BusinessMirror February 26, 2015

BusinessMirror

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

U.N. Media Award 2008

www.businessmirror.com.ph

A broader look at today’s business

n

TfridayNovember 10 10 No.No. 40 Thursday, February18,26,2014 2015Vol.Vol. 140

P25.00 nationwide | 6 sections 30 pages | 7 days a week

SY-COSON SAYS SM AND TRINOMA CAN HAVE THEIR RESPECTIVE LRT-MRT COMMON STATIONS AS COMPROMISE

INSIDE

SM ready to end feud with Ayala

By Lorenz S. Marasigan

health&fitness

a passage to history and adventure D

Life

The legacy in life

EAR Lord, in life, make our intelligence be fruitful as we share to others a part of being admired. With our wealth, let it be given part of it to charity; not a reason to be envied. May our power be put to advantage by being a good leader; not to be feared. May our daily blessings with a good heart and deep faith help us be remembered always. It is not about wealth, power and intelligence but the legacy in life, behind those people we have touched and how we offered them for the glory of God. Amen.

YETTA CRUZ AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

BusinessMirror

Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

THE panoramic view of the historical Ticao Pass taken from the peak point of Altamar Resort.

PHOTOS BY ZARDO A. AUSTRIA; SPECIAL THANKS FITA ARCENAS AND RAFAEL SANTILLAN

AT THE OSCARS: SCREENING LOVE AND LIES »D3

Thursday, February 26, 2015

D1

A passage to history and adventure B Z A. A

N

ESTLED between the Bicol region’s remotest town of Bulan in Sorsogon and the picturesque island of Ticao in Masbate is Ticao Pass, whose strategic location has played an important role in Philippine history since the Spanish colonial times.

According to former History and Literature teacher Manuel “NongNong” Altarejos, the Ticao Pass served as the passage to the Philippines, the port of entry for the historical Acapulco-Manila Galleon Trade which was the first known Trans-Pacific trade between the Americas and East Asia. The trade, which flourished for 250 years, transported the best of

Philippine goods to the other side of the globe.

“It followed the route via Mexico, through the port of Acapulco, then over land to Vera Cruz, until our wares reached Spain and other parts of Europe,” NongNong describes.

Remarkably, he adds, Ticao Pass also became the historical venue of some of the fiercest naval battles ever mounted in the country, foremost of which were the Battles of La Naval de Manila, fought in 1646, and the Battle of Leyte Gulf in 1944.

With Ticao’s rich historical connection and innate charm, it was no surprise that NongNong’s elder sister, Marilyn Altarejos, decided to touch base on the island the second time around.

C  D

life

D1

dozens of christians abducted BusinessMirror

Japan firms on overseas buying spree

Thursday, February 26, 2015 B3-3

Dozens of Christians abducted

by Islamic militants in Syria

In this november 7, 2014, file photo, Malaysian opposition leader Anwar Ibrahim is greeted by his supporters as he returns from a Friday prayer to a court house during the final hearing of his sodomy conviction in Putrajaya, Malaysia. AP

Family seeks royal pardon for jailed Malaysia’s Anwar

K

UALA LUMPUR, Malaysia— The family of jailed Malaysian opposition leader Anwar Ibrahim has sought a royal pardon in a last-ditch effort to try free him from a sodomy conviction.

Anwar, 67, began a five-year prison sentence on February 10 after Malaysia’s top court turned down his final legal appeal, ruling there was overwhelming evidence that he sodomized a former male aide. Nurul Nuha Anwar, his second daughter, said in a statement late Tuesday that there has been a “miscarriage of justice” against her father, whom she described as a “political prisoner”.

“The court may have pronounced a guilty verdict but our father is innocent,” she said. “We placed our confidence in the constitutional process and believe that justice will prevail when all the facts are scrutinized without political intervention.”

The case was widely seen as politically motivated to eliminate threats to the ruling coalition, whose popularity has eroded in the last two elections. Anwar, who was seen as the most potent political threat to the government, was accused of

sodomizing a former lowly aide in 2008. Homosexuality is a crime in Muslim-majority Malaysia, punishable by up to 20 years in prison and by whipping, although prosecutions are rare. Ibrahim Suffian, political analyst with the Merdeka Centre think tank, said he was surprised by the family’s move, as requesting a pardon implied Anwar was guilty.

“The application can be viewed as a humanitarian gesture by the family, who is worried about his health,” he said.

It was the second time Anwar was jailed for sodomy in just over a decade. He previously was imprisoned for six years after being ousted as deputy prime minister in 1998 on earlier charges of sodomizing his former family driver and abusing his power.

He was freed in 2004 after the top court quashed that sodomy conviction. Anwar led his alliance to unprecedented gains in 2008 elections and made further inroads in 2013 polls. The ruling National Front coalition won with a slimmer majority and lost the popular vote to the opposition. AP

Republicans blink, try to avert Homeland Security shutdown

SenAte Minority Leader Harry Reid of nevada pauses during a news conference on Capitol Hill on February 24 to urge Republicans to support a “clean bill” to fund the Homeland Security Department as that agencies budget expires later this week. AP

W

ASHINGTON—Republicans trying to avert a partial shutdown of the Homeland Security Department offered on Tuesday to allow a vote on a bill to fund the agency—stripped of provisions that would overturn President Barack Obama’s executive actions on immigration.

Senate Republican Majority Leader Mitch McConnell made the offer as his party struggled to escape a political predicament of its own making involving a partial closure of an agency with major antiterrorism responsibilities.

The House of Representatives has passed a Homeland Security funding bill that includes the repeal of immigration policies Obama put into effect in 2012 and last fall. But in the Senate, Republicans lack the 60 votes needed to overcome blocking actions by minority Democrats.

Spending for the Homeland Security Department expires on Friday at midnight if Congress doesn’t act before then. However, any shutdown would only be partial. Of the department’s 230,000 employees, some 200,000 would continue to report to work because they are

deemed essential for the protection of human life and property. That includes workers at airport security checkpoints, front-line workers at Customs and Border Patrol, the Coast Guard and the Secret Service, which protects the president and other dignitaries.

Even so, Democrats are raising the specter of terrorism and the Republicans are countering that it is the president’s party that is preventing an orderly renewal of funding for the department. Obama’s executive actions on immigration have been a top source of tension between the White House and Republicans, who won majorities in both chambers of Congress in elections last November.

Senate Republican officials said McConnell proposal would eliminate an attempt by the House to repeal a presidential order that allows tens of thousands of immigrants to remain in the country if they were brought here illegally as youngsters by their parents. It would envision a vote on a separate measure to repeal a directive from Obama last fall that shields about 4 million immigrants from deportation even though they live in the US illegally. AP

In this photo taken on June 23, 2014, fighters from the Islamic State (IS) group parade in a commandeered Iraqi security forces armored vehicle down a main road at the northern city of Mosul, Iraq. IS militants have abducted at least 70 Assyrian Christians, including women and children, after overrunning a string of villages in northeastern Syria, two activist groups said on February 24. AP

B

EIRUT—The Islamic State (IS) militants struck before dawn, staging house-to-house raids in a cluster of villages nestled along the Khabur River in northeastern Syria. They abducted at least 70 Christians—many of them women and children—while thousands of others fled to safer areas.

The captives’ fate was unclear on Tuesday, a day after they were seized, and relatives said mobile-phone service was cut off and land lines also were not going through, adding to the fear and uncertainty about their loved ones. Heavy fighting was reported in the area.

The IS group has a history of killing captives, including foreign journalists, Syrian soldiers and Kurdish militiamen. Most recent, militants in Libya affiliated with the extremist group released a video showing the beheading of 21 Egyptian Christians.

The group’s bloody campaign in Syria and Iraq, where it seeks to form a self-styled caliphate, has repeatedly targeted religious minorities since it took control of a third of both countries. The US and coalition of regional partners are conducting a campaign of air strikes against the group.

The militants struck near the town of Tal Tamr in Hassakeh province, an area predominated by Assyrian Christians. Most of the captives came from Tal Shamiram and some from Tal Hurmiz.

Nuri Kino, the head of a group called A Demand For Action, said between 70 and 100 Assyrians were taken captive. About 3,000 people

fled and have sought refuge in the cities of Hassakeh and Qamishli, he said, adding that his activist group based its information on conversations with villagers who fled the attack and their relatives. His group focuses on religious minorities in the Middle East.

“Have they been slaughtered? Are they still alive? We’re searching for any news,” said an Assyrian Christian woman from Tal Shamiram who now lives in Beirut. The woman said she has been trying to find out what has become of her parents, her brother and his wife and their children, but couldn’t reach anyone in the village.

“I feel so helpless, I cannot do anything for them but pray,” she said, speaking on condition of anonymity for fear of endangering relatives believed to be held by the militants.

The Britain-based Syrian Observatory for Human Rights, which also reported the abductions, put at 90 the number of Christians held by the IS group. The Observatory relies on a network of activists inside Syria.

Both groups said that most of the captives come from Tal Shamiram, located some 85 kilometers (50 miles) southwest of the provincial capital of Qamishli, and nearby

Tal Hurmiz. At least four civilians, including a 17-year-old, were killed in clashes later Monday, a relative of one of the victims said on condition of anonymity.

The extremists could use the Assyrian captives to try to arrange a prisoner swap with the Kurdish militias it is battling in northeastern Syria. Last year IS militants abducted more than 150 Kurdish boys and held them in a school in Aleppo province where they subjected them to daily instruction on militant ideology for five months before releasing them in batches.

The group has also released Turkish truck drivers and diplomats after holding them for months. It was not known whether a prisoner deal was struck in those instances.

The US “condemns in the strongest possible terms” the abduction of the Christians by IS militants and demanded their immediate release, according to a statement released by State Department Spokesman Jen Psaki. “[IS]’s latest targeting of a religious minority is only further testament to its brutal and inhumane treatment of all those who disagree with its divisive goals and toxic beliefs,” Psaki said.

Hassakeh province is strategically important because it borders Turkey and areas controlled by IS in Iraq. Kurdish militiamen from the People’s Protection Units, or YPG, backed by the coalition air strikes, have made advances in the province in a new offensive launched this week. Heavy fighting broke out in the province on Monday as Kurdish fighters and IS militants battled for control of villages near the Iraqi and Turkish borders.

The Kurds have been one of the IS’s most effective foes, a reputation they burnished in recent months by

repelling an assault by the extremists on the town of Kobani on the Turkish border. The coalition carried out hundreds of air strikes that helped the Kurds break the siege in January.

On Tuesday heavy clashes between Kurdish fighters and IS militants raged near Tal Tamr.

The Assyrian woman in Beirut said that before Monday, clashes would occasionally break out near Tal Shamiram, but that IS militants were mostly on Mount Abdulaziz, some 25 kilometers to the south.

“My family visited me last month and returned to Syria. There were clashes, but it was normal, nothing exceptional,” she said, her voice breaking with emotion.

The IS group’s online radio station, al-Bayan, said on Tuesday that IS fighters had detained “tens of crusaders”—the term it frequently uses for Christians—and seized 10 villages around Tal Tamr after clashes with Kurdish militiamen.

It reported an intense movement of coalition planes over Hassakeh.

The US Central Command said the coalition carried out 10 air strikes near Hassakeh on Monday, striking at nine IS tactical units and destroying two of their vehicles.

The Assyrian Network for Human Rights in Syria said on its Facebook page that the militants had moved the captives to the village of Umm al-Masamir on Mount Abdulaziz, some 25 kilometers south of Tal Shamiram. That raised fears, the network said, that IS could use them as human shields against Kurdish militiamen. Habib Afram, president of the Syriac League in Lebanon, said he was in contact with Assyrians in Hassakeh and expressed hope that the captives could be freed in some kind of swap, although he added that he didn’t know of any formal talks. AP

C

Asia may have seeded European plague outbreaks, study says

N

EW YORK—Scientists say they may have solved a centuries-old whodunit: Why did Europe experience outbreaks of bubonic plague over hundreds of years, starting with the Black Death of 1347 to 1353?

Maybe you can blame gerbils in Asia. The disease is caused by a bacterium that lives in rodents. The general thought had been that once the germ arrived from Asia to kick

off the Black Death, it settled into European rodents and periodically jumped to humans until it disappeared in the early 1800s.

