energy (DOE), set to begin commercial operations in 2020. The report is based on a research carried out at Harvard University on the impacts of emissions coming from coal-fired power plants on the air quality of selected coun-
tries in Asia. For the Philippine version, Greenpeace collaborated with HealthJustice-Philippines to write the report, with support from Health Care Without Harm-Asia and the Philippine Movement for Climate Justice (PMCJ). Coal use harms the environment and public health at every stage of its life cycle. Coal-fired power plants emit sulfur dioxide (SO2), nitrogen oxide (NO2) and other gaseous pollutants in the air that can react chemically to form particulate matter that is 2.5 micrometer in diameter. Aside from generating particulate matter, coal combustion also affects health indirectly by contributing to greenhouse-gas emissions. Climate change can bring extreme heat, lead to natural disasters and, eventually, increase diseases transmitted through insects, such as malaria and dengue. The study evaluated 13 operational coal-fired power plants in the Philippines with a combined installed capacity of 3,799.10 megawatts (MW), as well as the potential impacts of plans to build 29 new coal-fired power plants, with a total capacity of 11,700 MW, which could dramatically increase levels of sulfur dioxide, nitrogen oxide and PM 2.5 emissions. “This pioneering study is an important addition to the growing body of health and scientific research on the adverse impacts of coal-fired power plants, not only to the environment, but to human health, as
KILL COAL Greenpeace campaigners do the thumbs down gesture to indicate rejection of coal usage in the Philippines at the Manila press launch of the Harvard Coal Report, which said that coal-plant emissions could kill about 2,400 Filipinos per year. ALYSA SALEN
well,” said Reuben Andrew Muni, climate and energy campaigner for Greenpeace Philippines. “We strongly recommend for the DOE, the Department of Health and other policy-makers to read the report and take heed its warning as it presents a strong case on why the Philippines should end its dependence on coal-generated electricity now, not only for economic, environmental and climate-change reasons, but on public-health grounds, as well,” Muni said. “This new study just confirms what we already know about the health effects of coal based on international evidence. For the longest time, we have been ignoring the environmental case for the phaseout of coal. I hope that this time, the public-health argument
2,410 feared number of annual premature deaths in the country due to construction of more coal-fired power plants, according to Greenpeace
will convince us that coal is not the way to go toward a clean, sustainable and healthy energy future,” said Dr. Renzo Guinto, campaigner for the healthy energy initiative at Health Care Without Harm-Asia. “New coal plants are a lose-lose
proposition for the public. Increasing dependence on coal will consign us to dirty air for 30 or more years, as coal gets more expensive, and other countries abandon it as an energy source. There is a way out of this vicious cycle. We must embrace renewables through a strong, health-driven energy policy,” said lawyer Ipat Luna, a trustee of HealthJustice-Philippines. “Coal burning is a proven nuisance to health and the climate. The more coal plants and mines are commissioned by the government, the more people and communities are placed in the direct path of perdition. Undoubtedly, it is a kiss of death to host communities and vulnerable nations like the Philippines. We, thus, demand for a moratorium on new coal plants, phaseout of existing ones and for a
just transition to renewable energy options,” said lawyer Aaron Pedrosa, Sanlakas secretary-general and PMCJ Energy Working Group head. Considering the Philippines’s rising population, poor health outcomes and the scarcity of resources needed to adapt to the worst effects of climate change, Greenpeace recommends that the country should end its heavy dependence on coal as an energy source and accelerate initiatives involving renewable energy (RE) resources to meet its energy demands. RE is emerging as the energy of choice for an increasing number of communities and local government units. The report recommends that the government phases out the use of coal and fully embrace RE sources in the Philippines based on publichealth considerations.
immigration debate BOI-registered real-estate Philippine-born actress leads SoKor Lee’s journey projects drop 8.3 percent to ₧43.9 billion in 2015 Continued from A1
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nvestments in low-cost and mass housing projects dropped 8.3 percent to P43.9 billion in 2015 against 2014 figures of P47.9 billion, the Board of Investments (BOI) data showed. Despite the decline, the BOI said real-estate projects cornered the second-biggest share of total investment pledges in 2015, next to energy and electricity projects. The BOI-registered projects worth P366.7 billion in 2015 were 3 percent higher than the previous year’s P354.7 billion. Of the total investments last year, 12 percent went to the real-estate sector. For 2014-2015, the BOI said 220 real-estate projects were registered, which are projected to generate 49,832 jobs. Since 2014 the BOI has been carefully scrutinizing mass housing projects for approval, as it began conducting a parallel monitoring system to ensure that previously approved mass housing projects have complied with the requirement that 20 percent of the project cost be allocated to actual construction of socialized mass housing units, rather than
other modes of compliance. Five of the biggest projects in terms of value in the past two years came from SM Development Corp. (SMDC). SMDC’s largest BOI-registered project since 2014 is its Shore Residences Tower C and Tower D worth P5.86 billion. This was an expansion of Shore Residences Tower A and Tower B, which were registered at the cost of P2.8 billion. SMDC’s Shore Residences is in Pasay City. The company’s BOI-registered expansion projects for Grass Residences in Quezon City—Tower 4 and Tower 5—were valued at P2.54 billion and P2.68 billion, respectively. In August 2015 the BOI also approved the application of SMDC to develop the P2.26 billion Trees Residences Phase 1 in Novaliches, Quezon City. The BOI registers low-cost mass housing projects as identified in its latest Investment Priorities Plan, in which registered companies take advantage of the fiscal and nonfiscal incentives from the government. Catherine N. Pillas with reports from PNA
powerhouses like Hyundai Motor Co. and Samsung Electronics Co., improvements in labor productivity are also getting harder to find. Advocates like Lee argue that a carefully calibrated immigration program could help the economy fill worker shortages at factories and also bring in creative minds in fields ranging from computing to finance. “The country has grown so fast economically that the mind-set of the people hasn’t actually kept up,” Lee, 39, said in an interview with Bloomberg. “Someone should actually plan out how Korea would look with a more diverse population— how it would look in 10 or 20 years— but nobody is actually doing that.” President Park Geun-hye’s administration has taken small steps forward in its 2016-2020 demographics management plan. It will establish a “control tower” to help coordinate government agencies on all matters concerning foreigners and immigrants in Korea. More international students will be invited and professionals will be encouraged to stay longer. The government will also seek to find a public consensus on the appropriate amount for immigration. In neighboring Japan, which faces similar demographic problems, any notion of turning
to immigration is off the political agenda altogether. Previous polls indicate mixed feelings in South Korea. The proportion of people who think social cohesion has been hurt by an increase in the number of multicultural families rose to 33 percent in 2013, from 26 percent two years earlier, according to a survey by the Asan Institute for Policy Studies.
Mixed emotions
The study also found that 66 percent of people polled had a positive view about immigrants from the US, but that this approval rating dropped well below 50 percent for countries in Asia. People from China account for just over half of all foreign residents, followed by Americans and Vietnamese, both a little over 7 percent. The number of foreign residents has doubled over the past decade to about 1.9 million, compared with the total population of 50 million. Foreign workers account for about 2.3 percent of the labor force, according to the most recent figures from the government. Most were engaged in manual labor, with skilled workers concentrated in language teaching and the entertainment industry. Visa regulations prevent many foreign workers staying long enough to apply for permanent residency and eventually for citizenship.
Lee emigrated from the Philippines in 1996 after her marriage to a South Korean man. She became a naturalized citizen in 1998 and has two children. Her acting career and public profile took off with her starring role in the 2011 film Punch about a rebellious teenager in South Korea who reunites with his Philippineborn mother. Saenuri Party competed with opposition in 2012 elections by trying to bolster a progressive profile and said its recruitment of Lee reflected growing international calls to protect the rights of immigrants. When Lee embraced the offer and became a lawmaker, it was soon apparent to her that the country had to give more long-term thought to immigration. “Most of the policies that have always been tried for foreigners— foreign workers, students and multicultural families—are what I’d call first-aid bandages,” Lee said on January 21. “They aren’t going to work for long, they’re going to burst open later.”
Elections looming
With elections approaching in April, Lee’s political future is uncertain. She wants to stay in parliament as a proportional representative, but party leaders have yet to announce their decision.
Lee has ruled out trying to run for a specific district because migrants are thinly scattered around the country and she doesn’t have the kind of long family ties to one area that many lawmakers rely on to win election campaigns. While the politics of immigration remains controversial, researchers like Prof. Mo Jong Ryn at Yonsei University are calling for change. “Immigration can be approached as a way of not just increasing work force, but strengthening overall economic competitiveness,” said Mo, the author of the book Immigration Powerhouse. “We should consider ways to lure foreign workers in high-tech, growing industries, which would also necessitate a change in Korean corporate culture.” Seoul Mayor Park Won-soon highlighted how migrants are helping to maintain the city’s population while also making it a more diverse and global center. In the meantime, Lee is maintaining her sense of humor to ward off some of the online attacks. One of her most persistent critics is so incensed that a foreign-born person has been elected to the parliament that he’s talked of moving to another country. “They’re not thinking of what they are going to be when they move out,” she said. “They’re basically going to become me!” Bloomberg News
BMReports BusinessMirror
A4 Thursday, February 4, 2016
news@businessmirror.com.ph
Testy words between envoys during Chinese Embassy party
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By Recto L. Mercene
HE United States’s and China’s top envoys exchange testy words before a television camera but remained civil throughout the threehourlong celebration of the Spring Festival, the Chinese Lunar New Year at a hotel in Manila on Tuesday night.
Diplomatic reporters, who had attended the same event for the last three years, found it a typical New Year celebration of the Chinese Embassy. It was also attended by some members of the diplomatic community other friends of the embassy. However, the media and Chinese Ambassador Zhao Jianhua were surprised when the US and Philippine ambassadors showed up at the event to congratulate him, coming just days after a heated exchange between Washington and Beijing over an American warhip’s sail-by in disputed waters in the West Philippine Sea (WPS, South China Sea). In an ambush interview, US Ambassador to the Philippines Philip Goldberg, defending the latest foray of a US destroyer in the WPS, said: “We continue freedom of navigation [patrol’s] in the South China Sea, something that’s not new, we’ve done freedom of navigation operations for decades.” He said his presence at the Shangri-La event “signals the US desire to show respect to the diplomatic friends of America.” When it was Zhao’s turn to be interviewed, he said: “What we cannot accept is that some countries
What we cannot accept is that some countries using freedom of navigation as an excuse to intrude upon the sovereignty and interest of our country.”—Zhao are using freedom of navigation as an excuse to intrude upon the sovereignty and interest of our country. I think there has never been a problem in freedom of navigation in the South China Sea, and everybody can see that.” China maintains that it has indisputable sovereignty over the contested reefs, shoals and rocks in the WPS, whether the Philippines win the arbitration case against China.
