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Experts see exchange rate diving below 50/dollar in 2017 through 2018
Peso plunge to continue T
By Bianca Cuaresma
he local currency, now a regional laggard, is seen to perform even worse than the government originally projected this year, as internal and overseas concerns drag the peso. Only last month, the economic managers recalibrated the projected exchange rate for this year and 2018 from 48 to 50 against the US dollar. Previously, the assumed rate ranged from 45 to 48 per dollar, but was subsequently adjusted to reflect the more recent deterioration of the peso. Toward the end of 2016, the peso—along with other regional currencies—fell to its lowest at the tail end of the global financial crisis, as markets grew apprehensive over local and international events. Domestic developments, mainly political, were similarly cited as concerns that dampened sentiments on the peso. “Given the year-to-date average of the peso against the US dollar, we have to be more conservative than the past assumption on exchange rate,” Bangko Sentral ng Pilipinas Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo told reporters.
Dynamics
But private economists see the
peso performing worse than earlier thought by the economic managers, with forecasts for the year hitting above the 50-per-dollar ceiling set by the government. Switzerland-based UBS Bank said it sees the peso ending 2017 much weaker at 51 per dollar, and an even bleaker prospect in 2018, with a forecast rate of 55 to a dollar. The investment bank said the macroeconomic developments foreseen in 2017—such as prospectively lower GDP, late boost in fiscal policy in 2018, a depleted current-account balance and higher prices of goods— should have direct bearing on the local currency’s strength. “These dynamics are likely to induce currency weakness. We expect growth to slow in the Philippines—while the external balance has deteriorated, removing a buffer to global capital flows as the Fed is due to raise rates. Rising inflation and higher oil prices will also hurt the Philippines, as it is a net oil importer,” UBS said. It quickly added that the peso is Continued on A2
PBED, youth groups warn public of pitfalls of free-tuition initiative “Undeniably, this gift of free tuition in SUCs should be [a] blessing to many Filipinos, for college tuition is a significant barrier to college. In my experience, however, tuition is not the sum of the costs of college. Most of the fees are charged as miscellaneous fees, lab fees, athletics, library, etc.”—Basillote
PESO exchange rates n US 49.5310
By Rizal Raoul Reyes
T
he move initiated by the Duterte administration to allot P8.3 billion to the Commission on Higher Education (CHED) to fund the tuition of all students in state colleges and universities (SCUs) next year has been initially met with positive responses, especially those coming from the marginalized sector. Since it is considered as the “great equalizer,” many believe that getting a free college education will free them out of the shackles of poverty. But Philippine Business for Education (PBED) Executive Director Love Basillote cautioned the people not to jump for joy on this so-called education bonanza. “Free tuition in SUCs is a shiny, but shortsighted, gift. It’s gift-giving season, and we have just been handed something new and shiny by Congress: free tuition in Philippine state universities and colleges,” said Basillote in a material provided to the BusinessMirror. Although the announcement “could potentially raise every Filipino’s quality of life and realize [a college diploma is a passport to]… climbing the economic ladder,” Basillote prefers to temper the expectations on this populist move by the administration. “Undeniably, this gift of free tuition in SUCs should be [a] blessing to many Filipinos, for college tuition is a significant barrier to college. In my experience, however, tuition is
not the sum of the costs of college. Most of the fees are charged as miscellaneous fees, lab fees, athletics, library, etc.,” she said. In a study commissioned by PBED, data showed tuition only account for 40 percent to 70 percent of total cost of a college student per year. The CHED computed that a student will spend an average of P60,000 per year for college. “Where will a poor student get the P18,000 to P36,000 per year in other costs, when they barely earn enough for subsistence?” Basillote said. It would be a waste of time and resources if poor students end up either not enrolling or dropping out, because they couldn’t afford the other costs of college. Although free tuition provides access to college education, Basillote pointed out that a student also has to tackle another challenge or obstacle of staying in college until graduation, which she describes as rather “expensive story.” Graduating from college is not the end of struggle of a poor student. He needs to find employment to become a productive member of society. And the prospects are not upbeat on the job market. The national youth unemployment rate (14.1 percent in 2016) is almost triple the unemployment rate (5.7 percent in 2016). Disturbingly, half of unemployed Filipinos have some college education. For those employed, underemployment is an even bigger problem, with 17. 9 percent reportedly seeking more See “Free Tuition,” A2
n japan 0.4286 n UK 61.5225 n HK 6.3874 n CHINA 7.1961 n singapore 34.6759 n australia 36.3310 n EU 52.5128 n SAUDI arabia 13.2055
Source: BSP (6 January 2017 )
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A2 Saturday, January 7, 2017
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Peso plunge to continue Continued from A1
likely to experience some “catch-up” weakness in the next two years.
Peso overshoot
ING Bank Manila also projected the peso approximating 52 by the end of the year. Among the concerns to watch out for in 2017, according to ING, include China’s transition, the anticipated policy changes under US President-elect Donald J. Trump, oil-price volatility and developments in the eurozone. Local factors were also seen to weigh heavily on the economy, according to ING Bank, no matter the country’s strong growth trajectory, as the political noise diminish and likely further dampen sentiment on the peso this year. “Perceived lack of President’s political support for economic reforms does not help improve sentiment, even as economic indicators were quite favorable. Bringing the President’s high political capital behind economic reforms pending in Congress and invigorate antipoverty initiatives would help mend the frayed investor confidence,” the bank said. Other global lenders, including HSBC and regional banking giant DBS Bank, also see the peso overshooting the projected exchange rate for the year. HSBC said the peso should end 2017 at 50.70 per dollar, as prices inflate based on projections made in 2016. Singapore-based DBS Bank, meanwhile, anticipates the peso hitting 51.1 per dollar by the end of the year, or off by more than a peso from the upper limit of the projected rate. The forecast weakness of the peso was also expected to spill over to the local economy.