But now, scientific sleuths are suggesting that the true source of those periodic outbreaks was Asia.

Maritime trade may have inadvertently imported the disease repeatedly from its ultimate reservoir, great gerbils and other small mammals in Asia, they suggest.

“I don’t think there was any sustainable reservoir in Europe,” Nils Stenseth of the University of Oslo said on Tueday in an e-mail.

He and co-authors make their case in an article published on Monday by the Proceedings of the National Academy of Sciences.

Their smoking gun is ancient tree rings that preserve fine-grained records of climate in Europe and Asia.

Plague jumps from wild rodents

to humans in response to climate shifts, and the scientists looked to see if they could match those shifts to the times of regional outbreaks.

They found no evidence of a European reservoir for the disease.

But climate records from Asia told a different story. The researchers identified 16 possible instances between 1346 and 1837 in which plague might have arrived at a European port from Asia. AP

World

B3-3

‘he will figure it out’ Sports BusinessMirror

C1

| Thursday, February 26, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

JACK NICKLAUS says Tiger Woods needs a “positive thing” to make it happen. AP

‘HE WILL FIGURE IT OUT’ Jack Nicklaus: I think Tiger Woods will turn it around. He’s too dedicated, he works too hard at it, he’s got too much talent. He’ll figure it out. And, personally, I think he needs to figure it out himself. Because a teacher can’t teach what’s inside your head. You’ve got to be able to put that positive thought into your head yourself.

By Doug Ferguson

The Associated Press

OS ANGELES—Jack Nicklaus isn’t ruling out Tiger Woods breaking his record of 18 major championships provided he rediscovers his game.

Nicklaus said recently on Golf Channel that Woods will have to do that on his own.

“You go through things, and you have to have a positive thing happen to you to turn it around,” Nicklaus said. “I think Tiger will turn it around. He’s too dedicated, he works too hard at it, he’s got too much talent. He’ll figure it out. And, personally, I think he needs to figure it out himself. Because a teacher can’t teach what’s inside your head. You’ve got to be able to put that positive thought into your head yourself.”

Woods, coming off an injury-plagued season that caused him to miss two majors—the FedEx Cup playoffs and the Ryder Cup—began his 2015 campaign with a career-high 82 to miss the cut in the Phoenix Open and withdrawing after 11 holes at Torrey Pines with tightness in his lower back.

He said the tightness was not related to the back surgery he had last spring that kept him out a combined seven months. Woods decided not to play the Honda Classic next week and said he won’t return until his game is ready for tournament competition.

L

“Tiger is struggling. I don’t think there’s any question about that,” Nicklaus said. “I think he’s struggling more between his ears than he is any place else. He’s struggled with the driver most of his life really, but he’s always been able to find the golf ball and get it somewhere back around the green.

“And now he’s having trouble with the short game,” he added. “That is not a good combination, to drive it poorly and have a bad short game.”

Nicklaus spoke on Golf Channel from Doral, site of the Cadillac Championship. The Jack Nicklaus Villa at Trump National Doral was unveiled on Friday.

Woods has been linked to Nicklaus for his entire career, mainly because of the benchmark Nicklaus established with his 18 professional majors. As a kid, he had a chart taped up in his bedroom of what Nicklaus accomplished at various ages as an amateur.

Woods won his 14th major in the 2008 US Open at Torrey Pines, a week before he had reconstructive knee surgery. He was ahead of pace then, but he has gone six years without winning a major, and he hasn’t played in six majors since his last victory because of injuries.

Nicklaus said he still thinks Woods will eclipse his record, a question the Golden Bear has been asked more than any other over the years. He once joked about the headlines he would create if he ever answered, “No.” “I still do. Why would I not think that?” Nicklaus said.

“He’s got a lot of golf in front of him. But it’s going to

be up to him. He’s still got to do it. He may, he may not.

Obviously, chances are harder for him now than five years ago, but I still think he has time on his side.”

FROM CLEVER TO CRUEL

NO one summed up the 10th hole at Riviera as well as Ryo Ishikawa of Japan.

“Fun hole to watch. Tough to play,” he said during the opening round of the Northern Trust Open.

What many consider to be the best little par 4 in America—and among the best in the world—received even more attention last week at Riviera when it went from being clever to at times cruel.

Vaughn Taylor, in contention and headed toward another top 10 that would have got him in the Honda Classic, found the front bunker on Sunday. He went over the green into the back bunker, hit a poor shot that stuck in the sand on the slope, knocked that one back down toward his feet and holed a 15-footer from the fringe for a triple bogey.

Defending champion Bubba Watson, who earlier in the week professed to be “scared to death of the hole,” was two shots out of the lead and made double bogey.

Was it over the top?

More than one player trudged off the 10th believing the joy had been sucked out of the 315-yard hole. There was ample evidence, especially on Thursday and Sunday with a far right pin, of shots that had plenty of spin taking

a hard hop and catching enough of the slope to roll off the green, either in the collection area of in a bunker.

The response from Riviera superintendent Matt Morton? Welcome to our world.

With all the chatter about so much sand from so many bunker shots building up the green, Morton said the real culprit was a long drought creating firm conditions.

“The main difference is three firm years in a row,” he said. “During the Northern Trust Open, it’s usually wet and you deal with rain. We’re in a drought. You’re seeing three years of dry, firm conditions. We’ve been able to showcase the hole the way members play in the summer.”

It began to rain heavily on the back nine on Sunday, and when Dustin Johnson and James Hahn reached the 10th hole in the playoff (the second extra hole), it helped slightly to be able to get their flop shots on the green.

That said, they were flop shots of the highest quality.

And that remains the secret to the 10th hole. Great shots are rewarded, but they better be great. Vijay Singh showed that with his bunker shot in regulation to 9 feet for birdie. Taylor did not with his bunker play.

It all goes back to Ishikawa.

A couple of caddies walked off the back of the green toward the 11th tee and whispered, “Greatest hole in golf.” Players would be a few steps behind and could be heard to mutter, “Worst hole in golf.”

Fun to watch. Tough to play.

OLD CAPTAIN, ‘NEW’ CAPTAIN P

ALM BEACH GARDENS, Florida—Davis Love III was on his porch in Sea Island taking part in a conference call for the first Ryder Cup Task Force meeting, and he was shocked by what he heard.

First, the Professional Golfers’ Association (PGA) of America really was going to let the players have a voice.

And then it quickly became clear the choice was going to be him.

Love was introduced on Tuesday afternoon as US captain for the 2016 matches at Hazeltine.

And while it appeared as though the Americans were looking in their past, he was presented as the start of a new model they hope can end two decades of European dominance.

He also was captain in 2012 at Medinah when Europe staged the biggest rally by a visiting team.

“I’m here with the same goal I had in 2012, but not as the same captain,” Love said.

Love was part of an 11-member task force—eight of them former Ryder Cup players—that met twice since December.

The agenda for the first meeting was to define the role of the captains and assistant captains, and then to throw out names. Among those mentioned were Fred Couples, Steve Stricker and Love.

Phil Mickelson, whose biting comments at Gleneagles regarding Tom Watson’s style was the impetus for the task force, said the qualities of a captain included someone who was respected, didn’t let his ego keep him from listening, some who could take the blame

and share the credit, and who had the experience to build a blueprint for the next 20 years.

“There’s only one guy who fits that bill,” Mickelson said.

The PGA of America also announced changes to the US team to boost its chances.

Qualifying for the top 8 players will end after the first FedEx Cup playoff event (The Barclays) instead of the PGA Championship. Three of the four captain’s picks will be selected after the third playoff event (BMW Championship), while the final pick will be selected after the Tour Championship.

With a crowded schedule in 2016 because of the Olympics, that means the 12th player will be chosen five days before the matches begin.

Also, two of the vice captains will be former captains, and the other two will be players with Ryder Cup experience.

Love already has selected Tom Lehman, the 2006 captain, to help him at Hazeltine. Lehman is from Minnesota.

Mickelson said the task force realized it had its captain after the first meeting, but it met again in early February and reached the same conclusion. The vote was unanimous the first time around.

More than a captain they wanted, Mickelson said the players felt they had partial ownership in the future.

“We went from having zero input and zero continuity, and both of those things the Ryder Cup Task Force has solved,” Mickelson said.

Love is the first US captain to get another chance since Jack Nicklaus in 1987, and the first since Jack Burke Jr. in 1973 to get a second chance after losing. And he can expect

to be involved in more Ryder Cups after Hazeltine.

Mickelson said he wouldn’t rule out Love returning as captain in 2018, but “for sure a vice captain.”

“It’s not just a two-year commitment,” Mickelson said.

“Really it’s a four- or six-year commitment to get the thing started.”

Europe last week selected Darren Clarke to be captain for Hazeltine.

Tiger Woods, who was part of the task force, congratulated Love in a statement and said he respected him as a person, player and captain. Woods, Mickelson and Love will be part of the “Ryder Cup Committee,” along with three PGA officers, to resume the work of the task force.

Love said he “didn’t go in asking” to be captain again.

“I could not be more excited to captain the 2016 team,” he said. “But I agreed to do it for one reason. The members of the task force, to a man, have said they will do whatever it takes for this team to be successful. They are all in. Our team will trust each other and we will have a shared vision.”

Love said if he had been in the room, instead of on a conference call, when the names of potential captains were being written on a board, “I probably would have walked out” when his name appeared.

More than the task force choosing him, he was excited that the task force was involved in the first place.

“It was more the process,” he said. “In a text during a break to Steve or Jim [Furyk], we were like, ‘They’re actually going to let us pick the captain.’ I don’t know what I expected when I walked in there. I thought that I’d be giving advice.” AP

Teresita T. Sy-Coson, an adviser to the board of SM Prime Holdings Inc., said her company is willing to find a compromise deal with Ayala Land Inc. for the location of the common station, which is expected to bring additional foot traffic to the malls near the train systems in North Edsa, Quezon City.

Continued on A2

The World

news@businessmirror.com.ph

T

Sports DAVIS LOVE III is presented as the start of a new model the Americans hope could end two decades of European dominance in the Ryder Cup.

C1

LGUs LOSING P12B ANNUALLY ON VALUATION OF PROPERTIES

he group of property and retail magnate Henry Sy is open to the idea of building two common stations to link three overhead railway lines in Metro Manila, instead of fighting with its rival over the location of one common station.

anon Inc., Japan Post Holdings Co. and Itochu Corp. have led $28 billion of purchases abroad so far this year, the fastest start on record for Japanese acquirers, according to data compiled by Bloomberg going back to at least 2006. They’re paying up, too, with takeover premiums that are about double the global average, the data show. The trend is set to continue.

After years of building up cash to a record ¥233 trillion ($2 trillion) as of the end of September, Japanese companies are looking to convert those stockpiles into future growth by investing overseas where the outlook is brighter. While the yen’s 14-percent drop against the dollar in the past year has made foreign acquisitions more expensive, economists project the Japanese currency will weaken further amid Prime Minister Shinzo Abe’s campaign to fight deflation. That gives companies the incentive to spend now.

Japan Tobacco Inc., Asia’s biggest listed cigarette maker, has declared a “year of investments” See “Japan firms,” A2

PESO exchange rates n US 44.3140

Purisima said 80 percent of all the provinces and cities in the Philippines continued to use an outdated basis for assessing the values of real properties in their jurisdictions as of the end of 2014.

By David Cagahastian

related to the project and for prospective bidders to identify and engage participants in the bidding process.”

The basic technical and financial qualification requirements for the project have been “consistent” since the department issued the instruction to bidders in August 2014.

A two-stage bidding system will be implemented for the auction, meaning bidders must first prequalify on minimum legal, technical and financial requirements set by the implementing agency. Only prequalified bidders will be permitted to submit their technical and financial offers for the contract.

The thoroughfare-cum-dike project will help mitigate flooding along the western coast of the Laguna Lake running from Taguig to the town of Bay in Laguna. It will also serve as an alternative transport route to the congested South Luzon Expressway and enhance the hydrology for the ecosystem of Laguna Lake.