U.S. Ambassador to the Philippines Philip Goldberg answers questions from the press during a forum on Wednesday in Quezon City. Goldberg talked about the issue in the West Philippine Sea (South China Sea) involving the Philippines and China, as well as the global fight against terrorism. AP
The US destroyer USS Curtis Wilbur sailed within 12 nautical miles of Triton Island, part of the Paracel Islands on the WPS, on January 2. The sail-by, the second the US had made within the last four months in the disputed WPS, has triggered calls among China’s military for tougher action against the US. Beijing has condemned the Saturday incident, saying, that it strongly opposed Washington’s “provocative move.” E a r l ie r, Z h a o w a r m l y a c knowledged his US counterpart, saying, “ Thank you ambassador
Government, power-industry stakeholders meet to resolve Mindanao transmission woes By Lenie Lectura
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ower-industry stakeholders are set to meet on Thursday in Davao City to tackle the transmission-line constraints and right-of-way (ROW) violations in Mindanao. “Through the Mindanao Power Monitoring Committee (MPMC), we will convene the top officials of the power industry’s key players in a bid to resolve these problems and mitigate the possible impacts to the grid,” said Luwalhati Antonino, chairman of Mindanao Development Authority (MinDA) and cochairman of the MPMC. Created in July 2012 through Executive Order 81, the MPMC is tasked to coordinate the efforts of national and local governments, as well as the powerindustry stakeholders, to improve the power situation in Mindanao. The Department of Energy and MinDA cochairman the committee composed of the Energy Regulatory Commission, the National Electrification Administration, the National Power Corp., the Power Sector Assets and Liabilities Management, the Association of Mindanao Rural Electric Cooperatives, the National Transmission Corp., the Mindanao Electric Power Alliance and the NGCP. Antonino said Mindanao is currently enjoying a steady supply of power for the first time in about 10 years, but the persistent issues affecting the transmission towers in Mindanao could hamper this positive supply outlook. “We must immediately address issues on ROW and easements to further prevent unwarranted power disruptions and ensure the steady supply of power in the grid,” Antonino said. In January the NGCP reported that 18 towers experienced security attacks, with the latest incidents involving towers No. 19, 20, 21, 13, 25 and 50 of the Agus 2-Kibawe 138-kV transmission lines. Transmission Tower No. 4 of the Baloi-Agus 2 138 kV transmission lines and Transmission Tower No. 63 of the KabacanSultan Kudarat 138-kV transmission lines also experienced security attacks.
18
for coming tonight.” Foreign Secretary Albert F. del Rosario came later with his wife, Gretchen. Zhao said he was pleasantly surprised to see the Philippines’s top diplomat. Del Rosario had not attended any Chinese Embassy event since Manila filed a case against Beijing before the UN Arbitral Tribunal, seeking clear delineations of maritime entitlements as China stepped up its expansion and reclamation activities in waters claimed by the Philippines. Del Rosario declined to be in-
terviewed. When asked what made him decide to show up at the embassy reception, he replied, “Our friend is celebrating their New Year.” The Philippines is awaiting the outcome of the three-year case, which the Permanent Court of Arbitration in The Hague, the Netherlands, that it hopes will be released sometime this year. Oddly, del Rosario did not acknowledge Zhao’s speech as a form of diplomatic courtesy. Asked why in a test message, Department of Foreign Affairs Spokesman Charles Jose said: “The secre-
tary of Foreign Affairs just being there already says a lot.” In his speech, Zhao praised the Philippines having joined the China-led Asian Infrastructure Investment Bank (AIIB). “The [AIIB] offers great opportunities for cooperation in the sector of infrastructure, but will, in fact, become a greater neutrality of current and future bilateral relations,” Zhao said. “I sincerely hope and believe that through our joint efforts, we will continue to make new progress and open a new chapter of cooperation in this Chinese New Year, the Year of the Monkey.” Although the two countries are embroiled in a territorial dispute, Zhao said the two countries have one thing in common, which is to peacefully settle the dispute in the WPS. “China is committed to peaceful settlement through dialogue and negotiation with the Philippines,” Zhao said. He said China remains as one of the top trading partners of the Philippines, and that for the first 11 months of 2015, trade had reached $45.46 billion, an increase by 2.3 percent. “More than 400 thousand Chinese travels to the Philippines last year,” Zhao said. “As Confucius said, at the age of 40, one should no longer be confused. The relationship between China and the Philipines have reached 41. China and the Philippines should not be confused in the current difficulties,” Zhao added, saying we are close neighbors, we cannot move away from each other. “We are partners, we can benefit more if we can use the great potentials of Philippine cooperation. We’re friends, sharing over 1,000 years of friendship and amicable exchanges.”
Makati mayor orders probe into cat killings in Dasmariñas Village
Number of transmission towers that were attacked in January alone “The recent attacks on Towers No. 20 and 25 created a dent in the power supply of Mindanao, which isolated the Agus 1 and 2 hydropower plants that produce about 260 megawatts (MW),” Antonino said. To date, the two towers have not yet been repaired due to issues of land ownership. The isolation of the hydropower plants has also caused rotational power interruption in different franchise areas in Mindanao. In addition to the attacks, issues on the ROWs and the hesitance of the land owners to cooperate are seen to further aggravate the problem. Currently, five lines are out of operation due to the unwillingness of landowners to cooperate and the growing vegetation under the lines. These include the BaloiAgus 2 138 kV lines 1 and 2; the BaloiAgus 6 69 kV line; and the Kibawe-Agus 2 138 kV lines 1 and 2. “The hesitance of the landowners to cooperate in solving the problem is also becoming a serious drawback, as NGCP’s personnel cannot enter the area of the damaged towers or lines,” Antonino said. Aside from updates on the repair of the transmission lines and towers, the principals’ meeting will also discuss mitigation measures, ways forward, immediate solutions and other initiatives. “This meeting is crucial, as it will allow us to craft plans and initiatives that will mitigate and prevent similar transmissionrelated problems in the future,” she added. The energy officials will also discuss other issues revolving around the power sector of Mindanao, like the contraction of distribution utilities, updates on incoming power projects, the impacts of El Niño to the grid, and the rehabilitation of the Agus and Pulangi hydropower plants, among others.
By Claudeth Mocon-Ciriaco Correspondent
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he mayor of Makati City on Wednesday ordered the Makati Veterinary Services Office (MVSO) to conduct a thorough investigation into the reported vicious killings of cats at the posh Dasmariñas Village in the city. “As a local chief executive, I will not allow anyone, regardless of their social status, to intentionally inflict harm on our animals,” Mayor Kid Peña said, stressing that such “barbaric acts” on felines, and even on hounds, should be dealt with appropriately. The MVSO, headed by Dr. Vivien Manalastas, has initiated coordination efforts with the officers of the Dasmariñas Village Association, Compassion and Responsibility for Animals (Cara) Philippines, an animal welfare group, and the office of Barangay Dasmariñas Chairman Martin John Pio Arenas to solve the killings, and possibly apprehend the “serial cat killer.” Peña pointed out that cats, just like dogs, are regarded as “best friends” to humans, and thus, deserve to also be taken care of, and be able to enjoy their rights to live and proper care and protection.
As a local chief executive, I will not allow anyone, regardless of their social status, to intentionally inflict harm on our animals.”—Mayor Kid Peña He added that he would not think twice about suing those found responsible and see to it that the culprit behind the killings are duly penalized. Under the Animal Welfare Act of 1998, or Republic Act 8485, and the amended IRR 10632, Pena said that cruelty to animals carries a penalty of up to P250,000 and an imprisonment of up to three years. For foreigners, penalties for acts of abuse, maltreatment, cruelty and neglect of animals may include immediate deportation. A similar case within the same exclusive enclave cropped up about eight years ago, Manalastas recalled. In 2007, she said, that 14 cats and kittens cared for by an animal welfare group were shot dead with airgun in the same village. Peña also expressed willingness to offer a cash reward to whoever can help expedite the apprehension of the culprit and solve the case at the shortest time possible.
He also lauded People for the Ethical Treatment of Animals Asia (Peta) and Cara for taking the lead in the protection of animals, especially stray dogs and cats, and assured village residents of his administration’s all-out support to their cause. The Peta-Asia offered a P50,000 cash reward to anyone who could give information leading to the resolution of the case. Janna Sevilla, campaign manager of Peta-Asia, earlier told the BusinessMirror that Dasmariñas Village residents have expressed alarm over the disapprearance of their feline pets over the past few weeks. “This is alarming because psycho-killer starts with killing animals—cats, dogs—and later on, they start hurting people,” Sevilla said. Peta-Asia has also set up a hotline, 0999-888-7382, to gather information about the case.
Asean
BusinessMirror Editor: Max V. de Leon • Thursday, February 4, 2016 A5
www.businessmirror.com.ph
Indonesian finance minister bullish on rupiah trajectory
AEC: Addressing the skills gap Asean-EU Perspective
HENRY J. SCHUMACHER
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ach of the 10 Asean members has challenges to overcome to bolster and sustain economic growth at a time when the global economy is weak and competition is intensifying. But one challenge they all have in common is the skills gap in the work force, which takes different forms in each economy. Rigid policies and incentives are required to help close the skills gap, otherwise it will be difficult for Asean members to successfully move to the next stage of development. While each of the Asean-5 (that includes the Philippines) is focusing on developing different industries, they all face the same need in providing a wide array of skills to support their economic transformation. These include a broader set of soft skills such as English language command, information technology (IT) and management skills, as well as general and job-specific professional skills. Some of those skills are especially relevant for countries that intend to develop high value-added manufacturing industries. Despite the proliferation of training institutions, many companies still find it difficult to recruit trained workers with the relevant skills. In the Philippines, we at European Chamber of Commerce of the Philippines have supported the apprenticeship bills in both Houses of Congress and provided solutions at every step of the evolution of the legislation. It is sad to note that it is unlikely that the apprenticeship bill, that has passed the House, will make it through the Senate in the 16th Congress. Senators should see the value the combination of K to 12 and apprenticeship in guiding the youth exactly down the skills avenue that will provide the relevant skills for manufacturing and other industries in this country. We have addressed all the questions regarding potential abuse of the Apprenticeship law; and still the bill is not moving in the Senate. Whether Asean countries realize their growth potential to become a significant player in the global economy depends crucially on their ability to provide a sufficiently large number of workers with the relevant skills to meet the challenging needs of the growth industries. Asean needs to adequately supply trained workers to meet the demand of industries that are deemed to be economic growth driven. Without the right skills set, it would be difficult for the workers in Asean countries, especially the younger ones, to play a meaningful role in the restructuring and upgrading of these economies. Let’s take a brief look at some Asean countries: In Indonesia skills gaps pose a serious challenge to growth and development across the industries because of constraints on the supply side. Both the quantity and quality of trained workers is inadequate at all levels, including the tertiary level. Thailand faces two skills gaps challenges. There is an uneven quality and a shortage of skilled workers, and also uneven quantity which is especially severe in science, technology and related fields. Thai workers lack English language proficiency, IT and other soft skills. For Malaysia, which is moving from labor-intensive to technologyoriented manufacturing, substantial skill gaps exist in a number of key industries including IT and business-process outsourcing, tourism, health care, aviation maintenance, repair and overhaul industries. Labor-market inefficiency in the Philippines causes an oversupply of certain professionals such as nurses, school teachers and seafarers. Exacerbating the problem is the large outflow of skilled workers. In Singapore efforts are being made to reduce the reliance on foreign workers and to retain local workers to meet the demand of five sectors that the government has identified as future growth clusters: advanced manufacturing, health sciences, urban solutions, logistics and aerospace, and global financial services. Cooperation and coordination among Asean countries on intra-regional labor flows could prove to be essential in helping to provide a more effective mechanism to address skills gaps that each Asean member faces.