Manufacturing
Earlier this month, the purchasing manag-
‘B
ringing the President’s high political capital behind economic reforms pending in Congress and invigorate antipoverty initiatives would help mend the frayed investor confidence.”—ING Bank ers’ index (PMI) slowed, despite the strong demand during the long Christmas holidays; and one of the reasons cited was the weaker peso translating to higher cost of input prices. IHS Markit economist Bernard Aw has, likewise, warned that the sector will continue to be adversely affected should the local currency devalue further. “If this continues, manufacturers’ profit margins may come under pressure in the coming months,” Aw said.
Remittances
While good for dollar-earning migrant workers and will prospectively boost the purchasing power of remittance recipients that help pump up domestic consumption, the money sent home by overseas Filipino workers the past months has shown diminished purchasing power due to the strengthening US dollar versus other currencies, including the peso. Latest data from the central bank show the weaker peso helping convince Filipino migrant workers to send fewer dollars in October last year, with total remittances actually posting a contraction during the period. Money sent home by overseas Filipinos declined by 3 percent last October to $2.1 billion for the month, coming down from the
$2.16 billion in the same month in 2015 and from the $2.38 billion last September. “The lower US dollar value of remittances in October may also be partly due to the depreciation of major host countries’ currencies vis-à-vis the US dollar, such as the pound sterling and the euro,” the central bank said. The peso averaged 48.348 to a dollar last October, data from the central bank show, lower by about a peso from the previous month’s 47.429 to a dollar. The peso further lost ground coming into November when it entered the 49-per-dollar territory. Progressively lower remittances coming into the country could spell out trouble for an already weak current-account surplus balance coming into 2017 and the overall balance of payments (BoP) for the year. Remittances are a large part of the country’s BoP, particularly in its current account, which is the core component of the country’s BoP. The current account has been in surplus since 2003, acting as a cushion in times of externally induced stress, such as the global economic crisis hitting hard those with weaker current-account balances. However, the BSP earlier acknowledged downgrading the current-account forecast for 2017 to only $800 million.
Inflation
The prices of goods and commodities in the country was also seen to inflate along with the peso’s weakness, despite claims of government officials the currency movements should not impact inflation as much as in prior years. Earlier, central bank officials assured the public the weaker peso around year-end should not unduly impact the overall inflation path. BSP Managing Director for the Monetary Policy Subsector Francisco Dakila Jr. said that, despite the peso’s weakness, the impact of the peso on inflation has progressively diminished through the years.
Free tuition… gainful employment. Meanwhile, Basillote mentioned employers are encountering problems in selecting employees with the right skills and competencies. “Clearly, mere college attendance is not enough for a successful postcollege life,” she said, Asked for an alternative, Basillote urged the government to allot the money to develop a system that will empower the students by allowing them to choose the school and program that fit their needs, interests and plans for the future? Other countries, like Australia, offer excellent models of vouchers for higher education. “What if we used taxpayers’ money to make colleges and universities compete on their ability to reach those who are from poor backgrounds, graduate its students and ensure gainful employment, instead of rewarding institutions that offer mediocre education? Higher-education indices are increasingly becoming popular, as governments heighten the pressure on universities and colleges to deliver accessible highquality education. How about leveraging these funds to encourage more partnerships?” she pointed out. “A good and forward-thinking strategy is needed to solve inextricable goal of free access to quality education. We all do not want this P8.3-billion higher education boon to end up raising people’s hopes up only to turn those hopes into dust like the fireworks we lighted up this holiday season: noisy and bright but dangerously short-lived.”
Voices from the youth
Joanne Rose Lim, spokesman of the Samahan ng Progresibong Kabataan (Spark), said the youth sector welcomes the development of free tuition because legislative and fiscal institutions have realized it is possible to implement it. Nevertheless, Lim cautioned the youth sector to be on their guard. “Despite this, the youth must remain vigilant over the next steps the CHED, and other similar institutions, will take for it to be implemented without a hitch. With a bigger budget at hand, graft and corruption is its consequential twin,” Lim said in a news statement. Spark claimed the administration made an empty promise and downright blindsiding only to be used as an achievement for electoral slogans and campaigns. “This is not the free education we want,” Lim said. “The news was misleading. When we say free education, we mean education that is completely free from tuition and other school fees. We would not settle for anything less,” Lim added. While clamoring for bigger budget in education, as Lim said, “is one of the few things we can control in the education system,” the group also gave fair warning that the higher budget in education may attract more corporations and more privatization schemes. Spark said the struggle for quality tertiary education still has a long way to go. Lim said tertiary education should be shielded from corporate interests because it will “only harm and deteriorate the quality and nature of education.” “Truly, we still have a long way to go toward education that is free, [of better] quality, accessible and liberated from the market. And we still have the primary and secondary education system we need to fix,” she added. Meanwhile, scholar-activists also
“What we’ve seen is the passthrough from the peso to inflation has gone down considerably through the years with inflation targeting,” Dakila said. While economists agree that the weaker peso should not derail inflation from the target band for the year, a weaker peso could translate to higher prices in 2017. “[We] expect inflation to average 2.7 percent in 2017, up from a projected 1.7 percent [in 2016]. We see some upside risks to our projection, given the anticipated weakening of the peso,” DBS Bank economist Gundy Cahyadi said.