A total of 24 parties expressed their interest in the multibillion-peso contract. They are Muhibbah Engineering (Phil.) Corp., GT Capital Holdings See “Laguna Lakeshore,” A2

See “LGUs,” A2

PILLAR OF MIXED-USE DEVELOPMENTs Megaworld Founder Dr. Andrew L. Tan (center) receives the Philippine Retailers Association’s (PRA) President’s Award from (from left) PRA Vice Chairman Jorge Mendiola, PRA Vice Chairman and President’s Award Proponent Mars C. Chua, Trade Secretary Gregory L. Domingo, PRA President Lorenzo C. Formoso, PRA Chairman Frederick D. Go and PRA Chairman Emeritus Samie Lim. Tan earned the title “Pillar of Mixed-Use Developments” and joined the elite list of personalities who received the President’s Award for their invaluable contributions that propelled the growth of the Philippine retailing industry. NONOY LACZA

₧122.8-B Laguna Lakeshore deal loses one major bidder T

ECHNICAL and financial issues have discouraged at least one party from joining the initial stage of the auction for the P122.8-billion Laguna Lakeshore Expressway Dike deal.

Metro Pacific Tollways Corp.

President Ramoncito S. Fernandez expressed his group’s sudden disinterest in the project, after his camp saw various risks in pursuing the infrastructure project.

“We are inclined not to participate as we see various technical and financial risks, which are premature to disclose,” he said in a text message over the weekend.

For his part, MTD Philippines Inc. President Isaac S. David said his firm, along with its partners, are ready to place their bids.

“Our team, composed of the Villa Group for the real-estate component and Hanshin of Korea for the reclamation and flood control, will bid,” he said. “Challenges, among others, include the protest by groups opposed to the project.”

“There is a tendency for the newcomers to underestimate the scope of work involved,” he added.

FERNANDEZ: “We are inclined not to participate as we see various technical and financial risks, which are premature to disclose.”

Parties that are prominent in the public-private partnership (PPP) arena were also sought for their position, but declined to comment.

Prequalification activities will be held on Friday, a bid bulletin issued by the Department of Public Works and Highways (DPWH) showed.

“No further extension will be given to the submission of qualification documents, so as not to adversely affect the schedule of the bidding process,” the document showed.

Initially, the deadline for the submission of prequalification documents was scheduled on January 14.

It was pushed back to February 27 to give ample time to the department to “release additional information

U

p to P12 billion in local taxes are lost annually due to the failure of local government units (LGUs) to update market values of real estate in their jurisdictions and to collect the appropriate realproperty taxes, Finance Secretary Cesar V. Purisima said.

Purisima said 80 percent of all the provinces and cities in the Philippines continued to use an outdated basis for assessing the values of real properties in their jurisdictions as of the end of 2014.

Add to this the low collection efficiency of local governments, “so dismal that the 10-year national average is only 57 percent and has never gone beyond 70 percent” of the total collectibles of LGUs. “If only LGUs could only update their schedules of market values [SMVs] property and optimize collections, improve the tax records and database, enforce collections legally, the estimated annual incremental revenue is P10.8 billion to P12.03 billion,” Purisima said at the launch of the LGU Public Financial Management Reform Roadmap on Tuesday.

Under the Local Government Code of 1991, LGUs must revise their SMVs and conduct a general revision of property assessments and classification once every three years.

However, only 27 cities out of a total of 143 cities throughout the country have complied with this requirement in the past three years.

Purisima said real-property taxes should necessarily become higher since figures indicate that the realestate sector has been on the uptrend in the past two years.

“In recent years, there has been an uptrend in the real estate and construction industry, which, according

n japan 0.3728 n UK 68.5006 n HK 5.7132 n CHINA 7.0845 n singapore 32.6631 n australia 34.6041 n EU 50.2742 n SAUDI arabia 11.8152 Source: BSP (25 February 2015)

News

BusinessMirror

Thursday, February 26, 2015

A2

news@businessmirror.com.ph

SM ready to end feud with Ayala Transit (MRT) Lines 3 and 7, has been in limbo since the Department of Transportation and Communications (DOTC) reviewed the project’s technical and financial components years back.

This led to the change of the station’s location, which was initially set to be near SM North Edsa, earning the ire of the group of the country’s largest mall operator, which paid an initial P200 million for the naming rights of the station.

Transportation officials have repeatedly said building the station near TriNoma is both economically and environmentally viable, as this would result in a lower cost and less urban blight.

Continued from A1

Sy-Coson, the eldest child of the country’s top billionaire, said the key to the compromise is for her mall, SM North Edsa, to have its own common station, not minding if Ayala Land’s TriNoma Mall gets its own.

“As long as we have our own station, then we are okay with it,” she said in a brief interview.

It has been several years now since the P1.4-billion facility has been planned, but the location of the transportation infrastructure has yet to be agreed upon.

The common alignment, which aims to link the Light Rail Transit (LRT) Line 1 to the Metro Rail

Japan firms. . .

SM Prime then brought its battle to the Supreme Court, which issued a stay order against the DOTC and the Light Rail Transit Authority (LRTA) in 2014, enjoining them to stop the transfer of the common alignment’s location.

Finally deciding on the station’s location would allow Universal LRT Corp. (ULC), a unit of San Miguel Corp., to move on with the future MRT 7.

Currently, the most-diversified conglomerate in the Philippines is negotiating with contractors and suppliers for the construction requirements of the MRT 7.

The rail component of the MRT 7 project involves the construction of

Continued from A1

while machinery maker Mitsubishi Heavy Industries Ltd. and brewer Kirin Holdings Co. are also considering growth through takeovers abroad.

“Japan Inc.’s sense of urgency in making acquisitions abroad is strengthening,” said Makoto Shiono, managing director of Tokyo-based consultancy Industrial Growth Platform Inc. “Japan’s massive monetary easing slashed the value of cash. So if you have tons of cash, investors will be pressing you to invest in companies to generate cash flow for future growth.”

Hefty premiums

Companies in Japan have agreed to pay an average 39-percent premium for overseas takeovers and majority-interest purchases announced since January 1, compared with the global average of less than 20 percent during the period, data compiled by Bloomberg show. The Japanese purchases valued their targets at a median 23 times earnings before interest, taxes, deprecia-

tion and amortization, compared to the global median Ebitda multiple of 9.4. The takeover activity has been broad in nature, spanning a number of industries. This week alone, Hitachi Ltd. agreed to buy Rome-based Finmeccanica SpA’s stake in Ansaldo STS SpA, in a deal valuing the maker of driverless metro trains at €1.93 billion ($2.2 billion). Japanese chemical producer Asahi Kasei Corp. said it will buy Charlotte, North Carolina-based Polypore International Inc. to expand its battery business.

Hitachi fell as much as 3.3 percent in Tokyo on Wednesday, the first day of trading after the Ansaldo acquisition was announced. The shares were down 0.9 percent at ¥820.5 as of 1:56 p.m.

‘Radical moves’

Earlier this month, Japan Post offered A$6.5 billion ($5.1 billion) for Melbourne-based transport firm Toll Holdings Ltd. in the biggest Australian acquisition by a Japanese company.

Bloomberg News

a 22.8-kilometer rail-transit system that is envisioned to operate 108 rail cars in a three-car train configuration with a daily passenger capacity ranging from 448,000 to 850,000.

It will have 14 stations, starting with the North Avenue Station in Edsa passing through Commonwealth Avenue, Regalado Avenue and Quirino Highway up to the proposed Intermodal Transport Terminal in San Jose del Monte, Bulacan.

The road component of the project, meanwhile, involves the construction of a six-lane access road from San Jose del Monte to Balagtas, Bulacan, North Luzon Expressway Exit.

It is seen to be completed by 2018.

LGUs. . .

Continued from A1

to the Philippine Statistics Authority, was triggered by the expansion in renting and business activities by 14.1 percent in 2014 from 12.0 percent in 2013; the increase in ownership of dwellings by 2.4 percent compared to 0.6-percent growth in 2013; and the 1.6-percent year-on-year increase in the number construction projects during the third quarter of 2014, with a value of P140.7 billion,” he said.

Under the Local Government Code of 1991, real-property taxes can be levied not only on lands and buildings, but also on machineries and equipment. Taxes of up to 5 percent of the assessed value of the property may also be levied against idle lands.

Purisima also noted that higher SMVs could also translate to more funds for the LGUs education program for its constituents since the law allows for an additional 1-percent annual tax on the assessed value of real properties, which will accrue to the Special Education Fund of an LGU. For these purposes, Purisima said the Department of Finance will push for the “Valuation Reform Bill” in Congress which will improve the valuation system in the country so that real-property taxes may contribute to local and national revenues.

3-DAY EXTENDED FORECAST FEBRUARY 26, 2015 | THURSDAY

TODAY’S WEATHER

TROUGH OF LOW PRESSURE AREA (LPA) AFFECTING EASTERN MINDANAO. RIDGE OF HIGH PRESSURE AREA (LPA) AFFECTING NORTHERN LUZON. (AS OF FEBRUARY 25, 5:00 PM)

Trough of Low Pressure Area is an elongated region of LPA. It can bring in cloudy conditions and precipitation or cold air mass.

23 – 32°C

23 – 32°C

TUGUEGARAO

22 – 32°C

22 – 31°C

SBMA/CLARK 22 – 31°C METRO MANILA 22 – 32°C

TAGAYTAY CITY 20 – 29°C

23 – 31°C

22 – 31°C

PDP. . .

24 – 31°C

24 – 32°C

24 – 32°C

22 – 31°C

TACLOBAN

24 – 30°C

24 – 31°C

23 – 30°C

22 – 32°C

CAGAYAN DE ORO

22 – 31°C

23 – 31°C

23 – 31°C

24 – 32°C

23 – 31°C

23 – 32°C

24 – 32°C

24 – 32°C

24 – 33°C

14 – 24°C

15 – 24°C

SBMA/ CLARK

23 – 31°C

23 – 32°C

23 – 32°C

ZAMBOANGA

20 – 30°C

PHILIPPINE AREA OF RESPONSIBILITY (PAR)

LEGAZPI

PUERTO PRINCESA CITY 24 – 30°C

METRO CEBU 24 – 30°C

TACLOBAN CITY 24 – 31°C

CAGAYAN DE ORO CITY 22 – 30°C

ZAMBOANGA CITY 24 – 31°C

PUERTO PRINCESA

ILOILO/ BACOLOD

24 – 31°C

24 – 32°C

SUNRISE

SUNSET

MOONSET

MOONRISE

6:15 AM

6:03 PM

12:14 AM

12:02 PM

21 – 30°C

24 – 32°C

NEW MOON HALF MOON

FEB 19

24 – 32°C

24 – 32°C

FEB 26

1:14 AM

Partly cloudy to at times cloudy with rainshowers

23 – 31°C

23 – 32°C

24 – 32°C

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

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

www.panahon.tv

SABAH CELEBES SEA

7:03 AM

0.29 METER

Partly cloudy to at times cloudy with rain showers and/or thunderstorms

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

METRO DAVAO 24 – 31°C

LOW TIDEMANILA HIGH TIDE SOUTH HARBOR

7:47 AM

24 – 31°C

MARCH 1 SUNDAY

FEB 28 SATURDAY

23 – 31°C

14 – 23°C

20 – 30°C

Cai U. Ordinario

FEB 27 3-DAY FRIDAY EXTENDED FORECAST

BAGUIO

TAGAYTAY

Lake basin are also being developed by the Department of Environment and Natural Resources (DENR) and the Laguna Lake Development Authority.

Phil-WAVES will use the 2012 System of SEEA, an internationally accepted framework for the accounting of natural resources, to measure minerals and mangroves.

The Philippine Statistics Authority will use this information to develop macroeconomic indicators that will assess the value of these key natural resources and their contribution to the country’s gross domestic product.

METRO CEBU

LEGAZPI CITY 24 – 30°C

ILOILO/ BACOLOD 23 – 30°C

Continued from A8

highlighted after Supertyphoon Yolanda (international code name Haiyan).

The World Bank-supported project will focus on capacity building and generating data and indicators for key natural resources to support the Philippine government in institutionalizing the use of the selected System of Environmental and Economic Accounting (SEEA) modules.

The grant will also support the policy analysis of the data and indicators produced by the minerals and mangroves accounts. In addition, two ecosystem accounts for Southern Palawan and the Laguna

MARCH 1 SUNDAY

Continued from A1

expressway-dike by April next year.

The thoroughfare should be commercially operational by 2022.