Mahathir’s son ousted as Najib tightens grip
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he son of a former Malaysian leader was removed as chief minister of a northern state, indicating Prime Minister Najib Razak is tightening his grip on power after a months-long funding scandal. Mukhriz Mahathir announced his resignation as the head of Kedah’s government, saying he did not have the backing of a majority of lawmakers. He will be replaced by Ahmad Bashah Mohd Hanipah, the deputy chair of Najib’s ruling party in the state. Along with his father Mahathir Mohamed, Mukhriz has become the public face of a campaign against Najib. Their criticism has centered on Najib’s management of the economy, revelations of a $681-million private donation to Najib from the Saudi royal family, and concerns over the finances of troubled government investment company 1Malaysia Development Bhd. (1MDB). “The actual reason for removing me is because of my criticisms against the prime minister, which he himself has admitted,” Mukhriz
said in a statement read out to reporters. “The criticism is about the 1MDB scandals and the 2.6-billion ringgit donations and the impact of cost of living on people arising from GST,” he said, referring to a Goods and Services Tax. The purge of Mukhriz suggests Najib has further coalesced his hold within the ruling United Malays National Organization (Umno), where he retains the support of the bulk of divisional chiefs. Since coming to power in 2009, Najib has moved to shore up the party’s key support base—ethnic Malays—by increasing handouts and backing policies that give the group preferential access to such things as education. Mahathir has repeatedly said Najib must resign or Umno, which has governed since independence in 1957, risks losing the next election. As the country’s longest-serving leader, Mahathir wielded considerable influence for decades, although his sway has faded in recent years. Bloomberg News
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he rupiah will strengthen this year as policy-makers maintain a focus on macroeconomic stability even as growth picks up, according to Indonesian Finance Minister Bambang Brodjonegoro. The currency should trade around the 13,500 to 13,600 a dollar level depending on global conditions, Brodjonegoro said in an interview with Bloomberg TV in Hong Kong on Wednesday. That’s more bullish than the median estimate of 30 analysts surveyed by Bloomberg, who see the rupiah ending 2016 at 14,584. The currency fell 0.9 percent to 13,810 as of 11:06 a.m. in Jakarta, according to prices from local banks. The rupiah has declined 0.1 percent this year, outperforming all but two emerging-market Asian currencies amid Chinese market turbulence and after the Federal Reserve (the Fed) raised interest rates last December. Bank Indonesia’s resumption of its easing cycle last month has helped lure inflows to the country’s sovereign bonds. Increased infrastructure spending will spur economic growth
4.8%
Estimated GDP growth of Indonesia in the fourth quarter of 2015 according to the median estimates in a Bloomberg survey from an estimated 4.8 percent in 2015, Brodjonegoro said, without giving a forecast for this year. “Although we already see some room to speed up growth, we still put the emphasis on stability,” Brodjonegoro said. “We already see part of the
hysteria of a Fed rate hike has been priced in before. So that’s why the rupiah has been performing well.”
More undervalued
The rupiah has strengthened 0.2 percent this year, the best performance in Asia after Malaysia’s ringgit and Thailand’s baht. That contrasts with its 30-percent plunge in the three years through 2015 amid falling commodity prices, a slowing Chinese economy and anticipation of tighter US monetary policy. The currency had been more undervalued than most of its peers and should be fairly stable in 2016, according to Ebury Partners Ltd., the most accurate rupiah forecaster in Bloomberg rankings in the third and fourth quarters. Ebury predicts the currency will end the year at 13,800 a dollar. Indonesia is due to release GDP figures for 2015 on Friday. The economy expanded 4.8 percent in the three months through December and 4.7 percent last year, according to the median estimates in a Bloomberg survey. That would be the slowest annual growth since 2009. Indonesia’s rupiah was set for its biggest drop in a month on speculation a renewed decline in global commodity prices will deepen an export slump. The Bloomberg Commodity
Index headed for its biggest threeday loss since August after two successive weeks of gains. The gauge sank 25 percent in 2015 amid slowing demand from top consumer China. Overseas shipments from Indonesia, the world’s biggest palm oil grower and thermal coal exporter, fell for a 15th straight month last December. The Southeast Asian nation’s benchmark equity gauge was poised for its steepest two-day retreat since January 21. “Indonesia is very exposed to commodities in terms of exports, and there is a perceived impact on the currency,” said Ho Woei Chen, an economist at United Overseas Bank Ltd. in Singapore. “More than 50 percent of its exports are related to commodities.” The rupiah weakened 0.9 percent to 13,815 a dollar as of 10:45 a.m. in Jakarta, set for its biggest decline since January 4, according to prices from local banks compiled by Bloomberg. Global funds sold $14.5 million more Indonesian shares than they bought on Tuesday, the first outflow in six days. The yield on the nation’s 10-year notes increased two basis points to 8.13 percent, Inter Dealer Market Association prices show. The twoyear yield rose four basis points to 7.85 percent. Bloomberg News
The man prosecutors say is likely behind Singapore’s stock rout
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ohn Soh Chee Wen is used to being accused of wrongful activity. Soh, a bankrupt Malaysian businessman last week fingered by Singapore prosecutors as the likely mastermind behind the city’s biggest-ever stock market-manipulation scheme, has spent much of the past 20 years fending off allegations that he’s alternatively a front, an asset trader or a pump-and-dump operator. “I’m battle hardened,” the 57-yearold, who’s out on bail during investigations, said in an interview on January 27. In Singapore a person can be arrested and be out on bail even before charges are brought. In the latest case, prosecutors said they are likely to charge Soh this year with being behind “serious criminal activities” that wiped S$8 billion ($5.6 billion) off the value of shares of three companies in October 2013. For his part, Soh said in the interview that the crash in the shares of mining companies Blumont Group, LionGold Corp. and Asiasons Capital Ltd., now known as Attilan Group, was due to a “collection of ad hoc events” triggered by an unexplained phenomenon. The rout has been blamed for falling trading volumes and a loss of investor confidence in Southeast Asia’s biggest stock market. It led to rule changes and triggered the city’s largest securities fraud probe, an investigation that’s looked into some 500 trading accounts, 20,000 e-mails, 1,100 bank accounts and heard from 70 witnesses, but hadn’t pointed to a culprit. Until, that is, Soh was accused in court on January 27 of being “probably the mastermind” of the 2013 event. In 2007 Soh pleaded guilty and was fined in neighboring Malaysia for his role in a securities fraud case. Last week’s allegations are a “misunderstanding,” he said in an interview. Rather, he said, he was the biggest promoter of the companies whose shares took a nosedive more than two years ago. Soh said he is an adviser to the chairman of LionGold. “I was one of the early and chief proponents of trying to build a
$5.6B
Value of shares of three companies reportedly lost due to Soh’s alleged activities in October 2013
sizable mining presence in Singapore,” he said in an interview at a café overlooking the Singapore River. “We —me and some investors—saw an opportunity.” The group picked up undervalued Canadian and Australian mining assets and Soh said he went on road trips promoting LionGold, the glories of Singapore and its market efficiency. “Unfortunately, instead of being labeled as the architect of a potentially large homegrown mining company, now they’re calling me the mastermind,” Soh said. The opportunity they saw was a plan to defraud investors, according to Singapore’s prosecutors. Share prices of the three firms surged as much as 800 percent over nine months in a buying frenzy. The benchmark Straits Times Index was unchanged during that period. Then, in the space of a week in October 2013, the stocks crashed to pennies, plunging by at least 87 percent. The shares are now 99-percent off their peaks. The rout has hurt market credibility, investigators said in court documents, which didn’t give details of the alleged plot. The three commodity companies have said they aren’t aware of what caused the share plunge. Banks and brokers have sued their clients and others to recover at least $230 million from the rout. “We’re still not aware,” said Raymond Tan, CEO of LionGold, referring to the reason for the company’s stock plunge. Blumont Executive Director Ng Kim Huatt didn’t answer repeated calls to his mobile phone.
John Soh Chee Wen
Calls to Attilan’s number listed on regulatory filings went to a voice recording which said the number wasn’t available. Last week’s hearing was precipitated by a request from Soh, whose passport has been impounded under the terms of his bail, that he be allowed to travel to Malaysia to visit his 81-year- old mother, who he said is in ill health, and also to attend his son’s wedding. The request was denied. The Monetary Authority of Singapore, which is jointly probing the case with the Commercial Affairs Department, said in the court papers it was concerned that Soh was a flight risk.
Malaysia’s second-largest political party and traded stocks on borrowed money. In 1996 he formed a partnership with the son of Malaysia’s then transport minister, creating a business empire around Promet Bhd. and Rekapacific Bhd. That relationship later soured and things unraveled for Soh during the Asian financial crisis as business slowed and debts mounted. “Politics was my first love and deal making was my second nature,” Soh said. “You need to have certain masochistic tendencies to do deals and politics.”