Continued from a1
lamented that the increased allocation for education is still not adequate to meet the international standards set for education spending in developing countries by the United Nations. “The present budgeting process speaks volumes about where education stands in the national government’s priority,” said Zaira Baniaga, chairman of Kaisa-UP, in a news statement. “While we are automatically appropriating a large sum of our budget to paying for our foreign debts, the budget for education has never significantly exceeded 3 percent of our GNP, a far cry from the Unesco [United Nations Educational, Scientific and Cultural Organization] standard of 6 percent from the GNP, set as far back as 2008,” she added. Baniaga said the passing of the Six will Fix! bill, a legislation ensuring the automatic appropriation of 6 percent of GNP, will ensure that free education in all levels will provide better quality and greater accessibility, ensure just wages for teachers and workers in the education sector, as well as quality facilities needed by students in all levels. “If the President is serious in his promise of delivering change, he must do so by prioritizing the Six will Fix! bill as urgent, ensuring that free quality education will not suffer from arbitrary changes, nor be subjected to annual competition with other parts of the national budget,” Baniaga said. “The right to education in all levels by all citizens is not up for debate,” Baniaga said. “If the President believes in investing in the country’s future, he must not be among those who stand in the way of free education,” she said. The Six will Fix! bill has already been lobbied by Kaisa-UP in both Houses of Congress.
Beyond access
Although PBED supports the government in its education agenda for greater access to quality tertiary education, it has warned the concerned sectors to focus on addressing the effects of pure access, as youth unemployment rate in the country is almost triple the national unemployment rate and half of unemployed Filipinos have some college education, while employers are having difficulty finding employees with the right skills and competencies. “In our innovation age, a diploma is no longer a guarantee for employment. More important is improving the quality of tertiary education,” PBED said in its position paper. It called upon the government to craft a forward-looking curriculum that will be anchored on science and technology to prepare the country’s population in the information age. “For the Philippines to capitalize on its young population in a world of increased use of robotics and artificial intelligence, and an intensified competition for talent, education investments should be strategic and with the long term in mind,” it pointed out. Moreover, PBED urged the government to craft incentive programs to partnerships between academe, industry and the government in providing relevant education programs and skills training. It also called for the institutionalization of quality measures that will provide incentives to tertiary-education institutions, both public and private, to compete on the basis of quality outcomes.
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Learning to bow
Saturday, January 7, 2016
A3
Japan slowly opens door to Filipina maids
I
n a Japanese-style apartment, Maria del Bago learns how to properly bow, clean traditional tatami floor-matting and decipher instructions for a high-tech toilet.
But she’s not in Tokyo. She’s 3,000 kilometers (1,860 miles) away in Manila. Bago, a 37-year-old computer-science graduate who previously worked as a housekeeper for an Arab family, is one of 26 experienced cleaners selected by Pasona Group Inc. to undergo more than 400 hours of language and skills training in the Philippine capital. They are set to begin work in Japan in the spring. “I’d like to think I’m a faster learner,” Bago said. “I also trust that the training that I get will let me adjust easier and avoid being culture shocked.” The program is the latest step toward opening up Japan to more foreigners, as Prime Minister Shinzo Abe’s government seeks ways to counter a shrinking labor force that threatens to hamstring the world’s third-biggest economy. But with a majority of Japanese opposed to a mass influx into a largely homogeneous society, the government and the firms involved have adopted an exacting admissions process.
‘Step forward’
“It’s inadequate,” Robert Feldman, chief economist at Morgan Stanley MUFG Securities Co Ltd. in Tokyo, said of the housekeeper policy. “However, the fact that they’re doing it at all is a piece of progress. Given what’s happening in the rest of the labor market, it’s at least one step forward.” The admission of cleaners from overseas—first to Kanagawa and Osaka and later to Tokyo—is aimed at making housekeeping services affordable for the middle classes and getting more Japanese women into the work force. These women are needed to help buck a current trend that could see the labor force of about 65 million collapsing by more than 40 percent by 2060, according to a government panel projection. Heizo Takenaka, a former economy minister who now serves on a government panel on special economic zones and as chairman/director at Pasona, sees the housekeeping program as Japan’s first serious attempt at bringing in the workers needed to put the economy on track. While immigration opponents fear a rise in crime if rules are eased, he cited Singapore as an example of a country with many foreigners and low crime. “This won’t change things drastically,” Takenaka said of the housekeeping program. “It is a very Japanese way of doing things. We couldn’t have them flooding in like they do in Hong Kong.”
Humility wanted
Under the new visa category created for special zones, cleaners must be employed full time by agencies, rather than individuals, and be paid as much as their Japanese colleagues. Rather than living with a family, recruits must be provided with their own accommodation. They must also speak basic Japanese. “Attitude is as important as skills,” said Contessa Tadena, a trainer in the Philippines who works at Magsaysay Center for Hospitality and Culinary Arts, whose sister organization Magsaysay Global Services Inc. dispatches the maids. “I teach my students the value of honesty, respect and politeness. You have to be kind as a whole, aside from being hardworking.” Two participants have already been rejected from the course for failing to show sufficient humility. Abe touted the idea of foreign cleaners and elderly-care workers in a speech at Davos in January 2014. But with employers required to jump through so many hoops, it has taken three years to get the first couple of dozen workers ready, even though there is no set limit on how many can enter.