The project involves the construction of a 47-kilometer flood-control dike—on top of which will be a sixlane expressway—on an offshore alignment 500 meters away from the western shoreline of Laguna Lake.

It includes interchanges, bridges, floodgates and pumps, from Taguig to Los Baños in Laguna.

It also involves the reclamation of 700 hectares of raw land adjoining the expressway-dike.

The public works department has so far awarded two key infrastructure projects, namely: P1.96-billion Daang Hari-South Luzon Expressway project bagged by Ayala Corp. in 2011; and the P15.68-billion Ninoy Aquino International Airport expressway, given to San Miguel Corp. unit Vertex Tollways Development Inc. in 2013. Lorenz S. Marasigan

Inc., Ayala Land Inc., Egis Projects S.A. Tam-Yap and Law Offices, Megaworld Corp., Metro Pacific Tollways Corp., Minerales Industrias Corp., Leighton Contractors (Philippines) Inc., JV Power and Wealth Corp., LT Group Inc., Laguna Lakeshore Consortium, Filinvest Land Inc., Macquarie Capital Securities (Phil.)

Inc., San Miguel Corp., Megawide Construction Corp., Aboitiz Equity Ventures Inc., JG Summit Holdings Inc., PT Star Line, State Properties Corp., MTD-Hanshin-VistaLand Consortium, IL & FS Transportation Networks Ltd., Vinci Concessions, Mega Express Road and Development, and Charbet Jara Rainbow Holdings Inc. Consortium.

The deadline for the submission of bids is scheduled on July 6 next year, a notice of award is targeted to be issued a month after.

The winning bidder will start designing and constructing the

METRO DAVAO

TUGUEGARAO CITY 22 – 32°C

BAGUIO CITY 14 – 24°C

FEB 28 SATURDAY

METRO MANILA

LAOAG

LAOAG CITY 23 – 30°C

FEB 27 FRIDAY

Laguna Lakeshore. . .

@PanahonTV

3:47 PM

0.85 METER

Partly cloudy skies

news@businessmirror.com.ph

The Nation BusinessMirror

Aquino at Edsa rites: More violence will harm economy

By Butch Fernandez

P

RESIDENT Aquino warned on Wednesday that a slide to more violence and conflict will harm the economy if the current peace process with Moro rebels is derailed by last month’s Mamasapano massacre of 44 National Police Special Action Force (SAF) commandos in Mindanao.

Speaking at Wednesday’s rites marking the 1986 People Power Revolt, Mr. Aquino voiced concerns that if the process were disrupted now and the passage of the Bangsamoro basic law (BBL) were halted, there is little chance that a similar window for peace can open soon.

He stressed in a speech, during the 29th anniversary rites of the Edsa revolt that ended the Marcos dictatorship, that his government is trying to ensure order and stability, but added that as these goals become more realizable, those who wish to “sabotage” the peace process could become more desperate.

The President lamented how the January 25 Mamasapano massacre of 44 police commandos by Moro rebels, as they were deployed to arrest two terrorists, is now being used to derail the peace process with the Moro Islamic LIberation Front (MILF) with calls to resume all-out war and to hold passage of the BBL granting expanded autonomy to Muslim communities in Mindanao.

“How can they be sure another chance such as this will come again?”

Mr. Aquino asked in Filipino, recalling the difficult, complicated path taken by his administration since 2010 to forge lasting peace with the MILF. He said those seeking all-out war do not want peace because they benefit from violence and chaos, and they wan to push their vested agenda.

The government’s surrender of its pursuit of a BBL is like “leaving behind a legacy of guns and violence to next generations,” he said.

“Only true, lasting peace will make worthwhile the sacrifices” at Edsa and of the policemen who offered their lives at Mamasapano just to ensure lasting peace, the President said.

Mr. Aquino, whose mother Corazon was catapulted to the presidency in 1986, said Edsa taught Filipinos reason against violence, even in the formidable task to ensure regime change.

Those who learned from Edsa should be more persevering in fighting for change without sacrificing peace, he said.

It did not seem just, he said, to misuse the sacrifices for peace offered by the SAF 44 in order to justify violence.

The President delivered his speech after Luis Antonio Cardinal Tagle, archbishop of Manila, celebrated Mass at the Edsa Shrine.

The rites were attended by officials, including Vice President Jejomar Binay, who played key roles in the anti-dictatorship movement and in the final crucial days before and during the Edsa revolt.

Editor: Dionisio L. Pelayo • Thursday, February 26, 2015 A3

Poll watchdog seeks deportation of Venezuelan Smartmatic head

A

By Joel R. San Juan

N election watchdog on Wednesday filed a complaint for summary deportation and blacklisting of the Smartmatic AsiaPacific president, Venezuelan Cesar Flores, for his alleged “questionable conduct and demeanor that violates certain laws of the country.”

In its complaint, the Citizens for Clean and Credible Elections (C3E), through its lawyer Michael Dauz, claimed that Flores has become an undesirable alien and should be disqualified from staying in the country for issuing statements that threatens national security, public safety and public morals.

The group is referring to Flores’s statements to the media branding Smartmatic’s critics as a “vote-cheating syndicate whose main goal is to return manual elections to serve their vested interests.”

Dauz added that Flores also insinuated that groups calling for Smartmatic’s disqualification in the bidding process for the 2016 elections are work-

Detained senator files bill banning drivers from using phones, gadgets while driving

ing for its competitors who are out to destroy the democratic system in the country.

“By calli ng comflores pla inants as working for Smartmatic’s competitors and destroying the democratic system of the government and Comelec [Commission on Elections], Cesar Flores disgraces the legitimate exercise of complainants’ right to form association or to seek redress of their griev-

ances,” the complaint said.

C3E noted that it has employed only legal means to redress its grievances, by invoking the rule of law and going to the proper forum.

It added that Flores could be held liable for issuing libelous statements under Article 353 of the Revised Penal Code.

Flores, according to the group, also violated Article 19 the New Civil Code, which states: “Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.”

“Its about time someone called him out for his shameless actions” C3E co-convener Leon Peralta said.

Peralta, founding chairman of the Anti-Trapo Movement, added that the Venezuelan-born Flores has become an undesirable alien, and has overstayed his welcome in the country.

“We have repeatedly stated for the record that C3E is not against the automated election system. Automation is part of the law, and is the logical direction toward progess.

What we are saying, however, is that it should be implemented properly, and with no room for doubt,” said Nicanor Elman, another co-convener of C3E and president of the League of Elderly and Aging Persons.

Dauz insisted that Flores’s claims

against the group were unfounded.

On the contrary, Dauz pointed out that C3E is only looking out for the best interests of the country by pushing for transparency, and is earnest in its desire to urge the Comelec to perform its constitutional mandate, and observe the rule of law.

The group also assailed Flores for trying to “blackmail” the government from awarding the election contracts to another group, because the same is allegedly their own exclusive technology and sole expertise.

Such action of Flores, according to the group, is tantamount to undue interference to the lawful exercise of the appropriate bodies’ functions or discretion like the Comelec and even the Supreme Court.

Earlier, C3E commended Comelec Acting Chairman Christian Robert Lim for announcing the early source code review for the 2016 elections.

“The entry or stay of aliens in the Philippines is merely a privilege and a matter of grace; such privilege is not absolute nor permanent, and may be revoked. Aliens, like Cesar Flores, may be expelled or deported from the Philippines on grounds and in the manner provided for by the Constitution, the Immigration Act of 1940, as amended, and administrative issuances pursuant thereto,” the complaint said.

Sonny Angara keynote speaker at Eternal Plans awards night SEN. Juan Edgardo “Sonny” M. Angara is expected to discuss issues and concerns affecting the preneed indusangara try as keynote speaker and guest of honor of leading preneed company Eternal Plans Inc. on March 3 at the Citystate Tower Hotel on Mabini Street, Ermita, Manila.

As it honors its top sales producers for 2014, Eternal Plans also celebrates its 34th foundation anniversary. The company, which offers life, pension and education plans, was established by Ambassador

Antonio L. Cabangon Chua, chairman emeritus, in 1981 initially to complement the services offered by sister-company Eternal Gardens with its memorial life plan product.

The event has the theme “Committed,” expressing the company’s determination to live up to its promise to plan holders to secure their future. It will be attended by top management, officers and staff, and sales agents and executives from the branches nationwide of Eternal Plans.

Angara’s father, former Sen. Edgardo J. Angara, is acknowledged as a great champion of the preneed industry for having authored and vigorously pushed for the enactment of the Pre-need Code of the Philippines, or Republic Act 9829.

The code, signed into law by former President Gloria Macapagal-Arroyo in December 2009, seeks to protect plan holders and ensure the viability of the industry.

Elmer Lorica, president and COO of Eternal Plans, said Angara shared his father’s concern for the preneed industry and “would have valuable ideas, insights and thoughts to share with us and inspire our people, especially our sales force members, to work with more vigor and enthusiasm.”

Eternal Plans is a member of the Eternal Group of Companies, also founded by Cabangon Chua, which includes Eternal Gardens Memorial Park and Eternal Crematory & Chapels Corp.

Comelec disqualifies 2 bidders for P2.5-B election automation project

T

S

EN. Ramon Revilla Jr. has filed a bill prohibiting drivers from using electronic equipment, particularly mobile communications devices, while driving any engine-, animal- or humanpowered vehicles.

In filing Senate Bill 2663, or the “Anti-Mobile and Gadget Use While Driving Act,” Revilla, who is detained on graft charges at the National Police General Headquarters in Camp Crame, Quezon City, explained that his proposal was in line with the increasing number of accidents involving drivers who use their mobile phones and even their gadgets while driving.

“Using mobile phones and gadgets impairs the concentration and focus of drivers while driving. This jeopardizes the safety not only of the driver and his passengers, but also other travelers on the road,”

Revilla said.

“Mobile cellular-telephone use has increased persistently. It has become an inevitable part of people’s daily lives. However, various reports show that mobile-phone use has become a problem on the road,” he added.

Under the bill, Revilla said it is unlawful for drivers operating telephones or electronic entertainment and computing device with one or both hands while their vehicles are in motion.

The bill, however, will not cover the drivers using gadgets with speaker phones, earphones and microphones or other similar devices, “which allow a person to make and receive calls without having to hold the mobile communications device, provided, that the placement of the mobile communications device or the hands-

free set does not interfere with the line of sight of the driver.”

Revilla said the bill will also cover wheeled agricultural machinery such as tractors, as well as construction equipment and other forms of transportation conveyances, such as bicycles, pedicabs, habal-habal, trolleys, kuliglig, wagons, carriages, carts, sledges and other such vehicles being driven in public thoroughfares, highways or streets.

“The provisions of this act shall not apply to motorists of motor vehicles which are not in motion or are pulled over to the side of the road, except those which are stopped momentarily at a red light or in compliance with a traffic regulation,” the bill said.

Violators shall be penalized with a fine ranging from P5,000 to P20,000, and a revocation of driver’s license for fourth offense, the bill added. PNA

HE Commission on Elections (Comelec) bids and awards committee (BAC) on Wednesday announced the disqualification of Smartmatic-Total Information Management (TIM) Corp. and its rival, Indra Sistemas S.A., in the bidding for the P2.5-billion contract for the lease of Election Management System (EMS) and Precinct-Based Optical Mark Reader (OMR) which include the acquisition of additional 23,000 voting machines.

Following the opening of the second stage of public bidding for the OMR, the Comelec-BAC announced that the bid proposal of the two bidders have been found “nonresponsive.”

“In summary, the BAC has declared or has disqualfied both bidders for having submitted nonresponsive financial proposals,” ComelecBAC Chairman Helen Flores said.

In the case of Smartmatic-TIM, Flores said it failed to completely fill-out the items required by the Comelec in its Terms of Reference.

Flores said Smartmatic left blank the items on “Other Requirements,” “Risk Management and Contingency Planning,” “Change Management,” and “Quality Control and Quality Assurance.”

“In this regard, where a required item is provided but no price is indicated, the same shall be considered as nonresponsive. But specifiying a ‘zero’ in the said item would mean that it is being offered for free to the government,” Flores said.

Smartmatic also failed to bag the

contract for the purchase of Direct Recording Electronic (DRE) machines because of the same grounds despite offering an amount of P27,121,494.40 for the contract which is less thant the approved budget of P31,272,000 plus an additional P1,337,624.96 for the option to purchase.