T-shirts, shampoo
Rekapacific, a property developer, was delisted in 2005, found by the Malaysian stock exchange to have broken its rules for failing to provide financial reports from 1999 to 2001. Construction firm Promet was fined in 1997 for not disclosing share sales. Calls to Rekapacific and Promet listed in Malaysia’s public phone directory went either to a fax machine or the lines were busy. In 1999 Soh left Malaysia, returning in 2002 to face charges of defrauding a local brokerage of 520 million ringgit ($125 million). Soh denied claims by Singapore prosecutors that he fled his home country before authorities there could arrest him. In 2007 Soh pleaded guilty for his role in submitting false information to Malaysia’s stock exchange and was fined 6 million ringgit. Bloomberg News
Anyone convicted of false trading or deceptive and fraudulent activities in Singapore faces a maximum jail term of seven years and a fine of as much as S$250,000. Soh said in the interview he’s ready for the day when he might be charged and can tell his side of the story in court. He declined to comment further on the case. Soh said he dropped out of a Malaysian university in 1979 after a week to sell t-shirts and shampoo. In 1981 the then-21- year-old made his first million ringgit before losing it all in 1984. Soh said he took on jobs trying to restructure companies and even helped clean toilets during the Malaysian recession in 1985. He spent the next decade acquiring companies, held positions in
Shopkeeper’s son
TheBroa
Business
A6 Thursday, February 4, 2016
HIT OR MISS: Aquino admin By Cai U. Ordinario, Mary Grace Padin & Jovee Marie N. dela Cruz
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resident Aquino did better than the five presidents who came before him. This was the pronouncement made by the National Economic and Development Authority (Neda) after the Philippine Statistics Authority (PSA) released the 2015 GDP data. PSA data showed that from 2010 to 2015, GDP growth averaged 6.2 percent. Former Economic Planning Secretary Arsenio M. Balisacan said this was “remarkable” as this was achieved without resorting to unsustainable borrowings and short-lived portfolio capital. Computation done by the BusinessMirror using PSA data showed that GDP growth during the term of former President Corazon C. Aquino averaged 3.85 percent; Fidel V. Ramos, 3.75 percent; Joseph E. Estrada, 2.3 percent; and Gloria Macapagal-Arroyo, 4.45 percent. The PSA has no data on GDP growth during former President Ferdinand E. Marcos’s term. Comparing this average to the initial goal of the Aquino administration, the President and his men fell short of the government’s target of growing GDP by an average of 7 percent during this term. In 2015 alone, when spending for elections was expected to ramp up in the latter part of the year, GDP growth reached only 5.8 percent, lower than the government’s 7.5-percent to 8-percent target. In its economic bluepr int, dubbed as the Philippine Development Plan (PDP) 2011-2016, the Aquino administration had initially targeted to increase GDP by 7 percent to 8 percent annually. The government revised its targets in the “updated” PDP which it released in 2013. In the midterm assessment of the PDP, the government adjusted its growth targets. Starting 2013, the government aimed for a GDP growth of 6.5 percent to 7 percent; 2014, 7 percent to 7.5 percent; 2015, 7.5 percent to 8 percent; 2016, 8 percent to 8.5 percent. However, economic performance from 2011-2015 has fallen short of expectations, most notably in 2011, when GDP growth slowed to 3.7 percent from 7.6 percent in 2010. This presented difficulties in creating more jobs and cutting poverty incidence. Data from the Annual Poverty Indicators Sur vey showed that poverty incidence in the countr y remained high. In fact, poverty incidence even went up to 25.8 percent in 2014, from 24.6 percent in 2013.
‘Laggard’
Among all economic sectors, Agriculture can be considered a laggard. Under the original PDP, the government had targeted to increase farm output by 3 percent to 5 percent. The Aquino administration never hit its growth goal for agriculture in 2010 to 2015. PSA data showed that in 2010, farm output contracted by 0.12 percent. While the sector’s production grew in succeeding years, the rates were lower than the government’s target: 2.34 percent in 2011, 2.92 percent in 2012, 1.15 percent in 2013, 1.83 percent and by 0.11 percent in 2015. This despite the P339-billion budget given to the sector in 2011 to 2015. The agriculture sector’s budget increased yearly as the government sought to boost output, particularly of the country’s staples, and improve the income
of farmers. Agriculture Secretary Proceso J. Alcala said, however, the sector’s recovery is a “slow process.” What the Aquino administration did, Alcala said, was to lay down the necessary foundation to ensure the sector’s continuous growth. “When you tell a sick person to get up, it doesn’t mean he will get up quickly. The process for recovery should be done slowly. And I think the administration has done its part in laying down the basic foundation to improve the sector,” he said. What kept the economy afloat during President Aquino’s term were the Industry and Services sectors. Under the 2011-2016 PDP, the government had targeted a growth of 8.1 percent to 9 percent for Industry and 7 percent to 7.9 percent for Services. While the Industry and Services fared better than Agriculture, the performance of the two sectors could be considered quite erratic. In 2011 the Industry and Services, sectors grew by 1.9 percent and 2.6 percent, respectively. These growth rates were lower than what the Aquino administration had targeted. The Services sector fared better in 2012, when it grew by 7.4 percent which was well within the 7-percent to 7.9-percent target of the government. But the expansion of Industry, pegged at 6.5 percent in 2012, fell short of the 8-percent to 9-percent goal. In 2013 the government hit its targets for Industry and Services which grew by 9.5 percent and 7.1 percent, respectively. For the next two years, however, the government would again fail to achieve its growth goals for the sectors.
‘Culprits’
According to economists, the Aquino administration was unable to meet its own targets mainly because it has been plagued by underspending and “flawed” agriculture policies like the rice self-sufficiency goal. This was compounded by climate change, which caused strong typhoons to hit the country, and the weakness in the global economy. Former Budget Secretary Benjamin Diokno said the administration underspent by P1 trillion. This caused a huge setback in terms of moving projects forward and addressing other social problems that needed funding. Diokno said Mr. Aquino also lost sight of what was important as he focused on exacting revenge on his political enemies. “The [Aquino administration] overpromised. It assumed wrongly that its leaders can deliver on the promises. The President overpromised on the public–private partnership projects. It turned out to be a major disappointment,” he said. “Aquino also took his eye off the ball. He spent too much time on exacting vengeance on his political enemies, including Arroyo and former Supreme Court Chief Justice Renato Corona,” Diokno added. University of Asia and the Pacific School of Economics Dean Cid Terosa agreed with Diokno that underspending was a major factor behind the Aquino administra-
construction of another skyscraper going full blast at Rockwell in Makati City. The construction boom the past several years helped underwrite the country's continued expansion. NONIE REYES
tion’s failure to hit its own targets. Government data showed that since Mr. Aquino assumed office in 2010, the administration posted double-digit contractions in terms of spending. In 2014 the Government Final Consumption Expenditure (GFCE) posted flat growth in the second quarter and contracted by 2.5 percent in the third quarter. However, spending recovered in 2015, according to PSA data. The GFCE grew by 17.4 percent in the third and fourth quarters of last year. But, by the time the government was able to gain a foothold on its spending, the term of President Aquino was already ending. In the end, the current administration’s effort to play “catch up” came too late to make a difference. “[Ultimately, the failure to meet PDP targets] was a combination of weak global markets, natural disasters and overly cautious government spending,” Terosa said. For Diokno, the Aquino administration’s economic targets were “too lofty” and were difficult to achieve. But other economists like Terosa and Ateneo de Manila University Eagle Watch Senior Fellow Alvin Ang said it was “necessary”
Average GDP growth
3.85% 3.75% 2.3% C. Aquino
to set high economic targets ased on careful study. “I believe a high growth-rate target is necessary to mobilize enough resources and encourage coordinated action by the government, private sector and civil society toward the growth target. A high growth target sends out the signal to the world that we recognize our growth potential and we aim to achieve it,” Terosa said. “[The PDP targets were] not really lofty but it’s based on studied facts and capacity of the economy. It’s just that the real economy is affected by too many factors,” Ang added.
F. Ramos Recommendations
Balisacan said succeeding presidents must continue targeting a GDP growth rate of 7 percent, even if the Aquino administration faced difficulties in hitting this goal. Law ma kers a lso urged the next administration to focus on problems hounding the agricultural sector. House Committee on Agrarian Reform Chairman and Liberal Party Rep. Teddy Baguilat Jr. of Ifugao and Party-list Rep. Fernando Hicap of Anakpawis said the next president should deliver on the government’s promise of genuine agrarian reform.
J. Estrada
“Accomplish the promise of agrarian reform not just completion, but adequate support services, better disaster management because calamities are also a factor [on the country slow agricultural growth],” Baguilat said. “ T he ne x t ad m i n i st rat ion should also focus on the construction of infrastructure such as irrigation and farm-to-market roads. The government should also increase the budget of these projects,” he added. For his part, Hicap said the next government should prioritize the passage of the Genuine Agrarian Reform Bill that proposes free
aderLook
sMirror
www.businessmirror.com.ph | Thursday, February 4, 2016
A7
n’s economic targets ‘too lofty’ Gdp (constant prices) YEAR
growth actual (%)
PDP target–low (%)
growth actual (%)
2010
7.70
7.00
8.00
2011
3.90
7.00
8.00
2012
6.80
7.00
8.00
2013
7.20
6.50
7.00
2014
6.10
7.00
7.50
2015
5.80
7.50
8.00
8.00
8.50
2016 GROWTH ACTUAL (%)
PDP TARGETS–LOW (%)
PDP TARGETS–HIGH (%)
9.00
6.75
4.50
2.25
0.00 2010
4.45% 6.2% G. Arroyo
land distribution to poor farmers and bill providing free irrigation services for farmers. “[Since the start of the 16th Congress], we call on the fulfillment of genuine land reform or free land distribution to farmers, so that there could be real development in the countryside that would spark off national industrialization for the benefit of all sectors of society,” Hicap said. He added the gover nment should also control the entry of imported agricultural products and support local products. The party-list representative
B. Aquino
said industrialized countries each went through a stage of land reform that served as a prerequisite to industrial development. “All developed countries, Europe, America, Japan, China, even Vietnam and others, implemented a genuine land-reform program as it is a precondition to economic development and also in many instances a part of the struggle against foreign aggression and control,” Hicap said. House Committee on Climate Change Chairman and Partylist Rep. Rodel Batocabe of Ako Bicol, meanwhile, appealed to the national government to take
2012
2013
2014
2015
2016
YEAR
QUARTER
GROWTH (%)
NOMINAL (PHP MILLION)
2010
Q1
8.40
1333040
Q2
8.90
1453390
Q3
7.30
1380231
Q4
6.10
1534877
Q1
4.90
1394150
Q2
3.60
1500321
Q3
3.20
1422446
Q4
4.00
1593285
Q1
6.40
1480580
Q2
6.30
1592299
Q3
7.30
1522288
Q4
7.20
1710061
Q1
7.70
1592017
Q2
7.90
1717511
Q3
7.00
1625467
Q4
6.30
1815084
Q1
5.60
1681505
Q2
6.70
1832193
Q3
5.50
1715155
Q4
6.60
1935164
Q1
5.00
1765493
Q2
5.80
1937608
Q3
6.00
1818815
Q4
6.30
2057833
2011
serious action against climate change as it will surely affect the agricultural sector. He said the next government should promulgate long-term policies aimed at helping vulnerable areas implement adaptation measures against climate change, including El Niño. Citing the Philippine Atmospheric, Geophysical and Astronomical Services Administration and the Food Agriculture Organization (FAO), Batocabe warned of the worsening climate impacts of El Niño by February 2016. He said the FAO also warned that up to 47,111 affected farmers may need support for their farming activities in the next cropping season due to El Niño. “There is indeed a failure in propping up growth in agriculture. Aside from climate change and natural disasters, we have not swiftly initiated the necessary adaptation and mitigation measures to cushion the adverse effects of climate change,” he said. “Moreover, we may have allocated billions of funds to the agriculture sector, the ultimate question is whether or not we efficiently and effectively utilized said funds,” Batocabe added.