Delays, regulations
The delay occurred in part because 2014 was an election year, Chief Cabinet Secretary Yoshihide Suga said on Thursday. “We are doing this for the first time, so there was some coordination,” Suga said. “Anyway, at last, it will start next month. It is our responsibility to create a system that can be widely used.” Overregulation risks stifling the project, according to Yuki Takahashi, a founder of Tokyo-based housekeeping company Bears KK, which also plans to employ a handful of staff from the Philippines. “If the regulations aren’t relaxed, this will be a loss-making venture for the companies concerned,” Takahashi said. “Japanese housekeepers don’t need qualifications—if someone is of good character, we can hire and train them. Why can’t we do the same with the foreign workers?” While maids are commonplace in Asian cities, such as Singapore and Hong Kong, outsourcing chores has largely been the preserve of the rich in Japan—one reason many women have to give up their careers after giving birth. While the ratio of women in work has risen to about 50 percent, from 48 percent, when Abe came to power in 2012, many hold poorly paid part-time positions. Pasona will price its cleaning services at ¥5,000 ($43) for two hours, making them affordable for many dual-income households.
Maid shortage
Japanese citizens currently aren’t allowed to employ foreign maids. A small number of “highly skilled” expatriates are allowed to bring foreign housekeepers into Japan, with about 1,000 such domestic workers living in the country as of June last year. This compares with about 300,000 in Hong Kong, whose total population is about half that of Tokyo alone.
While the number of foreign workers in Japan doubled to a record of 908,000 between 2008 and 2015, many are employed in manufacturing, where they have relatively little contact with the native population. Net migration was just under 100,000 people in 2015—the highest in 14 years. Complex regulations could also hamper a fresh attempt to bring in more foreign elderly-care workers. The health ministry projects a potential deficit of 377,000 workers by 2025—prompting the government to expand a controversial “trainee” program for foreigners that critics say has conditions tantamount to forced labor. Still, Miyoko Miyazawa, an adviser at Eisei hospital in the Tokyo suburb of Hachioji, who supervises its use of foreign workers, said Japan has no option but to use the trainee system to accept more overseas caregivers. “The labor shortage is really becoming serious,”
she said. “Some facilities can’t even open for a lack of staff.” Among her success stories is John Denmark Pineda, a 31-year-old nurse. He came to Japan from Manila in 2009 and is now a popular staff member at the hospital, chatting to elderly patients in a mixture of Japanese and English. Strict regulations mean that only about 2,600 nurses and caregivers from Southeast Asia are working in Japan. Pineda, now married to a Japanese citizen and aiming to pass the country’s notoriously difficult nursing qualification, said that migrant workers should be allowed to play a bigger role. “It might sound cheeky, but we foreigners are very keen and hardworking,” he said. “If more want to come, I think they should be accepted.” Bloomberg News
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BusinessMirror
Saturday, January 7, 2017 A5
WELL-RESTED KATROPA TAKE ON YENG’S NLEX T
NT Katropa aims to go full throttle against its underachieving sister team NLEX, as the Philippine Basketball Association Philippine Cup travels north to the Angeles University Foundation Gym in Angeles City, Pampanga, on Saturday. The second-running Katropa (four wins, one loss) are coming off a twoweek holiday break when they clash with the cellar-dwelling Road Warriors (1-5) in the lone match at 5 p.m. “The big picture for us is the day-to-day improvement,” said new TNT Head Coach Nash Racela, who will try to break loose from a tie with Rain or Shine at the No.1 spot and stay on course for a twice-to-beat advantage in the playoffs. Katropa sophomore forward Troy Rosario scattered 26 points to help scalp Alaska, 109-100, in their last match that snapped the Aces’ three-game winning streak. Jayson Castro and Larry Fonacier each had 16 points, while Ranidel de Ocampo added 10 to lead TNT’s balanced attack. The Road Warriors, on the other hand, could still not get the team chemistry their new coach Yeng Guiao wanted. NLEX lost to Guiao’s former team Rain or Shine (107-97) and San Miguel Beer (104-80) in their last two assignments last year.
Ramon Rafael Bonilla
TNT Katropa’s Troy Rosario waxes hot against the Alaska Aces.