Smartmatic was the lone bidder for the DRE contract.

On the other hand, Indra was disqualified after it exceeded the approved budget for the project, which is P2,503,518,000.

In its financial proposal for the OMR project, Indra pegged the OMR lease contract at P2,503,518,000, which is exactly the amount of the approved budget.

However, Indra did not include the “Option to Purchase” amount in its total bid proposal, that is P1,182,977,632.96.

“Based on the excessive financial proposal of Indra and for being nonresponsive because it exceeds the maximum cost, which is in the amount of P2.5 billion,” Flores said.

On the other hand, Smartmatic-TIM proposed an amount of P1,724,712,698.24 for the lease of the OMR machines, and another P505,086,506.40 for the “Option to Purchase.”

In an interview, Smartmatic-TIM President for Asia-Pacific Cesar Flores said the company will appeal the decision of the Comelec-BAC because it should not be faulted for following the format issued by the poll body.

“They are claiming there is issue on

the summary of the price. But what we are telling the Comelec is that we are actually using their format, the Excel format that was provided by Comelec itself. So, if there is anything wrong with the format that they provided, that should not be blamed to us,” Flores said.

Flores said it would be unfortunate for the Comelec to disqualify Smartmatic-TIM based on a “simple confusion” since it is offering its services at a price 10 percent lower than the approved budget.

Meanwhile, Indra lawyer Archivald de Mata said the company will also file a motion for reconsideration since it disagrees with the interpretation on how the total bid amount should be computed.

“What is clear to us is the lowest calculated bid shoud be based on the cost of the total bid proposal for lease offer only.

So iyon ang pagkaintindi namin. Hindi klaro sa notice and we cannot find anywhere na doon pala sa approved budget ay included na ang ‘Option to Purchase’. So iyon ang hindi malinaw sa amin,” de Mata said.

However, de Mata admitted that the company did not make an attempt to clarify with the Comelec as to how the said requirement should be interpreted.

With the disqualification of Smartmatic and Indra, Comelec Spokesman James Jimenez said the BAC is expected to issue a recommendation to the commission en banc for the declaration of a failed bidding.” Joel R. San Juan

Economy

A4 Thursday, February 26, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

Filipino traders urged to seek opportunities in Busan, Korea

BusinessMirror

Closure of P2.5-billion ITS Southwest Terminal deal canceled at 11th hour

T

By Lorenz S. Marasigan

he signing for the deal to construct a multibillion-peso intermodal terminal southwest of Metro Manila was canceled at the last minute at the request of the private-sector partner.

AN

A

South Korean businessman urged his Filipino counterparts to be more proactive in checking out trade and investment opportunities in Busan in light of the recent growth of tourism exchange between the two countries.

Dr. Sangwook An said there are synergies and complementarities between Manila and Busan that Filipino businessmen can exploit in seeking prospective South Korean partners.

“We can have partnerships in several industries, including services and trade. Busan and Manila are the largest port cities in South Korea and the Philippines, respectively, so there is already plenty of opportunities in the shipment of goods between the two countries alone,” An said.

An, who also studied in the Philippines aside from establishing businesses here, offered to help organize trade and investment road shows for the Philippine government and business sector in Busan.

For about a decade now, An has been using his own resources to accomodate Filipino tourists, expatriates and workers in Busan. He recently provided accommodation to a group of Filipino choir members attending the 2006 Busan Choral Festival and Competition from the University of the East Chorale with Conductor Anna Tabita AbeladoPiquero, Manager Darwin B. Vargas, and first vocalist Jane 0.

Sanbuenaventura.

He supported and financed the program called “Kapwa ko,” a Filipino community organization and provided job opportunities for undocumented workers and Filipino spouses married to South Korean nationals.

He also helped 16 Filipino workers in a South Korean factory who were suffering from maltreatment. He provided them with food, shelter and transportation for a month; and worked with the South Korean immigration office to help them obtain a new visa status so they can find new jobs.

news@businessmirror.com.ph

The signing of the concession agreement for the P2.5-billion Integrated Transport System Southwest Terminal, initially scheduled on Wednesday, was postponed to a latter date as requested by the Megawide Construction Corp.-led consortium.

“MWM Terminals requested for the postponement. We don’t know yet the exact reason,” Transportation Spokesman Michael Arthur

C. Sagcal replied, when sought for comment. “We will announce the new date once it is set.”

Officials of the consortium led

by Megawide, a mainstay in the public-private partnership (PPP) arena, and Walter Mart Property Management Inc. of billionaire and retail magnate Henry Sy were sought for more details, but none were replying to the BusinessMir-

ror’s queries as of this writing.

MWM Terminals, whose bid carried a request for P100-million annual subsidy all throughout the 35year concession period, won the deal on January 23.

The group’s bid was declared superior over its only competitor’s offer, the Filinvest Land Inc. who sought for a higher P650-million annual subsidy.

So far, the contract is the first PPP contract that the government has awarded this year.

The multibillion-peso transportterminal contract provides for the construction of an intermodal terminal near the Manila-Cavite Toll Expressway to connect passengers coming from Cavite to urban- transport systems in Metro Manila.

It will include a passenger terminal building, arrival and departure bays, public information systems, ticketing and baggage handling

facilities and park-ride facilities.

The government has awarded eight contracts since the infrastructure program’s inception in 2010.

It aims to sign at least 15 contracts by the time President Aquino steps down from office in 2016.

Megawide has cemented its image as a mainstay in the government’s f lagship infrastructure program, bagging a number of PPP projects, including, the P16.42-billion PPP for School Infrastructure Project Phase 1; two of the five contracts under the P8.8-billion PSIP Phase 2; and the P5.7-billion deal for the construction, operation and maintenance of the Philippine Orthopedic Center.

The state intends to plug the gap in the country’s transportation infrastructure in the next decade by rolling out massive infrastructure projects that are seen to spur economic growth.

Davao to host largest fruit market in Asia

By Ma. Stella F. Arnaldo Special to the BusinessMirror

T

HE Department of Tourism (DOT) will be developing the “ largest fruit market in Asia,” which will be in Davao City.

This was revealed by Tourism Secretary Ramon R. Jimenez Jr., during a discussion with editors and reporters of the ALC Media Group on Tuesday.

“Everytime you ask where this certain fruit comes from, the answer is always Davao. And when you go to Davao and ask where is the fruit market, it’s in the regular market. So we finally decided, we should have Davao host the largest fruit market in Asia,” he said, intimating that this will surely attract local and foreign tourists alike.

The Davao region—which includes Compostela Valley, Davao del Norte, Davao del Sur, Davao Oriental and Davao Occidental— produces papaya, mangosteen, pomelo, durian, mango, pineapple, banana, etc.

Tourism Assistant Secretary for Mindanao Arturo Boncato Jr. told the BusinessMirror that the Asian Fruit Market is scheduled to be opened by the second quarter “to jump-start the project in time for Visit the Philippines Year 2015.” It will be located in a 2,000-square-meter prime outdoor space, “provided for free for two years” by the Abreeza Mall, owned by Ayala Land Inc. “The secretary’s vision is for Davao to be a destination hosting the largest fruit market in Asia that will house fresh fruits, proc-

essed-fruit products, fruit-based products and food and beverage services, given Davao’s rich agricultural resources and proximity to equally productive provinces,” he explained.

The Tourism Infrastructure and Enterprise Zone Authority, an attached agency of the DOT, “will bankroll the design and construction of temporary structures that are aesthetically complementary with the host environment,” for Phase 1 of the Asian Fruit Market, he added. The project is estimated to cost P30 million, but Boncato stressed that a large chunk of the amount is accounted for by value of the mall space.

He said a more permanent space is being eyed for the Asian Fruit Market, with the DOT already looking for available public land for this purpose.

Data from DOT-Davao showed a 26-percent increase in visitor arrivals in the region to 2.3 million in 2014, with foreign visitors comprising 132,518, up some 20 percent from 2013.

Davao is expected to benefit from a new air-services agreement (ASA) between the Philippines and Singapore which grants Singapore carriers’ additional co-terminal and stopover rights in the city, and in Manila, Cebu, Puerto Princesa, Kalibo, Cagayan de Oro, Laoag, Legazpi, Puerto Princesa, and Zamboanga. This includes two new provinces—Iloilo and Bacolod. This means Singapore carriers can travel to and from Singapore to and from two local cities in just one flight (e.g., Singapore-Manila-Davao).

The new ASA increases weekly

Guitarman A music store attendant in Manila creates an attractive display of colorful

handcrafted guitars to attract shoppers. Filipino craftsmen—from Pampanga to Cebu —are known for their exceptional skills in making the popular stringed musical instrument. Stephanie Tumampos

seat entitlements to 18,888 (105 frequencies per week) from 17,267.

The DOT, in a media statement, said this new agreement strengthens its strategy in positioning the Philippines as a multiple gateway destination in Asia.

With increased flights, tourists and investors can expect to travel to and from the two countries with ease. The Philippines gains greater entry to a major hub such as the Changi International Airport, while Singapore residents and citizens can look forward to wider access to top tourism destinations in the Philippines. This agreement is integral to the twin marketing destination strategy of the Philippines and Singapore.

(See “PHL, Singapore in joint tourism drive,” in the BusinessMirror, February 25, 2015.)

In 2014 a total of 179,099 Singaporeans visited the Philippines, up 3.7 percent from 2013, making it the top source market of tourists from Southeast Asia region. With the expanded ASA between the Philippines and Singapore, the country expects to enjoy an increase in tourism arrivals not only from Singapore, but also from other parts of the globe.

“The travel business in Southeast Asia today is characterized by a phenomenon called ‘coopetition’—a cooperative, collaborative decision by all players to compete with each other so that the world will choose the region before choosing the country. As the Asean [Association of Southeast Asian Nations] invites the world to feel the warmth, this phenomenon finds one of its most exciting permutations in the travel exchange between the Philippines and Singapore. Our countries are, in very real terms, each other’s value extension,” Jimenez said.

The new ASA also expands the fifth freedom rights of Philippine and Singapore carriers to 10 weekly services from the previous eight, allowing a Singapore carrier to operate a route from Singapore to Manila then to Osaka or Seoul, while Philippine carriers can fly passengers from Manila to Singapore, onward to any point in India.

The parties also agreed to grant thirdcountr y code-sharing to both Philippine and Singapore carriers, which will allow the existing air rights of both parties to be reallocated to a third-country airline. This gives the Philippines added exposure and access opportunity to points not currently served by both local and foreign carriers with existing rights. The operation by a third-country carrier under this agreement will greatly help the DOT in promoting the Philippines to the points of origin of such cooperative operational arrangement.

“The more connected we become, the more value we add to each other’s offering. As we work toward our goal of achieving our visitor arrival, revenue, and employment targets, we need to greatly enhance our international air seats and connectivity,” the tourism chief stressed.

briefs pal sells two a320 jets to allegiant travel

Flag carrier Philippine Airlines (PAL) has signed an agreement to sell two used Airbus A320 twin-engine jets to Las Vegas-based low-cost airline Allegiant Air. The two aircraft are set to enter the Allegiant operating fleet toward the end of 2015, Allegiant Travel Co., parent of Allegiant Air, said in a news statement released on Wednesday.

Allegiant Air earlier said that it had also acquired six used Airbus A319 jets from the country’s leading lowcost carrier, Cebu Pacific.

The airline said it planned to have them in service by the end of 2017.

Cebu Pacific, meanwhile, said that it would be adding A321 neo aircraft to its fleet very soon.

The A321neo is the largest model in the A320 neo series, which incorporates new engines and large wing tip devices called sharklets.

The airline did not announce terms of both acquisitions. PNA

phivolcs to strengthen earthquake early warning system

The Philippine Institute of Volcanology and Seismology (Phivolcs) has installed about 100 earthquake-intensity meters to strengthen the earthquake early warning system in the country.

According to Phivolcs Director Renato Solidum Jr., the system would locate where the earthquake is and warn the areas that will receive the second wave, but the earthquake early warning may not be applied to all areas.

“The earthquake early warning would need that particular community or facility to have a certain distance from the epicenter so that there is sufficient time,” Solidum said during the Preparatory Meeting for Reslience Conference on Earthquake sponsored by the Romulo Foundation for Peance and Development held in Makati City.