2011
2012
2013
2014
2015
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Thursday, February 4, 2016
The World BusinessMirror
news@businessmirror.com.ph
China reduces sentences for 11 Uighurs, including a Canadian
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EIJING—A court in western China has reduced the sentences of 11 Uighurs convicted of terrorism and endangering state security, including a naturalized Canadian preacher whose life term had been sharply criticized by Ottawa. The official Xinhua News Agency reported late Monday that sentences of 11 Uighurs at Xinjiang’s First Prison were commuted following a prison-wide rally where they apologized for their crimes. Celil fled China and gained refugee status in 2000. He preached in Ottawa before being extradited in 2006 from Uzbekistan to China, which refused to recognize his Canadian citizenship and convicted him of organizing on behalf of the
East Turkestan Islamic Movement militant group. Aside from the reduction of life sentences to fixed terms, four prisoners, including a man convicted of contacting the ETIP and setting up training bases in Afghanistan, saw lengthy prison terms reduced to six months. The new duration of Huseyin Celil’s sentence has not been announced, but the decision was lauded by activist John Kamm, who has pressed for Celil’s release on behalf of the Canadian government since 2009. Kamm, based in San Francisco, told the Associated Press on Wednesday that commuting Celil’s sentence represented “a step in the right direction” and could prompt other Xinjiang prisons to consider mass clemency. AP
Barack Obama will make first visit of his presidency to a US mosque
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In this January 20 file photo, Syrian refugee Bissan Alabdullah, almost 3, smiles while standing next to her family’s laundry outside their tent at an informal tented settlement near the Syrian border on the outskirts of Mafraq, Jordan. International aid to the victims of Syria’s five-year-old war, including millions forced to flee their homes, has persistently fallen short, but organizers of the February 4 annual Syria pledging conference hope for greater donor generosity this time around, despite a record ask of close to $9 billion for 2016. AP
Syria aid conference to seek record $9 billion aid for 2016
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MMAN, Jordan—International aid to the victims of Syria’s five-year war, including millions forced to flee their homes, has persistently fallen short, but organizers of Thursday’s annual Syria pledging conference hope for greater generosity this time around, despite a record request of close to $9 billion for 2016.
The expectations are partly based on the reframing of the aid debate over the past year, following the chaotic migration of hundreds of thousands of desperate Syrians to Europe. Donor countries trying to slow the influx would arguably serve their own interests as much as lofty principles of international solidarity if they give more and spend in smarter ways to improve refugees’ lives and ease the burden on Middle Eastern host countries. “I do think the European experience will have sharpened minds,” Guy Ryder, head of the International Labor Organization (ILO), told the Associated Press while visiting Jordan, one of the struggling host countries. “And I don’t think that’s a bad thing if it leads to action [on Thursday], as I hope it will.” The stark reality of a drawnout conflict requiring more ambitious long-term aid plans has also sunk in. Fighting between Syrian President Bashar al-Assad’s forces and those trying to topple him has only intensified over the past year, and the latest long-shot attempt at UN-brokered peace talks got off to an acrimonious start in Geneva over the weekend. Attempts to broker a cease-fire and political transition deal for Syria
are further complicated by the involvement of world and regional powers facing off on opposite sides of the conflict. Thursday’s donor conference, to be held in London, is cohosted by Britain, Germany, Norway, Kuwait and the United Nations. World leaders and representatives of dozens of countries have been invited, along with officials from international organizations, aid agencies and civic groups. The total aid requirement to be presented in London amounts to nearly $9 billion, including a UNcoordinated appeal by dozens of aid agencies for $7.73 billion and a $1.23-billion request by regional host governments. The latter is a small portion of the massive economic support sought in the coming years by countries like Turkey, Lebanon and Jordan, which host nearly 4.6 million Syrian refugees. “We hope and expect to raise significant new funding,” said Jens Laerke, spokesman of the Office for the Coordination of Humanitarian Affairs, which assembled the UNled appeal. Such optimism comes despite widening funding gaps. Last year’s appeal of more than $7 billion was just over half-funded, forcing painful cuts in programs such as refugee food aid. Beyond
the basics, donors are also being asked to support longer-term plans, with a focus on education and jobs. “We think we need to make a step change now from simply the traditional model of passing the hat around the international donor community,” British Foreign Secretary Philip Hammond said in Jordan this week. Donors would work more closely with countries like Lebanon and Jorden to boost fragile economies plagued by high unemployment and help create jobs for both citizens and refugees. Currently, the vast majority of refugees are banned from legal work, making them dependent on scarce aid or forcing them into poorly paid informal jobs. The influx of Syrians has also pushed down wages of Jordanian and Lebanese laborers, driven up rents in poor neighborhoods and overwhelmed local schools and health centers. Jordan’s King Abdullah II told the British Broadcasting Corp. ahead of the donor conference that “the psyche of the Jordanian people, I think it’s gotten to boiling point.” New ideas also include encouraging large-scale private foreign investment in the region and Europe granting easier access to products made there. The ILO envisions labor-intensive infrastructure projects, such building water cisterns, schools and roads. Germany has proposed a donor-funded program to create 500,000 short-term jobs for refugees in the region. The World Bank is, meanwhile, helping to set up cheap loans for host countries, with donors covering interest payments. Jordan has balked at the idea of having to borrow for anything linked to the refugee crisis, but has welcomed zero-interest financing for development programs it had to put on hold in recent years.
One of the most specific goals of the conference deals with education—to get all refugee children back to school by the end of the 2016/2017 school year. Currently, more than 700,000 school-age refugees are out of school, more than half the total. The UN children’s agency said on Tuesday that $1.4 billion would be needed to rescue what could become a “lost generation,” both in Syria and in exile. But despite goodwill and new ideas, donors face a grim truth— millions of Syrians are worse off now than they were even a year ago. Most refugees in Jordan and Lebanon live in poverty. More refugee children have had to quit school for jobs to help families survive, as savings run out and adults are barred from legal work. Host countries have tightened entry restrictions for Syrians trying to escape fighting, including Jordan, where 20,000 are stranded in a remote desert area on the border and thousands more arrive each month. A new report by the Norwegian Refugee Council says hundreds of thousands of refugees are at risk or have already lost their right to legal stay in host countries. A string of diplomatic failures has meanwhile worsened conditions inside Syria, where aid groups say 13.5 million people are now in need of assistance. Millions struggle to survive in besieged or hardto-reach areas, and several dozen have starved to death. “What we are witnessing now is a collective failure to deliver the necessary support to the region,” said Jan Egeland, a former Norwegian diplomat who heads the Norwegian Refugee Council, which has called for aid on the scale of the Marshall Plan. “We are witnessing a total collapse of international solidarity with millions of war victims.” AP
ASHINGTON—President Barack Obama will make his first visit to a US mosque on Wednesday, and it comes at a time when MuslimAmericans say they’re confronting unprecedented levels of bias. Obama will travel to the Islamic Society of Baltimore, which houses a mosque and school that runs from kindergarten through 12th grade. The visit comes one week after Obama became the first sitting president to speak at the Israeli Embassy. There, he warned of growing anti-Semitism in the world. Obama’s message in Baltimore will follow a similar tack. The White House said he will focus on the need to speak out against bigotry and reject indifference. It’s the kind of effort that Muslim-Americans say they’ve been waiting for from America’s political and religious leaders. “For some time, we’ve been asking for pushback. Perhaps, this will start a trend,” said Ibrahim Hooper, a spokesman for the Council on American-Islamic Relations (CAIR), an advocacy group. CAIR has tracked a growing number of attacks on mosques and on individuals in the months following the Paris terrorist attacks and the shooting rampage in San Bernardino, California. A severed pig’s head was delivered to a mosque’s doorstep in Philadelphia. Someone attempted to set fire to a mosque in Southern California, and an arrest has been made. Hooper said harassment and bullying is also on the rise. He cited
Republican presidential candidate Donald Trump’s call for a ban on Muslims entering the country as an example of how bias toward Muslims has become part of the American mainstream. “I don’t think there’s ever been this level of fear and apprehension in the Muslim-American community,” Hooper said. Meanwhile, some Republicans have criticized Obama for not linking attacks like the one in Paris to “radical Islamic terrorism.” Republican presidential candidates Ted Cruz and Trump have voiced that concern. Obama has said he refuses to describe the Islamic State and other such groups that way because the term grants them a religious legitimacy they don’t deserve. Attendees at the Baltimore mosque are predominantly of Turkish heritage, although immigrants of other nationalities also participate, said Akbar Ahmed, an Islamic studies specialist at American University who has researched mosques around the US. Obama “left it literally to the last” to visit a US mosque, Ahmed noted, “but better late than never.” Ahmed said the visit will be reassuring to US Muslims, amid the heightened rhetoric of the 2016 presidential campaign. “The president going there means he hasn’t forgotten us,” Ahmed said. Obama will also be sending a signal to the world, which has been watching the campaign closely, that the US has not abandoned its commitment to religious pluralism, Ahmed said. AP
Alleged phony priest arrested for 2015 pope-trip cash scam
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OS ANGELES—A man who allegedly posed as a priest and officiated at Masses, funerals, confessions, and at least one marriage was arrested on Tuesday on suspicion of selling thousands of dollars in phony tickets to see Pope Francis during last year’s US visit. Erwin Mena, 59, declined to comment to the Los Angeles Times as detectives escorted him in handcuffs from police headquarters. He remained jailed, and it was unclear whether he had an attorney. Mena faces about 30 charges, including grand theft, perjury—for filing a marriage license he signed as a priest—and practicing medicine without a license in connection with offering “a system or mode of treating the sick,” according to an arrest warrant. Last year Mena allegedly posed as a priest at Saint Ignatius of Loyola parish in northeastern Los Angeles and sold tickets to a pilgrimage to visit New York and see the pope during his Philadelphia visit in September, prosecutors said. The trip supposedly included airfare and lodging at convents. Michelle Rodriguez, 60, and
some of her friends and coworkers paid more than $950 each in cash for the trip. “It was a great deal for the price,” Michelle Rodriguez told the Times. “We were thinking, ‘Oh, we’ll have this great time in New York. We’ll see the pope and it will be a great experience.’” “He used us, he stole from us, and that’s it,” she said. Mena, who was acting as a substitute priest, made a good impression. “He smiled, talked about how good things were. There was never anything negative,” Joaquin Oviedo, a retired public highschool teacher, told the paper. “He was not a fire and brimstone kind of preacher.” “We had always been raised not to question authority figures,” Oviedo said. “He’s a priest—what he said is holy writ. We never imagined he was a phony.” Mena had been posing as a priest since the mid-1990s, appearing at parishes or prayer groups in Los Angeles, San Bernardino, Stockton, Fresno and Orange counties, then vanishing before Roman Catholic authorities could act, court papers indicated. AP
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A9
LA DA charges utility with crimes for gas leak
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OS A NGELE S —L os A nge le s pros e c utor s f i le d misdemeanor cr imina l charges on Tuesday against a utility for failing to immediately report a natural-gas leak that has been gushing nonstop for nearly 15 weeks. District Attorney Jackie Lacey said the charges aren’t a solution to the problem, but Southern California Gas Co. (SoCal Gas) needs to be held responsible for the leak that has uprooted more than 4,400 families. The charges came the same day the state attorney general joined a long line of others in suing the gas company for the blowout that has spewed more than 2 million tons of climate-changing methane since October. Lawmakers in Congress have urged the US secretary of energy to investigate the leak, and federal regulators are crafting new safety standards for underground natural-gas storage facilities. The criminal complaint charges the company with three counts of failing to report the release of a hazardous material and one count of discharge of air contaminants. The company said in a statement that it will vigorously defend itself in court. Arraignment is scheduled for February 17. If convicted, the company could be fined up to $1,000 per day for air pollution violations and up to $25,000 for each of the three days it didn’t notify the state Office of Emergency Services of the leak. The company said it discovered the leak last October 23 and notified state gas and oil regulators. But it failed to let state-emergency officials know until October 26, Attorney General Kamala Harris said in the latest of more than two dozen lawsuits filed against SoCalGas. The leak has created a public-health and statewide environmental emergency, Harr is sa id. T he l awsu it, wh ic h doesn’t specify damages, says