Bowlers Chua, Sy honored
INTERNALLY displaced girls, in Jeyang village camp right across from China border, join the karate training for self-defense in Kachin state. AP
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By Esther Htusan The Associated Press
E YANG, Myanmar—Every afternoon, dozens of teenage girls at the school for displaced children line up on the grounds, dressed in white uniforms with belts of various colors: yellow, blue, white. They kick high and jump with glee before settling into their exercises, shouting in Japanese as they punch into the air. The reason many of these girls are in this class is sobering: They want protection from their own country’s military. Mostly between 13 and 16, they have lost their homes, and in some cases their families, to the longrunning civil war in Myanmar’s Kachin state—a war in which soldiers have been repeatedly accused of raping girls and women, but rarely prosecuted. This karate class offers some small sense of power to the vulnerable. “For all the girls, we teach them how to protect themselves when someone tries to sexually assault them and how to fight back,” instructor Hkun Naw said. “Basically teaching the girls to make themselves safe. “We wanted to make sure all the internally displaced children have the right to do something that gives them joy, and to be confident.” More than 100,000 people in Kachin state, in Myanmar’s north, have been forced from their homes by fighting between government troops and ethnic Kachin rebels who have sought greater autonomy for decades. A 17-year-long cease-fire ended in 2011. Je Yang is among the most crowded camps, with more than 8,000 people, including 16-year-old Hkawn Ra. She fled fighting in her village of Man Dung while she was at school five years ago, when she was 11. She has not seen her parents since. She once dreamed of becoming a nurse, but no longer. “Because of the political situation and civil war, I cannot become who I want to be, and I am not angry about it anymore,” she said. Hkawn Ra is, however, learning karate, after hearing about rapes and sexual violence against women in the region. A community-based organization operating under the Kachin Independence Organization has held karate classes in Kachin-controlled areas since the year the cease-fire ended, seeking to teach girls and boys selfdefense and self-confidence. “They [the military] rape women and that’s why I was interested, and decided to learn karate to protect myself at least,” Hkawn Ra said. Women organizations say the military has been long using rape as weapon of war. The Women’s
League of Burma says it has documented more than 100 cases of rape and sexual violence against ethnic women by the military army since 2010. The government and the military have remained largely silent on the issue. This fall, Muslim Rohingya and rights groups have said soldiers and police have repeatedly raped members of the ethnic minority in northwestern Rakhine state. Authorities have been conducting sweeps of the region since October, when nine border guards were killed by unknown attackers. The government has blocked foreign media from the area, but Rohingya who fled to nearby Bangladesh report rapes and murders by security forces, and satellite images back up their claims of village-burning. At a recent press conference, military spokesman Soe Naing Oo denied that soldiers in Rakhine were committing any human-rights violations or sexual violence. The Kachin Women’s Association of Thailand and the Legal Aid Network last year released a report on investigators’ lack of progress in the brutal 2015 rape and murder of the two Kachin volunteer teachers. Dozens of soldiers were housed closed to the rape scene, and several left shortly before the bodies were discovered, but no suspects have been identified. Prosecutions have been few. In 2014 a soldier was sentenced to seven years in prison for raping a 7-year-old Kachin girl in northern Shan state. Accused Myanmar soldiers normally face a military tribunal, but in that case lawyers successfully pressed for a civilian trial. Ethnic minorities overwhelmingly voted for Aung San Suu Kyi’s National League for Democracy last year, helping it replace an elected but military-dominated government. But many are now disappointed with her government’s efforts to resolve a host of ethnic conflicts and what they see as the military’s impunity. “Without talking about human-rights violations and ignoring the truth and justice for the victims, there won’t be a real peace and national reconciliation in our country,” said Julia Marip, secretary of the Women’s League of Burma. With little confidence that soldiers will be held to account for misdeeds, the girls in the karate class hope to at least deter them from committing any to begin with. They compete with each other, and some have dreams of fighting professionally. “Our instructor said we can go abroad to learn more skills, and I want to go overseas and be a professional fighter,” said 14-year-old Nu Ja. “When they know how to defend themselves,” said Hkun Naw, the instructor, “they will be able to protect their families, their people and their country.”
P
HILIPPINE Bowling Federation (PBF) team members Kenneth Chua and Alexis Sy were named 2016 Bowlers of the Year during Team Prima’s annual athletes recognition night at the V Corporate Centre in Makati City recently. Chua, 25, became a back-to-back winner after winning various national competitions last year. It was his third Male Bowler of the Year award since winning his first in 2013. Chua recently topped the PBF National Open early last month and the SCTBA Open Masters tournament this year. Sy, on the other hand, won the Tenpin Bowling Association of Makati’s third quarterly mixed ladies title last August and mixed ladies crown last December. “The award is like receiving a Christmas present,” Sy said. “It was unexpected for me. Last year has been tough for me, but I’m very glad that I was able to catch up and win the award. Above all, I thank the Lord for His blessings.” Bill Yambao and RJoy Daval Santos were named Junior Bowlers of the Year, while Daphne Custodio copped the Most Improved Female Bowler award and her brother, Marc Custodio, took the trophy in the men’s side. Xyrra Cabusas and Aui Padawan were also declared the top male and female bowlers, respectively, for Cebu. The annual awards night also recognized Ivan Malig, Richard Poblete, Paolo Valdez, Biboy Rivera, Kenzo Umali, Joseph Javellana, Aui Padawan, Ronald Arkoncel, Kenneth Chua and Ren Cremen for scoring perfect games in 2016. In badminton, Gregg Paz repeated as top male player of the year and so did Aires Montilla as the best female player of 2016. Andrea Abalos won the female junior badminton player trophy and Pingkoy Salvado earned his second straight junior title.