At present, the Phivolcs chief said the agency is planning to add 200 more earthquake-intensity meters with a vision of reaching a total of 300 nationwide by the end of 2016 or 2017.

Solidum explained that the earthquake-intensity monitoring system would let the agency know the intensity of the earthquake immediately after it strikes.

The minimum requirement for damage to happen is intensity 6.

Solidum added that the intensity meters will be used for early response and the data garnered will be used for possible early warnings for certain areas.

“Right now, we have 75 earthquake- monitoring stations in the Philippines. By next year, the 30 remaining will be via satellite.

So all will be via satellite and this is preparing for the possible evolution of an earthquake early warning,” he said. PNA

mrt 3 rail-replacement project set this weekend THE management of the Metro Rail Transit (MRT) Line 3 has scheduled the replacement of iron rails of the light railway facility this weekend, a transport official said on Wednesday.

MRT General Manager Ramon Buenafe, during a House Committee on Transportation hearing, said that some 150 meters of rail between the Taft and Magallanes stations will be replaced on Saturday and Sunday.

“This is the first rail-replacement project of the MRT 3. It’s not been done before. Rail repairs had been done before but not to this extent,” he said.

He said that MRT would close early on Saturday at 9 p.m., instead of 10 p.m., and start late at 12 noon on Sunday.

The MRT's regular schedule is from 4:30 a.m. to 11 p.m. Jovee Marie N. dela Cruz

Opinion BusinessMirror

A6 Thursday, February 26, 2015

editorial

Blackout

I

T’S inevitable. The country will be plunged into darkness come the summer season. First victim: Davao City with two-hour rotating brownouts starting middle of February. Many fear the whole country will be next.

This crisis comes with alternating increases in electricity rates as summer looms. As of this writing, the Philippines stands in the roster of countries as one with the highest electricity cost.

The problem is, the price spike doesn’t seem to jive with the lowering of fuel costs internationally. More so, it doesn’t help that government’s main reason for imposing numerous taxes on electricity generation and distribution is all for show, “to protect the country’s credit rating.”

This would put the Philippines as one of the countries with the highest cost of doing business. In fact, the European Chamber of Commerce of the Philippines raised concerns as to what must be done should the power crisis become extreme.

In their website, one of the proposals was to push “more participants in the Interruptible Load Program (ILP)—targeting those with large embedded generation capacities, such as malls, large business establishments and factories.”

The ILP participants “must we willing to run their generators for about 10 hours a day during times of extreme shortage of power”.

The proposition of Department of Energy (DOE) secretary Carlos Jericho Petilla to grant the President emergency powers so he could address the power crisis has come under scrutiny from the public.

Petilla cited Section 71 of the Electric Power Industry Reform Act of 2001 as justification for Pres. Aquino’s emergency powers in order for him to tap additional electrical capacity.

The problem with the proposition is that the ILP participants could further increase the cost of electricity than make it affordable.

The crisis will surely put the Philippines as one of the countries where the cost of doing business would be prohibitive. Business will be compelled to spend their capital on fuel and generators, rather than expansion.

To equalize productivity, companies will have to spend extra on personnel wages, extra machinery, operational costs, better security protocols for banks and lower profit margins. Maintenance, replacement and repair of damaged machinery due to power fluctuations could add to the expense.

In the end, the DOE must quit pussy-footing and do its job. Because any attempt to improve the country’s gross domestic product will fall by the wayside for sheer incompetence in the ways of power.

Since 2005

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

T. Anthony C. Cabangon Jun B. Vallecera

Associate Editor News Editor City & Assignments Editor Special Projects Editor

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

Online Editor

Ruben M. Cruz Jr.

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

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

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

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

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

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

HOM

www.businessmirror.com.ph

regional offices

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

CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001 n DXQM – 98dot7 HOME RADIO DAVAO STATION MANAGER: RYAN C. RODRIGUEZ E-MAIL ADDRESS: home98dot7@gmail.com ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996 n DXQS -98dot3 HOME RADIO GENERAL SANTOS STATION MANAGER: AILYM C. MATANGUIHAN E-MAIL ADDRESS: homegensan@yahoo.com ADDRESS: Ground Floor, Dimalanta Building, Pioneer Avenue, General Santos City CONTACT NOs.: (083) 301-2769/ 553-6137/ 0922-811-3998 n DYQN -89dot5 HOME RADIO ILOILO STATION MANAGER: MARIPAZ U. SONG E-MAIL ADDRESS: homeiloilo@yahoo.com ADDRESS: 3rd Floor, Eternal Plans Building,

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

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

Why good debt is good John Mangun

OUTSIDE THE BOX

A

BOUT 10 years ago I wrote a rather extensive article titled “The ‘Good Old Days’: Philippine Economic Progress Since 1988.” I have mentioned this research before, emphasizing the fact that the Philippines’ economic progress was held back by the government and the way it used its money. During the period from 1988 to 2004, the GDP was increasing at a rate of 4.5 percent on average, but government borrowing was rising at the phenomenal rate of 17 percent per year.

Of all the most important economic spending variables, government debt was not producing sustainable and productive economic activity.

We have this idea especially in this age of monstrous levels of debt, that borrowing money is almost evil. But the ability to borrow money is what has created the vast improvements in the global standard of living not only for all the modern gadgets we have but for the quality of life. In 1960 the average life expectancy for a Filipino was 54.3 years. In 2011 that jumped to 69.4 years and it is about the same for the whole planet.

Debt is a vital part of any economy that has moved beyond barter transactions and has made global trade possible. The fuel for the economic

growth engine is debt. It allows the idle money of one person to be utilized by another person for productive economic activity. One person has an idea that might change the world for the better. Another person has the money to make that idea a reality.

However, when you borrow money, you are bringing future consumption to the present. Borrowing to buy a car means that you have the car today rather than buying it in the future when you have saved enough money. Therefore, by moving future consumption to the present you are also taking away money that would have been spent in the future.

This is not a problem if your income continues to grow at or higher than the same amount of your debt repayment. In order to stay finan-

cially ahead, your income next year should equal what your debt payments were this year. If it does not, then you are actually falling behind.

The financial wizards like to say that it is not your income that makes you rich but your spending habits.

That is true. However, if your income is not growing, regardless of your spending habits, inflation will keep you poor if you are not always making more money.

With the exception of the first few years after President Cory Aquino came to office, the Philippine economy hit rock bottom in the time 2002 to 2004 regardless of the government propaganda. The government budget deficit as a percentage of gross domestic product (GDP) hit its low in 2002. Philippines Government Debt to GDP was at its high in 2004.

The nation’s fiscal house was put in order under President Arroyo with the increase in the Expanded ValueAdded tax in 2005. Since then; all the fiscal numbers have gotten better.

The budget deficit as a percentage of GDP has gone from 71 percent to 49 percent. The debt to GDP has fallen from a record low of -5.30 percent of GDP in 2002 to the current -1.4 percent.

But the key to the economic growth over the last 10 years come back to debt and the way the borrowed money, by both the public and the private sector has been spent.

W hi le br ing ing purchases

Honda’s bumpy road to recovery William Pesek

BLOOMBERG VIEW

O

VER the last 12 months, fortunes have diverged for Akio Toyoda and Takanobu Ito, the leaders of Japan’s No. 1 and No. 3 carmakers.

Toyota President Toyoda is the toast of Tokyo: His company is projecting a record $18 billion profit for the year.

Honda President Ito, who many view as the more visionary of the two, is out of a job. Toyota appears to have fully recovered following a major safety crisis, when its cars were blamed for unintended acceleration that led to several deaths.

Honda, meanwhile, is still grappling with a scandal involving deadly airbags manufactured by Takata, as well as several of its own quality-control issues.

A common thread, however, runs through their differing trajectories: the weak yen, which has become a major pillar of Prime Minister Shinzo Abe’s reform efforts.

In effect, Honda finds itself on the wrong side of Abenomics. In a Feb. 18 column, I held up the automaker as a shining example of the kind of global thinking that Japan should be encouraging in its

biggest companies. For 15 years now, Honda has been one of the rare Japan Inc. jewels that really “gets it”–building vehicles where it sells them and going where the growth is as Japan’s domestic market ages and shrinks. Honda’s efforts to shift operations abroad have been both prescient and bold. It first started making more cars abroad than in Japan in 2000. Nine years later, when Ito took the helm, Honda was manufacturing 72 percent of its vehicles overseas. Last year that number rose to 79 percent.

The shift outside Japan stretched resources and exposed the company to risks, such as devastating floods in Thailand. But these things happen when you leave home and forge paths outside your traditional comfort zone. With Abe now focused on resurrecting domestic demand, Honda should in theory have been able to recover from its recent woes in short order.

The problem, as I’ve written before, is that the most evident result of Abe’s reform efforts has been a massive quantitative-easing initiative that’s driven down the yen 30 percent since he took over. By contrast, major structural changes to the economy–plans to tighten corporate governance, lower trade barriers and loosen labor markets, among them–mostly remain on the drawing board.

The weak yen has been a godsend for companies like Toyota, which have maintained their massive domestic production base even as they focused on sales growth abroad; their labor costs have declined, even as overseas profits have swelled. Honda, meanwhile, may find it harder to bounce back from its stumbles given how small its local production operations have shrunk.

The cheap yen has punished other daring companies as well, among them budget carrier Skymark. In the two years before Abe launched his reform program, Skymark President Shinichi Nishikubo bet big on Japan’s travel market, ordering six Airbus A380 planes worth about $2.5 billion. The yen’s plunge made the payments all but impossible, thrusting Skymark into bankruptcy last month and Nishikubo out the door. The company is now looking for a lifeline from the likes of Malaysian budget airline AirAsia.

Of course, any Japanese recovery must be powered by several self-rein-

forward is one purpose of borrowing, another-the most importantis to make more money. You don’t borrow money necessarily buy a new Smartphone; you borrow to build a Smartphone factory.

Gross fixed capital formation (GFCF) measures the value of acquisitions of new or existing fixed assets particularly by the business sector and government. It is better to go hungry than borrow money to buy food. But borrowing to build for the future is the highest use of these funds.

In 2004, the Philippines GFCF began going higher for the first time in decades. GFCF reached an historic high in the fourth quarter of 2014. The lowest was in 1999. GFCF measures the increase-not the total value- of hard assets purchases. Government participation means good infrastructure projects and not just paying the daily bills with borrowing. For business it means expansion and improvement.

Borrow all the money you can afford to pay the debt service on as long as you create more wealth from that borrowing.

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.

forcing growth drivers. But Tokyo’s retrograde focus on a lower exchange rate is arguably doing more harm than good.

The number of bankruptcies linked to the yen, for example, surged to 345 last year, about 2.7 times that of 2013.

Abenomics bulls see these businesses as collateral damage necessary to revive Japan’s giants. And if those big companies shared profits with workers–boosting wages and encouraging consumption–the optimists might be right. But so far, there’s little sign of any meaningful uptick in wages.

Over the long run, Japan should want its companies to display the kind of vision Honda and Skymark have. “Compared to the hard work that Honda and much of Japan’s industries have already invested into such strategies for more than a decade, Abenomics becomes just a sideshow,” says Martin Schulz of Fujitsu Research Institute. The danger is that the weak yen will encourage complacency and a misguided faith in a production model that excelled in the 1960s and 1970s, but is less relevant today.

A better strategy would require broadening efforts to boost growth in ways that support small-and-midsize companies along with Toyota-like behemoths. As long as Japan predicates its turnaround on the backs of a small handful of huge exporters, the real damage will be to its economic future.

opinion@businessmirror.com.ph

Opinion

Service to BOI entities

As the beloved Son

BusinessMirror

Reynaldo M. Prudenciado Jr.

Msgr. Sabino A. Vengco Jr.

Tax Law for Business

Alálaong Bagá

T

HE OIC-Assistant Commissioner may have a point, but that alone does not authorize him to render ineffective the inclusion of services made to BOI-registered manufacturer/ producer whose products are 100 percent exported as an export sale subject to zero percent value added tax (VAT), the Court of Tax Appeals declared in CTA Case 8662, on February 2, 2015.