the company created a nuisance and violated health and safety codes and the state’s unfair-competition law. A spokesman said the company doesn’t comment on pending litigation and was focused on stopping the leak, which it expects to plug by the end of the month. SoCalGas said it paid $50 million through December to try to cap the leak and relocate people, but the number of families it has relocated since then has soared and work at the leaking well continues. It is also facing potential class-action lawsuits from residents and businesses as well as suits from regional air regulators and city and county authorities. Harris, a Democrat running for US Senate, is the first state official to sue, though her lawsuit incorporates elements of lawsuits filed by the city and county of Los Angeles. Severa l state agencies a re investigating the blowout and have issued orders to the gas company to stop it and turn over records of the 60-year-old well and others from the field that is the largest natural-gas storage facility in the West. The federal Pipeline and Hazardous Materials Safety Administration got involved for the first time on Tuesday, saying it is working to propose new regulations for gas storage and directing operators to “inspect and take immediate actions to ensure the safety of underground natural gas-storage facilities across the country.” State regulators are investigating the cause of the leak, but they said they won’t know until the well is plugged, which is expected by the end of the month. Local residents have reported symptoms including headaches, nosebleeds and rashes, among other woes. Public-health officials have blamed the maladies on odorant added to make the gas detectable. AP
OAS mission chief hopeful Haiti can settle political crisis
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ORT-AU-PRINCE, Haiti— After three days of meetings, the chief of a regional mission is hopeful but not necessarily confident that Haiti’s political crisis can be resolved before the scheduled end of the president’s term this weekend. At outgoing President Michel Martelly’s request, the Organization of American States (OAS) authorized the special mission to Haiti following the indefinite suspension of a runoff election to choose a successor before the February 7 constitutional deadline for him to leave office. Since arriving on Sunday, the OAS representatives have met with Martelly and officials of his administration, lawmakers, judges and others. Ronald Sanders, an Antiguan diplomat who is mission leader and chairman of the 35-nation OAS’s permanent council, said he was impressed with the “remarkable intelligence” of the Haitian officials, but he wouldn’t go so far as to say he was confident that they will agree on a workable solution in the next few days. “If I am to believe what people have said to us about their determination to save their country and to take it forward, then I believe there’s great hope that they will reach a solution,” he said on Tuesday in an interview with the Associated Press. Sanders said Haitian senators have proposed a plan that would see Martelly step down on schedule on Sunday. The presidency would remain vacant for a short term, with a consensus prime minister running the country until a new president could be elected. “To a man, everybody in that Senate room told us they had reached a single proposal which
they were putting to the government,” Sanders said. He said he heard that 10 people were being considered to be the caretaker leader. But some opposition figures are eager to derail any agreement that involves Martelly. “Martelly has no role he can play. The proposition being discussed is like something in a game by playing children,” said Samuel Madistin, who finished 10th in the opening round of the presidential election. Madistin now acts as spokesman for an opposition alliance t hat inc ludes Jude Celest in, who came in second and won a spot in suspended presidential runoff vote against Martelly’s preferred successor, first-place finisher Jovenel Moise. Celestin was boycotting the runoff. The opposition alliance wants a transitional government led by a Supreme Court leader to ensure a commission verifies disputed election results from rounds in August and October. Madistin has also said the OAS mission was “not welcome” in Haiti, which is a member of the regional group. Haiti had been scheduled to hold a presidential and legislative runoff vote on January 24. But the electoral council canceled it for a second time amid violent protests and allegations that the first presidential round was marred by fraud favoring Moise. Prime Minister Evans Paul remained in his post late Tuesday after a day of contradictory media reports about whether he had resigned to make way for an interim government. He is reportedly one of the leading candidates to become the shortterm caretaker leader, although various opposition factions will refuse to accept him. AP
In this January 27 file photo, an Aedes aegypti mosquito is photographed through a microscope at the Fiocruz institute in Recife, Pernambuco state, Brazil. The mosquito behind the Zika virus seems to operate like a heat-driven missile of disease. Scientists say the hotter it gets, the better the mosquito that carries Zika virus is at transmitting a variety of dangerous illnesses. AP/Felipe Dana
Higher temperatures make Zika mosquito spread disease more
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ASHINGTON—The mosquito behind the Zika virus seems to operate like a heatdriven missile of disease. The hotter it gets, the better the mosquito that carries Zika virus is at transmitting its buffet of dangerous illnesses, scientists say. Although it is too early to say for this outbreak, past outbreaks of similar diseases involved more than just biology. In the past, weather has played a key role, as have economics, human travel, air conditioning and mosquito control. Even El Niño sneaks into the game. Scientists say you can’t just blame one thing for an outbreak and caution it is too early to link this one to climate change or any single weather event. As the temperature rises, nearly everything about the biology of the Aedes aegypti mosquito—the one that carries Zika, dengue fever and other diseases—speeds up when it comes to spreading disease, said entomologist Bill Reisen of the University of California Davis. “With higher temperatures, you have more mosquitoes feeding more frequently, and having a greater chance of acquiring infection. And then the virus replicates faster because it’s hotter, therefore the mosquitoes can
400M
Estimated annual cases of dengue, which is transmitted by the same species of mosquito that carries Zika
transmit earlier in their life,” Reisen said. The thermodynamics of mosquitoes are “driven by temperature.” The hotspots for this Zika outbreak also have been temperature and drought hotspots recently. Recife, Brazil, the largest city in the Zika-struck region, saw its hottest September-October-November on record, about 1.2˚ Celsius (2.2˚ Fahrenheit) above normal, according to National Aeronautics and Space Administration data. The state of Pernambuco had its hottest and driest year since 1998,
according to the state weather agency. And globally, last year was the hottest on record. Scientists have studied Zika far less than other mosquito-borne diseases, so for guidance, they often look at dengue fever or chikungunya, which are transmitted by the same species of mosquito. Dengue infects as many as 400 million people a year, with a quarter of them sick enough to be hospitalized. Zika was just declared a global public-health emergency after being linked to brain deformities in babies in South America. Several thousand cases of microcephaly have been reported in Brazil since October, although researchers have so far not proven a definitive link to the virus. No vaccine exists for Zika. In general, mosquitoes don’t live long, maybe 10 to 12 days on average, said Tom Scott, a University of California Davis professor of both entomology and epidemiology. That’s also about how long it takes a virus to grow in the mosquito gut, making the bug infectious and able to spread the disease. Often the insect will die before it can get a chance to spread the disease. Warmer air incubates the virus faster in the cold-blooded mosqu ito. So t he insect ha s more time to be infectious and alive to spread the disease, Scott said. Warmer temperatures also make the mosquito hungrier, so it takes more “ blood meals” and can spread the disease to more people, Scott, Reisen and others
Many Ferguson residents worried about cost of US-mandated changes
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ERGUSON, Missouri—Many Ferg u son reside nt s e xpressed concern on Tuesday that a settlement with the US Department of Justice could financially ruin the Saint Louis suburb where a police officer fatally shot 18-year-old Michael Brown. About 100 people crammed into the tiny Ferguson City Hall chambers for the first public meeting on a proposal that seeks to avert a civil rights lawsuit against the city. An equal number of residents were turned away due to space limitations. The City Council could approve the agreement as early as February 9. The city has been under federal scrutiny since the August 2014 shooting of Brown, who was black and unarmed, by white Ferguson officer Darren Wilson. The killing led to protests and promoted a wave of national scrutiny about police use of force and law enforcement’s interactions with minorities. T h e J u s t i c e D e p a r t m e nt cleared Wilson in the shooting, but issued a report in March criticizing the city’s police force and
a municipal-court system that made money on the backs of the poor and minorities. Residents who spoke at Tuesday’s hearing were about evenly split on whether the city should go along with the agreement, which includes overhauling police policies, training and practices. Cost concerns were a common refrain among opponents. The cost of implementing the Justice Department-mandated changes would be significant— preliminar y estimates are at least $500,000, Mayor James Knowles said. The city already faces a $2.8 million deficit in part to legal fees, lost sales-tax revenue from businesses damaged in protests that followed Brown’s death, overtime costs for officers handling the protests, and lost revenue from municipal court changes already implemented. Knowles said in an interview that the city has already made cuts to pay and benefits for all employees. Ferguson voters will consider two tax increases in April—one imposing an economic-development
sales tax, the other a property-tax increase that would cost about $76 annually for a home worth $100,000. If voters turn down the tax increases, the city will have to make even deeper cuts, he said. “Obviously if we agree to this we’re going to have to find some way to fund it,” Knowles said. The city is also seeking grants to help fund improvements to the police force. Many of those opposing the consent agreement were white. Supporters were split between blacks and whites. Tom Sansevere, who is white, said the Justice Department should help pay for improvements. “Don’t put it on the backs of the people that really had nothing to do with any problems caused in the city of Ferguson. The residents here didn’t do this, but we’re going to pay for it,” Sansevere said. Blake Ashby, who is white, believes the agreement would lead to dissolution of Ferguson. “If you want to see Ferguson wiped off the map, sign this consent decree,” Ashby said. AP
said. And warmer temperatures generally increase the mosquito population. Kristie Ebi, a professor of global health at the University of Washington, calls it “a temperature-driven eruption.” That’s not the only role of weather. El Niño, a natural warming of parts of the central Pacific Ocean that changes weather worldwide, usually puts northeastern Brazil into a drought, as it did last year. Aedes aegypti does well in lessdeveloped regions in droughts, because it lives in areas where poorer people store water in outdoor containers, said Jonathan Patz, director of the global health institute at the University of Wisconsin. “As with all mosquito-borne viruses, climate is one of many factors that influence Zika transmission,” said Andy Monaghan, a scientist who works on public health impacts of climate change at the National Center for Atmospheric Research. “I think it is too early to say anything about the role of climate change in the ongoing Zika outbreak.” However, Monaghan earlier this year presented a paper to the American Meteorological Society’s annual convention that predicts that eventually Aedes aegypti “will move northward in the US due to future warming, which would expose people to the mosquito on a regular seasonal basis in states like Missouri, Tennessee, Kentucky, North Carolina, Virginia and [Washington] D.C.” AP
Court rules Australia can now send asylum seekers to Nauru
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ANBERRA, Australia—More than 260 asylum-seekers face the prospect of being deported from Australia to Nauru after Australia’s highest court on Wednesday rejected a challenge to the legality of the government’s refugee policy. A Bangladeshi woman, who cannot be named, had gone to the High Court to challenge the legality of Australia paying the tiny Pacific nation to detain asylumseekers who attempt to reach Australian shores by boat. The woman had been sent to Nauru in January 2014, but was brought back to Australia in August 2014, for medical help due to pregnancy complications. She had a child then gained a court injunction preventing her return to Nauru pending her court challenge. A total of 267 asylumseekers, most of whom came to Australia for medical treatment or to support a family member who needed treatment, have gained injunctions preventing their return to Nauru until the case was settled. But a majority of the seven judges ruled that the agreement in operation between the two countries since August 2013 was legal. The government’s policy is to never resettle in Australia any refugee who attempts to reach the country by boat. The parliament passed retroactive laws last year to firm up the legal basis of the Nauru deal. AP