Donayre motivated vs Indon
W
HEN Vaughn Donayre directed his career path to One Championship nearly three years ago, he was once touted as a promising Filipino talent from Cebu. However, the luster of his billing as a topnotch prospect slowly faded when a string of setbacks came his way. The 37-year-old Cebuano suffered a first-round submission defeat to Emirati combatant Mohammed Walidin in his August 2014 promotional debut. Donayre encountered the same fate in his second One Championship outing, as he tasted a first-round stoppage loss to Malaysian superstar Peter Davis in October 2014. It was followed by falling short in a thrilling lightweight showcase against former One Featherweight World Champion Honorio Banario last April. A victory under the One Championship umbrella CEBU’S Vaughn Donayre wants to boost a fading career.
remained elusive for Donayre as he yielded to Singaporean sensation Amir Khan via third-round submission this past November. Determined to break his four-fight losing skid in Asia’s largest mixed martial arts organization, Donayre chose not to wallow over his recent defeat as he jumps right back into action by squaring off with Dutch-Indonesian kickboxer Vincent Latoel. Both men are set to collide on the undercard of One: Quest For Power, which takes place at the Jakarta Convention Center in Jakarta, Indonesia, on January14. With the ambition to insert his name into the winner’s column and regain his reputation as one of the Philippines’s best lightweight fighters, Donayre revealed that he asked One Championship’s top brass for an immediate return to the cage. “It’s not surprising that I have this fight. I asked for another fight immediately right after the bout against Amir Khan in November. Even if I win or lose, I will fight again anytime,” Donayre said.
A6 Saturday, January 7, 2017
B y Mike Besa
Images of Manila Southwoods by Marty Ilagan
The 11th hole on the Masters Course
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n the first part of the process of divining the golf course of the year, we first discussed the criteria by which the choice would be made. The criteria dealt with the golfing experience only; service and the other facilities of the club were of no consequence. Then we named what we felt were the four courses most deserving of the distinction and they are, in alphabetical order: n Anvaya Cove Golf and Sports Club—The centerpiece of Ayala Land Premier’s portfolio is a charming mountain/seaside track that clambers up and down the mountains of Morong, Bataan. It’s an enjoyable track that offers spectacular views of the bay. n Hacienda Luisita Golf and Country Club—A gem. A Robert Trent Jones Sr. design; the only one in Asia. Recently acquired by Martin Lorenzo, the golf course has blossomed under his watch. The work on the course has been threefold. The condition of the golf course was priority one. Then focus shifted to the original look and feel of the golf course and finding a bit more length to make it more resistant to scoring. It’s a classic parkland layout. n Manila Southwoods Golf and Country Club Masters Course—The Masters is a Jack Nicklaus masterpiece. Looking at it now, you’d be hard-pressed to remember the property as a former rice field. This is a design that’s been tested against the best in the world and it has held its own. n Wack Wack Golf and Country Club East Course—The beast. One of the most difficult tracks in the country, the East Course is the home of the Philippine Open. The par-3 eighth hole is possibly the most difficult in Asia. The resistance to scoring here is off the charts. Anvaya is the newest kid on the block and it’s a knockout. It’s the first of the new breed of golf course that uses as much endemic flora as it can to reduce its carbon footprint. Only the greens and a few ornamentals are not native to the Philippines. If it has one flaw (and we are nitpicking here), it’s that the 10th isn’t quite up to the standard of the other holes. Luisita has made giant strides in the last two years. The course is gorgeous and demands the golfer have command of his golf ball to score. The move to restore the original look of the course is an unqualified success. Luisita isn’t as resistant to scoring as it once was (although this is currently being addressed), and its conditioning isn’t quite up to the standard of the others on this list. Wack Wack’s East Course is a brute of a golf course and the winner of Golf Digest’s architectural award last year. It is a heritage course and a model of sustainability. It did have some issues with its greens this year and that took away points for conditioning. The club was quick to address the issue and by the end of the first quarter of next year, the greens should be back to normal. Which leaves us with Manila Southwoods Masters Course. Try as we
Golf Course of the year
might, we could find no flaws. It is a course that truly appeals to golfers of all handicaps (provided you play the appropriate set of tees). Played in summer in windy conditions, there are few courses that are tougher. It is always in superb condition but John Cope, VP of Grounds at Southwoods, seems to have found another gear this year because the greens are simply fabulous. The Masters is a sophisticated course. It might be tough but it’s also subtle and it is in the manner that these subtleties are dealt with that yields a good score. The Masters was the unanimous choice of our panel and a worthy winner of the BusinessMirror Golf’s Golf Course of the Year. Based on our discussions, the Masters was the most balanced design. Nicklaus seemed to use the prevailing wind as a primary defense for par. The Masters Course twists and turns into the wind; the wind’s
impact is different on each and must be accounted for while deciding which club to hit and where to place the ball. All the greens sit at angles to the fairway, which puts tremendous pressure on the shot into the green. Distance control and direction are of paramount importance here. The bunkering is sublime and the ones that see the most play are extremely well-conditioned. The greens themselves are relatively small, adding to the degree of difficulty they present. Once on, though, they roll fast and true and will reward a well-struck approach. The golf course is beautiful. Southwoods Chairman Robert John Sobrepeña and his team planted a veritable forest and was one of the first golf courses in the country to apply for and receive Audobon certification as a wildlife sanctuary. Each hole is beautifully laid out and picture-perfect. Each could be the course’s signature hole,
XXIO Prime and Forged irons M ost equipment manufacturers design their golf clubs for the better golfer, then reverse engineer them for the average Juan. XXIO takes a different road; its clubs are specifically designed for the amateur golfer, specifically the distance-challenged amateur who’s looking to eke out that extra bit of clubhead speed in the never-ending quest for distance. The XXIO Prime line of golf clubs is its lightest yet, and is designed for the golfers who are most challenged in this regard. To accomplish this, XXIO engineers focused on making the clubs lighter while improving the repulsion characteristics of the clubheads. A lighter, stronger titanium alloy was specified for the driver. The lighter crown facilitated the weight reduction and freed up some discretionary weight that was repositioned low and deep in the clubhead to optimize the clubhead’s center of gravity for improved launch conditions. The Wing Cup Face, which was developed for the XXIO 9 series, has expanded the thin, high COR center toward the toe and heel. Working in conjunction with the newly developed