The case sprung from a deficiency VAT assessment made by the Bureau of Internal Revenue (BIR) against the taxpayer. Apparently, said taxpayer rendered management services to four mining companies, which are all VAT-registered with the BIR and also registered with the Board of Investments (BOI) as 100 percent exporter, pursuant to Executive Order 226. The taxpayer treated these management fees as VAT zero-rated pursuant to the proviso in paragraph (a)(5) of Section 4.106-5 of RR 1605, which states that the sales of goods, properties or services made by a VAT-registered supplier to a BOIregistered manufacturer/producer whose products are 100 percent exported are considered export sales.

The BIR, however, averred that any reference to sale of “services” under the said section is erroneous and unmistakably in conflict with the governing law, specifically section 108 of the Tax Code, where the zero-rated sale of services were enumerated. In the Final Decision on Disputed Assessments issued against the taxpayer, the OIC-Assistant Commissioner reasoned out that section 4.106-5 covers only “ZeroRated Sales of Goods or Properties” and the inclusion of services was “an inadvertent or typographical error.”

Thus, he concluded that the management fees should be subject to the 12 percent and not 0 percent VAT. But the CTA decided the case in favor of the taxpayer. According to the Court, the BIR was not accurate in contending that the entire section of 4.106 covers matters that only involve sale of goods and properties. At the time of the issuance of the assessment, section 4-106.5 (a)(5) of RR 16-05 clearly included “services” in the enumeration of the items that deemed to be “export sales” subject to the 0 percent VAT rate, when sold by a VAT-registered supplier to a BOI-registered manufacturer/producer whose products are 100 percent exported. Whether the inclusion of “services” among “export sales” subject to 0 percent VAT rate was erroneous or not is a point distinct from the fact of inclusion.

The Court further stated that, though the OIC-Assistant Commissioner may have a point, his course of action may not to render the proviso ineffective. As he has no authority to interpret tax laws, a power lodged exclusively with the CIR, he should have raised the matter to the CIR, for the CIR to issue a ruling and/or to recommend to the Secretary of Finance the issuance of the appropriate amendment or a new revenue regulation. Otherwise, he should have obtained from competent authorities, possibly from the courts, a ruling that the disputed proviso

“Taxpayers cannot be penalized for relying in good faith on the issuances by the tax authorities. Individual officers or employees of the tax agency may have their respective views on the correct interpretation of the tax laws. Indeed, they may have their point. But the power to interpret tax laws is the exclusive domain of the commissioner. That should be followed unless later amended or declared invalid.” is inconsistent with the Tax Code.

Further, while it is true that the CIR has clarified that any reference to sale of services under the disputed proviso is erroneous and unmistakable in conflict with the Tax Code, this pronouncement was made only in her memorandum, rather than in a ruling, and has not at all changed the text of RR 16-05, which can only be changed by the Secretary of Finance upon the CIR’s recommendation. Finally, the Court reiterated the settled doctrine that a taxpayer’s reliance in good faith on revenue rules and regulations cannot be prejudiced by the subsequent changes in the interpretation thereof.

This case again tells us that taxpayers cannot be penalized for relying in good faith on the issuances by the tax authorities. Individual officers or employees of the tax agency may have their respective views on the correct interpretation of the tax laws. Indeed, they may have their point. But the power to interpret tax laws is the exclusive domain of the commissioner. That should be followed unless later amended or declared invalid. In this case, since the regulations classified the transaction as among those VAT zero-rated transactions, that should be faithfully adhered to by the tax revenue officers, unless subsequently amended or declared void by the courts.

The author is a senior tax specialist 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 reynaldo.prudenciado@bdblaw.com.ph or call 403-2001 local 380.

T

HE faithful one will walk before the Lord and precious is his death in the eyes of the Lord (Psalm 116:10, 15, 1617, 18-19). Jesus transfigured is the beloved Son whose glory will be fully manifested when he had risen from the dead (Mark 9:2-10).

Walking faithfully before the Lord PSALM 116 (115 in the Greek and Latin versions) for the second Sunday of Lent is a song of faith and of thanksgiving. The faith of the psalmist remains constant even amidst his great affliction because he has known how loving and compassionate God is. That is why he confidently says: “I will walk before the Lord in the land of the living” (verse 9). He just knows that the Lord is there for the righteous and will not allow him to stumble; as a deeply believing person he intends to walk faithfully on the paths of the Lord. And even in the case of death, which people ordinarily think is a wretched event, the psalmist proclaims his trust that his own death will be precious and of special value in God’s sight.

The bond between God and the psalmist is strikingly graphic: he refers to himself as God’s servant– “your servant, the son of your handmaid”–as in the household structure

where the son of a serving girl is born a slave and belongs as well to the master. But God had mercy on him and loosed him from servitude. Released from bondage, he now offers a sacrifice of thanksgiving and calls upon the name of the Lord in praise and gratitude, proclaiming before all the goodness of the Lord. Furthermore, he takes vows to be faithful to the covenant ever grateful for his deliverance, and nowhere else but before the presence of the Lord in the holy city of Jerusalem within the courts of the temple.

Transformed in God’s love

THE transfiguration of Jesus reveals his identity as God’s Beloved Son. This changing in form (transformation) is a manifestation of the eschatological fullness and glorious heavenly form that awaits the righteous—symbolized by a dazzling whiteness. “Up a high mountain” where Jesus is in loving communion with God, divine love permeats his

The best tourist guide Ariel Nepomuceno

DECISION TIME

T

HE Philippines has the natural jewels that are capable of attracting the targeted 10 million tourists that must visit and experience a memorable vacation in the so called Pearl of the Orient. However, we have yet to fully take advantage of our strengths as a winning tourist hub. And we are still far from resolving the challenges that weaken our chance of successfully competing against other destinations.

Income brought by the tourism industry directly benefits the economy.

In 2013 for example, tourism contributed at least 7 percent to our gross domestic product. By 2016, the target is to increase this to 11 percent.

Hence, if this is achieved, tourism will start to indeed be an important pillar of our economic growth. On that year, 6.8 to 7.5 million Filipinos will be directly employed in tourism related services or businesses. In 2011, actual employment in tourism industries was estimated at 3.8 million workers.

Foreign tourists spent around P 35.5 billion on shopping in 2011 according to the National Statistic’s Coordination Board. This amount was on top of the P31.8 billion spent for food and beverage and P 30.4 billion for accommodations. If we add the shopping expenses done by domestic tourists, total expenditures on shopping alone was P185.9 billion.

To put this into another perspective,

the total expenses on shopping contributed by the tourism sector is at least seven times the total annual remittances of P25 billion sent by our hard-working millions of overseas Filipino workers.

Infrastructures must be improved

ALONG with other parameters such as natural resources, price competitiveness, prioritization of travel and tourism industry, visa requirements, we have to catch up with the necessary infrastructures to ensure the pleasant stay of our international guests.

Our airports must be at par with other international airports. Our total airport capacity must be increased from 59.7 million passengers to 75.8 million. The facilities in the said airport must be further enhanced. The current management of the Manila International Airport Authority under former Air Force General Jose Angel Honrado must be credited for

Republicans unite to ignore immigration in 2016 Ramesh Ponnuru

BLOOMBERG

I

MMIGRATION is supposed to be a bitterly divisive topic for Republicans.

Yet a very narrow range of opinion separates the party’s leading presidential candidates, which is unfortunate for the country.

The last Republican presidential nominee, Mitt Romney, opposed giving legal status to illegal immigrants. But most of the candidates this time around favor it. Jeb Bush thinks many illegal immigrants should be offered legal sta-

tus, and maybe even citizenship. Scott Walker has taken the same view. So have Marco Rubio and Bobby Jindal. Ted Cruz (for the record, a friend of mine) opposes citizenship, but favors offering legal status. That’s where Rand Paul is too.

None of them, understand, supports “amnesty”: That’s what they call other people’s plans. They just happen to support policies that are identical to what amnesty opponents say they’re against.

And that’s not the only part of immigration policy where the field has reached a consensus. Paul and Bush both explicitly favor expansive guest-worker programs; none of the other top- tier candidates has spoken up against it.

Everyone also seems to favor increasing legal immigration. Several of them say so explicitly, while others’ views can be inferred from their comments and votes.

The outlier among Republican candidates is Rick Santorum, who has voted against guest-worker programs and thinks legal immigration levels should be reduced. He’s “the only one who’s trying

to push the envelope in terms of what’s being debated,” says Mark Krikorian, who heads the Center for Immigration Studies, a restrictionist research group.

But Santorum’s view is not a fringe one. In the most recent Gallup Poll on the topic, 39 percent of Americans wanted less immigration and only 7 percent wanted more. You wouldn’t know it from watching politicians.

When Senator Jeff Sessions of Alabama offered an amendment that would cap legal immigration over the next decade at a generous 33 million, he was the only one to vote for it. Seventeen of his Judiciary Committee colleagues (including Cruz) said no.

Krikorian argues that “this is an elite versus the public issue.” Business executives, religious leaders and edito-

Thursday, February 26, 2015

entire being and like a white light at the center radiates outward illuminating the whole surrounding and affecting even his clothes.

High up on that mountain, Jesus shares God’s goodness with two men who also encountered God on mountains and were transformed: Moses on Mount Sinai (Exodus 19) and the prophet Elijah of Mount Horeb (1 Kings 19). The two, prefiguring the prophetic dimension of the coming of the messiah, are seen in deep conversation with Jesus. Also, Jesus shares this mystical depth of himself with an inner circle of his friends, Peter, James and John. They knew and followed him earliest; they needed personally to know him best; they would be formally proclaiming him most. This miraculous vision of Jesus is a gift they would have to reflect upon again and again and share with others to help build a faith stronger than death.

When risen from the dead

THE proposal of Peter that they build three tents on the height echoes, despite their being terrified, the desire to hung on to this tremendous experience. “It is good that we are here.” But a cloud descends on them and covers them–the sense of transcendence deepens; mystery shrouds them. And a voice from the cloud reveals what was revealed to Jesus at the Jordan: “This is my beloved Son. Listen to him.” The whole revelation is intended for the benefit of all followers of Jesus–to make them attentive and obedient to him, to

A7

sustain their commitment to him.

As the disciples see “Jesus alone with them” without the other two figures, it becomes clear that Jesus is not one of the past prophets but the only one now for all.

The transcendent experience dissolves, and human reality sets in again complete with the shadow of death. Actually, the idea of death was not really absent: the identification of Jesus as “the beloved Son” recalls to mind Isaac, also called a beloved son (Genesis 22:2), set to be sacrificed. Jesus’ divine approval is beyond doubt, but God’s plan for him includes death because it involves “rising from the dead”. The disciples tried to figure out by themselves what “rising from the dead” means, but they would have to wait for the time when Jesus again shares with them that experience of divine mercy and love in his own paschal sacrifice.

Alálaong bagá, Jesus’ glorification is preceded by his death; his transfiguration on the mountaintop is a foreshadowing of the triumph of divine love following his sacrifice on Calvary. His would be the beloved Son’s death most precious in the eyes of God and of inestimable value to all humankind. In the great affliction of His faithful servant, God would come in mercy and compassion, so that all can call upon the name of the Lord in thanksgiving.

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.

THE efforts and achievements of the Department of Tourism’s Secretary Ramon Jimenez Jr. are widely acknowledged. Tourist arrivals already broke the 4 million mark last year.

About 4.8 million guests visited the country in 2014. Such increase in tourist traffic, international awards, and effective marketing campaigns are testimonies to the effective management of our current tourism officials. However, these will never be sufficient. Everyone must contribute in ensuring the success of our tourism industry.

The laws and ordinances penalizing crimes or abuses against our visitors must be reviewed for the possibility of further protecting our tourists. Take for example, the recent fatal shooting of 3 foreign nationals, 2 Indians and a German, in a famous fast food chain in Cebu. The incident is an embarrassment to all of us.

That’s not how we should deal with our guests. The media must assist in building strong awareness to make our society friendly to foreigners.

Local government units and the Philippine National Police (PNP) could undertake a more institutionalized program to make our tourists feel more secured or protected.

Those traveling in countries such as Singapore, Malaysia, Hong Kong, Thailand and our other neighboring countries have the peace of mind that the streets in those places are safe. That must be achieved here. In Roxas Boulevard for example, the City of Manila can deploy dozens of blue guards to be visibly seen 24/7 by our guests who are charmed by our sunset. Or the PNP can create a special police unit that is primarily trained and dedicated to address the needs of our guests. Tourist Police is now a common sight in other Asian destinations.