A10 Thursday, February 4, 2016 • Editor: Angel R. Calso
Opinion BusinessMirror
editorial
Creating possibilities
H
ere’s something the government can go to town with, with the band: In a recent Best Countries rankings, the Philippines is the third best country in the world when it comes to starting a business! The exclamation point is there to tell all nations below us—including the mighty United States, Canada, Australia, China, India, and even rich neighbor Singapore—that we can be ahead of the pack… that we know how to make things work out right…if we try (apologies to Don McLean). The BusinessMirror is sharing this news because it makes us happy for the country to know that sometimes our government does its job right. More than 4,000 business decision-makers from all over the world rated the Philippines as the third best country—behind Thailand and Malaysia—to put up a business. The survey, which rated 60 countries on the different aspects of doing business, was initiated by US News & World Report, a multiplatform publisher of news and information, in partnership with BAV Consulting and Wharton School of the University of Pennsylvania. The survey adopted five equally weighted attributes that contribute to the ranking: affordability, bureaucracy, cheap manufacturing costs, connection to the rest of the world and provision to easy access to capital. According to the US News post, it takes about 29 days and costs 16.1 percent of the average income per capita to start a business in the Philippines. This information was taken from the World Bank. It added: Entrepreneurs need to undergo 16 independent procedures to connect with at least seven different agencies in the country to put up a business of their own. However, about 25 percent of the 320,000 business name registrations in 2015 were conducted online. This factor helped the country to rank higher in terms of starting a business. Unfortunately, the Philippines did not fare so well in the other aspects of the survey. We were No. 18 in “Best countries to invest in”; 25th in “Best countries to travel alone”; 24th in “Best countries for a comfortable retirement”; 31st in “Most forward-looking countries”; 33rd in “Best countries to headquarter a corporation”; 40th in “Best countries for education”; 33rd in “Best countries for raising kids”; 33rd in “Best countries to study abroad”; 41st in “Best countries for women”; 44th in “Most influential countries”; 36th in “Best countries for green living”; and 47th in “Most transparent countries”. In the other categories, here’s how the Philippines scored: 27th in “Quality of life”; 50th in “Power”; 16th in “Open for business”; 23rd in “Movers”; 40th in “Heritage”; 33rd in “Entrepreneurship”; 38th in “Cultural influence”; 38th in “Citizenship”; and 17th in “Adventure”. In conducting the survey, the US News and World Report said “globalization has expanded a country’s presence beyond its physical borders, and the 2016 Best Countries rankings seek to understand a nation’s worth beyond hard metrics.” Clearly, the Best Countries inaugural report showed the potential for the Philippines to drive global trade and investments. We can use a small advantage in the area of starting a business to attract investments. The Philippines is ideally positioned to advance in the age of Asean integration. The government must continue to adopt policies that create economic possibilities.
Why the stock market is not going higher John Mangun
OUTSIDE THE BOX
W
e think of “light” and “dark”. However, dark is the natural condition, an environment without light. We think of hot and cold but here again everything is cold until heat is added. When energy is put into the environment, then we have “light” and “hot”.
The stock market operates the same way. My observations of stock price movement lead me to believe that it operates much like the laws of physics. Rarely, for example, do prices change direction and trend from one day to the next. There is usually a pause at a top or bottom, much like a ball, when tossed into the air, must first stop going up before it reverses and starts going down. The laws of thermodynamics state that heat constantly moves out of an object, going from a “hotter” place to a colder place. If a
continuing source of energy is not added to the environment, the environment is going to grow colder. The stock market is always losing energy through “normal” selling to convert to cash for reasons unrelated to the stock prices, such as wanting cash to buy a new car, for example. We are told that prices went down because there was selling pressure. But in truth, it is buyers—not the sellers—that determine price movements virtually all the time. If buyers walk away, prices go down regardless of how much or little the “selling
We are told that prices went down because there was selling pressure. But in truth, it is buyers—not the sellers—that determine price movements virtually all the time. If buyers walk away, prices go down regardless of how much or little the “selling pressure” might be. Likewise, we have seen very highvolume days when prices went much higher even as there was much selling as evidenced by the high volume.
pressure” might be. Likewise, we have seen very high-volume days when prices went much higher even as there was much selling as evidenced by the high volume. Rarely do we have a low-volume day with prices going significantly higher, and if we do, prices usually go down the next day on even lower volume as buyers hold back. We have had seven major occasions since the historic high last April when prices have tried and failed to break out to the upside, with three happening since early December
A bad feeling about inequality
T
By Noah Smith | Bloomberg View
he hot topic in economic policy discussions is inequality. Lots of kinds of inequality have been increasing in the US —income, wealth, housing, longevity and almost everything else. New data has caused economists and the public to become more alarmed about the extent of the rise, and has allowed people to start having a productive discussion about causes and solutions.
People on the political right, especially libertarians, are always asking why we should even care about inequality in the first place. That might sound insensitive, but it’s actually a very good question. We might worry about inequality because an unequal society grows more slowly, or is more politically unfair or corrupt, or even is less healthy. But one big reason is simply that we care about our fellow citizens, and about other human beings in general. When one person has much more than another, it just feels wrong to many people. But if what we care about is human welfare, why are we looking at income or wealth inequality? These allow high consumption, but does consumption really bring people happiness? At low levels, it most certainly does—not having enough to eat, or a roof over your head, or clean running water definitely causes a huge reduction to happiness. But once basic needs are met, the relationship between income, wealth and happiness becomes much less clear. One may influencethe other, but there are many things besides income that matter a lot—social status, career satisfaction, family, friends, romance and even how long
people spend commuting. If we dislike inequality because of an innate sense of fairness, then the most important kind of inequality might be a disparity in personal happiness. In fact, some new research supports the idea that inequality of well-being is critical to many people. In a recent paper entitled “The Welfare Costs of Well-being Inequality,” economists Leonard Goff, John Helliwell and Guy Mayraz find that disparities in self-reported life satisfaction seem strongly correlated with a number of other important things. From their abstract: Inequality of subjective well-being has a negative effect on life satisfaction considerably greater than does income inequality…. This comparative result is stronger for those who report themselves as valuing equality…. Social trust, which has been shown to support subjective well-being both directly and indirectly, is more fully explained by well-being inequality than by income inequality. In other words, in regions where people are more unequal in terms of life satisfaction, they are also less satisfied with life on average and
If we dislike inequality because of an innate sense of fairness, then the most important kind of inequality might be a disparity in personal happiness. In fact, some new research supports the idea that inequality of well-being is critical to many people. In a recent paper entitled “The Welfare Costs of Well-being Inequality,” economists Leonard Goff, John Helliwell and Guy Mayraz find that disparities in self-reported life satisfaction seem strongly correlated with a number of other important things. they tend to trust other people less. Happiness disparities, even more than income disparities, mean that society feels like it just isn’t working for many people. How should this finding inform our policies to fight inequality? One lesson is that income and wealth redistribution, though helpful, will probably not be enough. Although higher income definitely makes people happier on average, it is only one factor. And as income levels increase overall, income probably becomes less important as a determinant of satisfaction —this is broadly consistent with the economics concept of diminishing marginal utility of wealth, meaning each additional dollar brings less pleasure than the one before it.
2015. These all occurred after an uptrend in price movement. Sellers did not stop the upside breakout. Why would they? They would be inclined to wait for even higher prices. It was the buyers that walked away at a certain level after 3 percent, 5 percent and 9 percent moves from bottom to top. Why is there a lack of consistency in the amount of the moves before buyers left, and then, why did buyers walk away at all during an uptrend? The Zeroth law of thermodynamics may explain it. Both buyers and sellers try to stay in equilibrium with a third force, in this case the economy. Therefore, buyers and sellers come into equilibrium with each other at a certain point. The bottom line may be that this current stock-market downtrend may mean the economy is not as exciting as the government experts want us to believe.
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.
So when we’re thinking about ways to equalize happiness in the US, Japan or Europe, we should consider policies beyond redistribution. One thing research teaches us is that most people are pretty content, but a few are miserable. Thus, using government policy to help the most dissatisfied will yield the biggest benefits in terms of reducing inequality of well-being. For example, since commuting does so much to diminish quality of life, we could encourage denser development and self-driving car technology, so that traveling to and from work takes less time and is less onerous. Health is another key to happiness, so we might want to invest in preventive medicine that helps people lead healthier lives instead of simply treating them once they become ill. Getting laid off is a big hit to well-being, so search services that help people rapidly find work might be a good investment. The most important policy to fight unhappiness, however, is probably the most direct. Major depressive disorders afflict millions of Americans, and are probably the biggest killer of well-being. Including depression treatment in health insurance, and even subsidizing treatment, would be a frontal assault on unhappiness. A major reduction in depression would greatly boost equality of well-being. So in addition to redistribution, US policy-makers should be thinking about what they can do to help our least happy citizens. We owe it to them.
Opinion BusinessMirror
opinion@businessmirror.com.ph
Painful remnants of World War II Ariel Nepomuceno
DECISION TIME
E
mperor Akihito and Empress Michiko charmed their way into the hearts of the Filipinos when they visited the country just last week to celebrate the 60th anniversary of Filipino-Japanese relations. Dignified, simple and gentle were the ways of the royal couple as the country watched them pay their respects to Filipinos who waged their lives in World War II at the Heroes’ Cemetery. Historical statistics reveal that more than 1 million Filipinos and around half-a-million Japanese perished in this war. The Emperor recognized the countless deaths, injuries and sufferings brought about by the war and the trauma that it left to those who have directly experienced it. Deep regrets were communicated by the couple about the abuses committed by the Japanese Imperial Army against our soldiers and, most of all, innocent civilians including women and children. As a result, he repeatedly stressed the importance of remembering the evil effects of war and that all efforts should be exerted to avoid it. This comment is particularly relevant in the midst of growing tension among countries in this region due to the maritime disputes with China.
the Lila Filipina—are disappointed that their plight and quest for justice have not been addressed by the President. These groups are demanding an apology, compensation and acknowledgement in historical books or accounts that comfort women and the atrocities committed against them are, indeed, factual and not fictional. While there were attempts to pay “atonement” money to some of the victims, the funds came from private donors and not from the Japanese government itself. Worst, the donations were scant and not commensurate to the inhuman treatment they received from the Japanese soldiers. Most of these comfort women have passed away and the ones remaining are so advanced in age that their families are losing hope.