sole groove structure, the Wing Cup Face improves the response of hits in this area, which provides greater forgiveness. A longer shaft with less weight that creates faster head speed, greater playability and a powerful draw bias was developed for the new clubhead. The newly developed shaft is 46 inches and less than 40 grams, which is 0.25 inch longer and 2 grams lighter than the previous model. The R2 and R flex shafts weigh in at a svelte 36 grams. The fairway metals employ the same performance strategies in their design briefs; the lighter head weights, enhanced cup face and ultralight shafts are both in play here. The utility clubs use a forged cup face plasma-welded to a highprecision cast head with lightweight shafts. The iron heads are manufactured of a cast SUS630 steel alloy head with thin, high-repulsion titanium faces. Weight
but in our considered opinion, that honor belongs to the 10th hole. Ten is a long, majestic par four. A creek begins from the right side of the tee box, bisects fairway, then runs up the left side where it empties into a small pond that defends the green. The green sits at an angle to the fairway and provides a tantalizingly small target for the approach shot. Par here is a very good score. You can’t ask more from the closing corner and the 18th, in particular, has figured in some truly epic battles over the years. This year, the Masters Course is as close to perfect as a golf course gets, and we’re happy to bestow our highest esteem on it. Congratulations then to the management and staff of the Manila Southwoods Golf and Country Club for the work and passion that you put into caring for the best golf course in the land.
and management of the center of gravity is accomplished with tungsten-nickel weights of varying densities. The long irons have tungsten-nickel weights of both densities, mid-irons do without the high-density weights and the wedges are made exclusively with cast SUS630 steel. The weights lower the center of gravity significantly, making it easier than ever to get the golf ball in the air. Stronger lofts are employed to keep the flight trajectories with each iron at familiar levels but the main benefit is how strong each iron becomes. Each iron is finished with a 47-gram SP-900 carbon shaft and a lightweight XXIO grip in keeping with the requirements of the target market. XXIO field tested the new Prime line with a sample of their target golfers and report distance increases of up to 5 yards.
An aerial view of the 10th hole on the Masters Course
That might not sound like a lot for most golfers but when a golfer has a swing speed of about 70 miles per hour, 5-yard counts for quite a bit.
XXIO Forged irons
For the slower swinger who hasn’t lost that much clubhead speed and values the soft feel of a fine forged iron, XXIO has just the thing for you. The XXIO Forged irons combine a high-strength, ultra-thin steel face with a forged mild carbon steel clubhead. The face yields impressive repulsion properties, while the forged chassis imparts a very soft feeling at impact. The XXIO Forged irons utilize a variation of the “Tour V.T. Sole”, which has been very well received by golfers everywhere on Srixon Z-Series irons. The V design on the sole, coupled with an increase in bounce, allows the clubhead to cut cleanly through the turf as the golfer hits down on the ball. These irons promote consistent ball speed and distance, allowing users to take dead aim. The faces of each iron are thinner toward the heel and toe, which keeps ball speeds high on off-center hits and increases forgiveness. Center hits fully activate the face’s potential and give the golfer more distance than similar irons from other manufacturers. New shafts of steel and graphite were developed specifically for the XXIO forged irons. Both offerings have higher balance points for improved feel and accuracy. Both are softer on the butt-end of the
shaft and stiffer at the tip and were and accuracy. Both lightweight stee slightly weightier as befits the golfe
e specified to enhance performance el and graphite offerings are er in this segment.
www.pinoygolfer.com
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Saturday, January 7, 2017 A7
TOURISM Assistant Secretary Frederick M. Alegre addresses the council. PHOTOS BY MIKE BESA
The Philippine Golf Tourism Council Updates
A roundtable and night golf T
he Philippine Golf Tourism Council met for a roundtable on the state of the industry last December 22 at Club Intramuros in the Walled City. It was the first meeting with all the stakeholders in attendance. Previous meetings were one-onone affairs with members of the council with the various stakeholders. Present were members of the Golf Managers League of the Philippines, travel agency operators, members of the media and Tourism Promotions Board (TPB) COO Cesar Montano. Tourism Assistant Secretary Frederick M. Alegre first addressed the council. Then representatives of the Golf Managers League and the tour operators took the podium to air their concerns. Both parties discussed the same concerns; the costs related to keeping
golf tourism in the Philippines competitive with the rest of our Asian neighbors. The golf managers’ concerns were that the cost of the local hotel rooms are much higher than other markets, while the tour operators’ concerns stemmed from the tourist rates the golf clubs were charging to date were too high. The operators cited the need to have tourists accompanied by a member as another hindrance to the industry’s development. Connie Mamaril of Regent Travel, speaking for the tour operators, assured the golf managers that they would be able to negotiate preferential rates with the hotels for inbound golf tourists and that the country would be competitive as long as the golf clubs would charge reasonable rates. For their part, the golf managers committed to reducing the rates for inbound
golf tourists to the levels of those of club guests accompanied by a member and were willing to waive the need to have tourists accompanied by members. This compromise should give the tour operators a suitable margin with which to work and should make the Philippines a viable destination for the international market. Montano then took the podium to encourage the parties to keep working together for the betterment and growth of the industry. He pledged his and the TPB’s full support for the council, the stakeholders and their efforts to grow the industry and put the Philippines on the map for golf tourists worldwide. This day also marked the return of night golf at Club Intramuros, which had been shelved by the previous administration.