Everyone must be conscious that the international tourists of the country are our personal guests.

We must instantly give the warmth and protection expected from us as hosts. We must be outraged by the petty crimes and abuses that many of our guests experience. The embarrassment caused by victimizing our guests must be our common concern.

We must aspire that our visitors will say good words about our country when they go back to their communities. After all, the tourists that have experienced the natural beauty of our country and the sincere hospitality of our people are the best tourist guides of our country.

rial writers at prominent publications _ along with the politicians who spend time with them, court their approval and seek their donations _ are much more likely than other Americans to want increased immigration.

This elite consensus has something to recommend it, especially its sympathy for and realism about the millions of unauthorized immigrants who have been living in the U.S. for years. But granting them legal status may just encourage more illegal immigration unless politicians resolve to enforce the laws more strictly _ and much of the public doesn’t trust them to do that, partly because they know that elites don’t represent them on this issue.

This zeal among Republican candidates for higher levels of immigration,

as well as for a guest-worker program, also seem wrongheadedas a matter of policy.It stands to reason that immigrants would assimilate more quickly _ and earn higher wages _ if the country took in fewer of them, and didn’t consign many of them to a second-tier workforce without the rights and responsibilities of citizenship. It would probably also be better for Americans doing low-wage work if they didn’t have to compete with temporary workers willing to put up with poor pay and labor conditions.

These are questions that could usefully be debated by presidential candidates.

But that would require candidates who disagreed about them. In their absence, what we will probably get instead of a real debate are more word games about “amnesty.”

the vast improvement that has been instituted in our gateways in spite of the limited budget of his agency.

More rooms must also be built mainly by the private sector so that more visitors can be accommodated by the country. In 2012, around 145,782 rooms were available in the entire country. This number must be increased to at least 183,134 rooms according to the studies done by National Economic and Development Authority and the Department of Tourism.

Public roads and highways leading from the airports to our famed tourists spots must be completed.

Strong public support

2nd Front Page BusinessMirror

A8 Thursday, February 26, 2015

www.businessmirror.com.ph

Low inflation to encourage Pinoys to spend

By Cai U. Ordinario

F

ilipinos are likely to spend more this year as consequence of inflation further easing to around 2.7 percent this year, according to First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) Capital Markets Research.

In its latest Market Call publication, the think tank said the slowdown in inflation was fueled

by the continued decline in oil prices. Analysts at the investment house and the think tank expect oil

prices to remain below $60 per barrel throughout the year.

“Oil prices will remain below $60 per barrel during the year, and so inflation would ease to 2.7 percent, providing more purchasing power to consumers and firms,” the partners said.

“Continuing decline in rice prices and crude-oil prices breaching $50 per barrel should put further downward pressure on inflation. We expect H1 [first half of the year] inflation to average 2.4 percent, and only slightly higher in H2 [second half of the year],” they added.

The increase in household spending, fueled by low inflation, will also be accompanied by an increase in

public spending. The partners said the national government will likely accelerate spending this year, particularly in infrastructure.

The government’s infrastructure spending will be boosted by the start of big-ticket public-private partnership (PPP) projects, as well as preparations for the 2016 presidential elections. The partners said the government also has fiscal space to increase infrastructure spending. It said the government expects the country’s full-year deficit in 2014 to fall below the target level of 2 percent of gross domestic product (GDP).

The low inflation environment, as well as election spending, was seen to boost the country’s local output

growth, or its GDP, to around 7.3 percent this year. FMIC and its partner earlier said growth this year should range from 7 percent to 7.5 percent.

“FY [fiscal year] 2014 GDP may have disappointed many investors and analysts. However, the growth acceleration will continue well into 2015. Thus, we think GDP growth this year will likely hit 7.3 percent,” the partners said.

In 2014 the Philippine economy posted growth of just 6.1 percent, the slowest since 2011, when the economy posted a full-year economic growth of 3.7 percent.

The government cited the country’s lackluster economic performance in the first three quarters last

New PDP to include ‘natural accounts’

Biofuel makers also forced to cut output on falling oil cost TYNER: “Gasoline is down a lot and corn has come back up a bit.”

Balisacan said the National Capital Accounting, which is being conducted through the PhilippineWealth Accounting and Valuation of Ecosystem Services, is crucial to support the country’s future economic growth.

E

thanol producers are cutting output after getting squeezed by the biggest drop in gasoline prices since 2008.

Valero Energy Corp. and Green Plains Renewable Energy Inc., representing about 15 percent of US capacity, have reduced operations as margins narrowed. At a typical mill in Illinois that makes ethanol from corn, profit margins have almost totally disappeared, compared with $1.33 a gallon a year ago, according to AgTrader Talk, a Clive, Iowa-based consulting company.

Gasoline and crude fell more than 50 percent from their peaks in June as the US shale boom helped global oil production outpace demand. While that was good for consumers, saving each American household $750, it dragged down the cost of ethanol 41 percent because the price is linked to gasoline.

At the same time, corn, the main raw material used by biofuel producers, fell just 19 percent.

“Gasoline is down a lot and corn has come back up a bit,” Wallace Tyner, an agricultural economist at Purdue University in West Lafayette, Indiana, said by phone on February 23. “If you’re an ethanol producer, that doesn’t leave you much.” Gasoline lost 0.5 percent to $1.6125 a gallon in electronic trading on the New York Mercantile Exchange at 2:06 p.m. Singapore time.

Ethanol production

U.S. ethanol output fell 2.8 percent to an annualized rate of 14.8 billion gallons in the week ended February 13 from a record 15.2 billion last December, according to the Energy Information Administration (EIA).

Valero said on January 29 that it slowed run-rates by 2.6 percent for the first quarter, citing lower gasoline and ethanol prices and “relatively stable” corn costs. Green Plains CEO Todd Becker said on February 5 that he’s cut production rates “a bit as well.”

Lakeview Energy Llc., a Chicagobased renewable-energy company, lowered operating rates by 15 percent at its Coshocton, Ohio, biorefinery, COO Eamonn Byrne said on Tuesday by phone. More cutbacks appear likely. US inventories total 21 million barrels, the highest seasonal level since 2012, according to the EIA, the Energy Department’s statistical arm. Supply will tighten as plants with higher costs slow, according to Archer-Daniels-Midland Co. CEO Juan Luciano, whose company is the biggest US producer. Bloomberg News

year as reason for the slower growth.

The recovery in government spending in the final quarter last year boosted GDP growth in the fourth quarter to 6.9 percent. But this was not enough to pull up the country’s full-year economic growth.

The full-year economic growth in 2014 placed the Philippines as the second fastest-growing economy in Asia and the country’s fourth-quarter growth placed the country as the third fastest-growing economy in Asia during the period. The fastestgrowing economy in Asia in terms of full-year and fourth-quarter growth was the People’s Republic of China with a growth of 7.4 percent and 7.3 percent growth, respectively.

T

In this photo taken on February 20, Leo Renier, executive director of the 40th International Bamboo Organ Festival, poses with centuries-old world-famous Las Piñas Bamboo Organ inside the Saint Joseph Church at Las Piñas City, south of Manila. The nearly 200-year-old Philippine bamboo organ, said to be the oldest and largest in the world, has survived time, storms and wars. But an annual concert that has showcased its unique, lilting music in a Roman Catholic church for four decades may play out for the last time this year due to waning funds and interest in a country where many have been enthralled by modern Western music. AP/Bullit Marquez

Waning funds threaten to end 40-year bamboo organ fest in Las Piñas church I t has survived time, storms and wars. But a nearly 200-year-old bamboo pipe organ, said to be the oldest and most complete in the world, is facing what may be its biggest threats yet: pop music and dwindling donations.

For the last four decades, music lovers from as far away as the US, Argentina, Australia and Europe have come every year to a Philippine Roman Catholic church to hear the organ, the centerpiece of an international music festival. Chances are, this year will be the festival’s last edition.

Organizers say they are broke because funding from traditional donors, including the Philippine government, European embassies and corporate sponsors, is drying up. Private companies are more keen to be involved in pop concerts than classical music, said Leo Renier, a Belgian, who founded the International Bamboo Organ Festival in 1975.

“They [corporations] are more interested in entertainment,” said Renier, a former priest and the festival’s executive director. “If Justin Bieber

of Canada comes, millions they are ready to spend.”

Without the festival, the unique sound of the organ—completed in 1824 by the Spanish priest Diego Cera—would have no venue to really shine, Renier said. Sure, it would still be played during services at the Saint Joseph Church in Metropolitan Manila’s Las Piñas City, but its sounds would never reach the ears of the world.

The organ, which is about 17 feet in height and 13 feet wide, and occupies a portion of a wall on the left side of the church, produces clear, flute-like sounds through its 902 bamboo and 129 metal pipes.

By pulling different knobs, an organist can make the instrument produce distinct sounds, which one player said was like calling on different members of an orchestra one after another.

As of last Wednesday, the eve of the eight-night festival that ends on Friday, organizers had secured only a portion of the P3.2 million they need. The rest of the pledged donations had still not come in.

Ticket sales alone were not enough

to fund the performances. By next year, the reserves of the foundation that runs the festival will be dry.

“The bamboo organ is not just a piece of furniture with bamboo, but you have to hear it,” Renier said, as performers rehearsed music from Bach’s Mass in B minor under chandeliers made of Capiz shells and bamboo.

Swiss organist Guy Bovet, in his seventh year at the festival, said, “All the bamboo parts of the organ are very gentle, and reminds you a little of, I would say, a pan pipe, or something like a wooden flute.”

Renowned overseas musicians receive minimal pay to attend the festival, which serves as a forum for musicians to meet and a training ground for local talent. Several former members of the Las Piñas boys choir, which performs at the festival, have gone on to pursue international careers in music and organ building after training in Europe.

The festival’s artistic director and resident organist, Armando Salarza, is a product of the boys choir, and has played the bamboo organ since he was 11. After high school, he was

sent on a scholarship to study music in Graz in southeastern Austria.

He did his post-graduate studies in Vienna, but came back in 1992 to share his talent with the younger generation in his hometown.

“It’s the only place in the Philippines where you hear this kind of music and with this kind of interpretation,” said Salarza, a professor of organ at the University of the Philippines.

Throughout its existence, the festival has been dedicated mainly to Baroque music, which preceded classical, because the bamboo organ was built as a retro 18th-century Iberianstyle instrument.

Salarza said such music is seldom introduced in Philippine schools, with popular music most often heard in public places and on the airwaves.

The challenge, he said, is to educate and expose children to it.

“We keep coming back because it’s a wonderful atmosphere, you find that nowhere else in the world, and the sound of the organ is magnificent,” said Jules Maate, a 53-year-old Dutch expatriate who attended the festival for the fourth time. AP

he national government intends to include the results of the Natural Capital Accounting (NCA) in the next Philippine Development Plan (PDP), the country’s economic blueprint.

National Economic and Development Authority (Neda) Director General and Socioeconomic Planning Secretary Arsenio M. Balisacan said the NCA, which is being conducted through the PhilippineWealth Accounting and Valuation of Ecosystem Services (WAVES), is crucial to support the country’s future economic growth.

“The results of the environmental accounting being done by the Philippine-WAVES could help inform the next Philippine Development Plan, which we will start formulating by the third quarter of this year. In the new plan, we intend to retain the valuation of ecosystem services as a key strategy in the sustainable management of the environment and natural resources,” Balisacan said.

Balisacan added that there is a risk that high economic growth could stress the country’s natural resources without integrating environmental accounting in national and regional development plans.

The country’s NCA is being conducted through the World Bankfunded Global WAVES program.

The $1.5-million PhilippineWAVES project was launched in the country in April 2014. It aims to mainstream natural capital in development planning and in the economic accounts to support sustainable development.

“Through NCA, the worth of a service that we get from the natural environment will become known to us and, if this is taken into account directly in the estimation of national incomes, policymakers may now make better decisions about development priorities and investments, while promoting a more sustainable use of natural resources,” Balisacan said.

The Philippine-WAVES project, launched in April 2014, will pave the way for the crafting of a national account and associated indicators for mangroves, whose role in protecting coastal communities against storm surges and other climate change-related events was See “PDP,” A2