Horrors of the war
But while the emperor and the empress articulated their utmost sympathy, Filipino comfort women, mostly in their 70s to 80s, rallied in front of the Japanese embassy, crying foul about the way both the Filipino and Japanese government completely ignored their cause. Comfort women were victims of sexual slavery and abuse during World War II. War documents and journal show that more than hundreds of women were systematically raped, abused, tortured and forced to do servant duties in comfort stations or brothels maintained by the Japanese troops. Because of the stigma, most of these women have chosen to keep silent and it was only in the 1990s that some of them went out to tell their agonizing stories.
A future with hope Msgr. Sabino A. Vengco Jr.
Alálaong Bagá
I
N His loving-kindness, God does not forsake the work of His hands; He gives us strength when we call on Him; and He fulfills His purpose for us (Psalm 138:1-2, 2-3, 4-5, 7-8). Jesus called Simon Peter to serve, and the man was terrified as he knew himself to be a sinner, but Jesus told him not to be afraid because he would be doing what He commanded him to do (Luke 5:1-11).
Steadfast love that endures forever The psalmist, with all his heart, directly praises and thanks God for His loving-kindness. And the reason for this thankfulness is the fact that God has heard his prayers and his cries, apparently during his time of great distress. He called for help and God answered him and built up his strength within him. Now he sings praises to God’s name in the sight of His angels and in the presence of all in His holy temple. Indeed, God is faithful to His covenant with the people and keeps His promise; that
If it was God who created him, God is not going to abandon him. The psalmist confesses his trust in the Lord and His purposes, that God’s steadfast love will also be revealed in His commitment to the future completion of what He has intended for His servant.
Do not be afraid, you will be catching men
is why the psalmist has his personal experience of divine goodness and truth to proclaim to the world. In fact all nations and all the kings of the earth should praise and thank the Lord, when they hear of His revelation and of His purposes, of His greatness and of His goodness. God has exalted His name above everything; He is even greater than has ever been thought of before. The psalmist ends with a note of confidence that God’s love and faithfulness will endure forever, and hopefully God will never forsake His creatures, the work of His hands.
The command of Jesus to Simon Peter, “Put out into deep water and lower your nets for a catch,” carries a deeper meaning that shows when at the end of the Gospel narrative Jesus told him that “from now on you will be catching men.” Simon and his companions had a religious experience with their miraculous catch of fish that filled their two boats almost to the point of sinking. They sensed divine power at work in and through Jesus whom they now called “Lord.” They were overwhelmed and dwarfed by divine fullness and abundance. Simon felt his inadequacy and sinfulness in the presence of the Transcendent. Instead of embracing fullness, in his fearfulness he wanted it to go away. But Jesus had something else in
time, April 15 of the following year, or a period of 14 months. The taxpayer, on the other hand, is denied the use of that money for the same period and this may even continue longer if the total tax withheld exceeds the year-end tax liability because then, that amount is locked up with the government until the amount is offset against future taxes or is refunded. In Revenue Regulations 2-98, the BIR saw the unfairness of these rules and tried to soften its implementation by allowing the claiming of deductions despite failure to withhold provided that taxpayer pays the amount not withheld, including penalties, upon investigation. However, the current tax administration reversed this position and clarified that no deduction will be allowed for an expense not subjected to withholding despite payment of the deficiency withholding taxes. In addition, stricter penalties for noncompliance with withholding rules were introduced such as the non-deductibility of the expense for failure to supply all the required information in the alpha list. The penalties imposed under the Tax Code for noncompliance with withholding-tax laws and regulations cover the following infractions: (a) failure to remit; (b) failure to withhold; (c) incorrect rate of withholding; and (d) failure to supply information. In the imposition of these penalties, the law does not make a distinction as to the nature and gravity of the infraction. For example, a taxpayer who withholds the tax but does not remit the amount collected is slapped with the same penalty as the one who simply fails to withhold. Surely, one who collects the tax and use it like his own is committing a much graver offense than the one who simply fails to comply with an obligation to withhold.
Since time immemorial, deficiency withholding taxes has not been the subject of tax compromises or amnesties on the premise that these are government funds in the hands of private persons. But this is not true if the offense is only for failure to withhold. That is why, in penalizing the offense, a distinction has to be made based on the nature and gravity of the offense. Statistics would show that most investigations conducted by the BIR have resulted in deficiency withholding taxes such as the creditable withholding tax, final tax and even withholding tax on compensation. In most cases, taxpayers just offered to pay the amount not withheld (plus penalties) so that the related expense will be allowed as deduction from taxable income. With the recent change introduced by the current commissioner, taxpayers will no longer be given this concession beginning 2013. The state of our current withholdingtax rules is something that deserves a serious study and consideration for adjustment. Many taxpayers are perennially assessed for failure to withhold or for applying the incorrect rate, which, to me, is an indication of the complexity of our WTS and the difficulties complying with it. Everyday complaints against the withholding-tax structure include: 1. Rates being too high resulting in excess tax payments for many taxpayers. Businesses operating on thin spread, such as those in trading, ends up in excess taxes every year that adds up to significant amount. 2. Guidance for the characterization or classification of the income payment is inadequate, resulting in improper rate being used.
mind. Told not to be afraid, Simon was informed that he would “from now on...be catching men”; as Jesus has caught him, he is to catch others. He is to use his experience with Jesus to bring others to the same experience, being gathered into God’s loving embrace and saved from the abyss through the salvific work of Jesus Christ. In their new life with Jesus, they would put out into the deep and cast a different net and gather in believers beyond number. Alálaong bagá, in the inauguration of His mission of salvation, Jesus called followers to join Him in gathering the people to God. Jesus summons His disciples to service even in their sinfulness and inadequacy. He will fulfill His purpose for them; He will be the strength of their soul. As we have received the faith, in turn we are to hand it on to others. We have been hearing these days that we Filipinos are destined as missionaries of Asia and to the world. 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.
Worst collateral victims
War and its disastrous consequences should be viewed not only from the angle of how intense the participants engage in violent battles. The biggest losers in a war are women who, in the current state of things, are already victims of sociopolitical inequities. They suffer gross violations of human rights. And because rape has been used as a systematic weapon of war, the inequity becomes even more pronounced and raised to a level of horrifying dehumanization. The effects linger for years even long after the war has ended. Thus, the pleas of the comfort women are but reflections of the need to involve affected women in policy development and decision-making processes in post-armed conflict scenarios after a war that should not have occurred in the first place.
Postwar struggle
Two groups—the Malaya Lolas and
Antibusiness Tax Code provisions Atty. Benedicta Du-Baladad
Tax law for business Part Two
Cruelty of the withholding tax system
L
et me begin by saying that under the withholding-tax system (WTS), the tax required to be paid or remitted by a taxpayer is not actually a tax imposed on his own income. It is not his own tax liability. Rather, it is a tax due from another taxpayer of which he is obliged to collect and remit to the government. When one files a withholding-tax return, he is not paying his own tax liability. He is only remitting the tax collected by him for the account of another taxpayer.
The WTS is actually a business-process outsourcing (BPO) arrangement whereby the Bureau of Internal Revenue (BIR) outsources its collection function to taxpayers. Payors of income are constituted as agents of the government in the collection of taxes. The only difference is that, these withholding agents are not paid for doing the outsourced work. On the contrary, on the strength of the state’s taxing and police powers combined, nonperformance is severely punished with penalties far greater than nonpayment of one’s tax liability. Under the Tax Code, failure to properly comply with the withholdingtax rules is slapped with the following penalties: 1. The amount paid or payable cannot be allowed as a deductible expense from the taxable income of the
Thursday, February 4, 2016 A11
withholding agent. This includes depreciation or amortization on assets purchased on which a withholding is required. (Section 34K, Tax Code) 2. The withholding agent is liable for the amount of tax not withheld and/ or remitted, including surcharges, deficiency interest and delinquency interest. (Section 251, Tax Code) 3. In case of failure to supply the required information, such as the alpha list, withholding agent is liable for penalty ranging from P1,000 to P25,000 (Section 250, Tax Code). If such failure is willful or deliberate, it shall also be punished with imprisonment from one year to three years (Section 255, Tax Code). A single violation of nonwithholding makes one liable not only for penalties, but also for the amount not withheld and remitted. But more alarming is
the disallowance of the expense as a deduction from the gross income of the withholding agent exposing him to an outright additional tax payment equivalent to 30 percent of the amount not subjected to withholding tax. These penalties provide a good source of income for the government, generating far bigger revenue than the tax that would have been collected if there was compliance with the WTS regulations. Additional revenue will come from three sources, to wit: 1. Payment of the amount not withheld, including penalties; 2. Payment of additional income tax equal to 30 percent of the disallowed expense due to nonwithholding; 3. Payment of the corresponding income tax by the income recipient upon filing his annual income-tax return. If there was proper withholding, the government’s income would only be to the extent of the amount required to be withheld. In the above enumeration, it is only that in 1. Note that except in final taxes, failure to withhold the required tax does not deprive the government of that tax. This same amount will be recovered later on when the income recipient pays his income-tax return at year-end. At most, the government only loses the chance to use that money in advance. Also, it may lose the audit trail in tracking income recipients. The Tax Code requires that income tax shall be determined on a yearly basis, and payment thereof is required not later than April 15 of the following year. But through the WTS, the government is able to collect in advance, as early as February 15 of the current year, the tax that is supposed to be due at a much later
3. The required default rate of 1 percent or 2 percent on purchases of goods and services not covered by specific WTS imposed on top 20,000 corporations (TTC) is an impossible task and chaotic for many businesses. Would salesmen, employees or even officers claiming reimbursable business expenses carry withholding-tax certificates ready to be issued every time they pay for meals, transportation or lodging? Because of the impossibility of complying with this rule, a practice has developed among businesses to just shoulder (or gross up) the tax required to be withheld and remit it to the BIR. But this practice may distort reporting, especially if such reports (like alpha lists) are used to track down income recipients. 4. The cost of complying with withholding-tax requirements has become too expensive. The Philippines used to be one of the countries with best practices in withholding tax. With the changes introduced over time, that may not be the case anymore. Thus, this request to consider changes in the withholdingtax structure as part of a tax reform giving due consideration to the concerns raised in this article. The author is the managing partner and CEO of Du-Baladad and Associates Law Offices (BDB Law), 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 e-mail the author at dick.du-baladad@bdblaw.com.ph or call 403-2001 local 300.
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