TPB COO Cesar Montano pledging his full support for the council’s efforts
After the discussions and some refreshments, members of the council took to the golf course to survey the golf course. Spirits were high after the round and at a simple dinner at one of the club’s function rooms, Montano reiterated his support for the council’s efforts and pledged to use all the powers of his office to enable the industry to succeed. As the mood of the industry starts to shift to the positive, all involved these are still early days for the industry and that there is still much to be done. But with the stakeholders working together with the support of the Department of Tourism and the TPB chances are good that the industry will prosper and grow. Mike Besa
Night golf is back at Club Intramuros
XXIO’s excellent quality and world-class execution make its irons a front-runner in the highly competitive premium executive golf club market.
The spirit of the game
Honesty, integrity, courtesy: three words that have come to represent the spirit in which the game of golf is played. Part of that spirit sits beneath the term, etiquette and part of it relates to the Rules of Golf. But the spirit of the game goes much deeper than just those two tangible terms. It is something that every golfer should develop an innate sense of, something that is born of golf’s unparalleled history, and something which lifts golf, one could argue, above other sports. Whether it’s through divot and pitch-mark repair, or simply through silence on the tee, the spirit of the game dictates that players make sure they give others on the course, often opponents, a fair chance to play the best shot they can. For most of us, the game of golf is selfregulating. There is seldom a referee present so we are reliant upon our own honest adherence to the rules in order to enjoy the
game. As a result, we are all occasionally forced to call a penalty on ourselves for infringements which, often, will go unnoticed by everyone else. It is this dependency upon honesty and courtesy that has elevated integrity to sacrosanct status. Without them, we may as well hang up our clubs.
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f only we lived our lives to this standard the possibilities of our society would be limitless. But many of us can’t even play a simple game by the rules and the spirit that governs them to our shame. Our eternal shame. Yes, we’re talking about cheating at golf. This dishonesty takes many forms. For some it’s sandbagging, which is really a polite way of saying one cheats on his handicap. For others, it’s far more overt and ranges from improving the way the ball lies to recording a false score on the scorecard. Whatever form it takes matters not. Cheating is a despicable act that needs to be eradicated from our sport.
How many times have we borne witness to such atrocities and done nothing? How many times do we turn the other way when a friend fudges on the rules? If we do, then we bear just as much guilt as the perpetrator. As the great parliamentarian Edmund Burke said, “The only thing necessary for the triumph of evil is for good men to do nothing.” Golf is played, for the most part, without the supervision of a referee or umpire. The game relies on the integrity of the individual to show consideration for other players and to abide by the rules. Since we regulate ourselves, then it is our duty to speak up when the rules are violated. This is what rules officials call protecting the field. We can call it looking out for each other; having each other’s backs. If you’re in a tournament, you don’t have to confront the individual. Simply refuse to sign his or her scorecard and let the tournament committee know why you did so. Let them deal with the perpetrator. You will have done your duty.
I’m not suggesting we all turn into rules Nazis. If you’re out on the course practicing, then by all means, practice. If you’re in a social situation, then a quick side remark will suffice. If you’re with someone who honestly doesn’t know the rules, then enlighten them. No need to walk out or create a scene. Take the golfer aside and explain to him/her what the problem is and then offer the appropriate course of action. Be their rules official for the day. Share what you know. But in tournament golf, even if it’s just a fun tournament, we must do something. Cheating only succeeds because we turn a blind eye to it. If you do, then you’re complicit and are part of the problem. If no one stands with them, then the chances are that they’ll cease and desist. Taking the easy way out is the wrong thing to do. We must take a stand. Let’s make this a resolution for this new year; let’s take a stand against cheating on the golf course. Do your part and I’ll do mine. I’ve got your back. Mike Besa
OurTime BusinessMirror
A8 Saturday, January 7, 2017 • Editor: Efleda P. Campos
news@businessmirror.com.ph
DOJ endorses 134 inmates for executive-clemency grant
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USTICE Secretary Vitaliano N. Aguirre II said on Tuesday he recommended to President Duterte the granting of executive clemency to 134 inmates.
BABIES ON A BICYCLE
An elderly Hanoi woman balances her greatgrandchildren on the front and the back of her bicycle while negotiating the busy streets of her village in Duonglam, Vietnam. MAU VICTA
In a news conference, Aguirre said the list of the inmates came from the New Bilibid Prison (NBP) in Muntinlupa City, the Correctional Institute for Women in Mandaluyong City and other penal colonies operated by the Bureau of Corrections. The list was already submitted to Malacañang two weeks ago, Aguirre said. “I already sent messages to President Duterte and Special Assistant to the President [Christopher] Bong
Go to expedite action on our recommendation,” Aguirre said. Executive clemency is a power of the President to pardon any prisoner, provided for under Article VII, Section 19 of the Constitution, and pertains to reprieve, absolute or conditional pardon with or without parole conditions and commutation of sentence. Parole is the conditional release of a prisoner from a correctional institution after he or she has served the minimum of his or her sentence.
The DOJ chief defended why the recommendation has yet to be acted upon by Malacañang, adding the President has a lot of things to work on. “Maaaring natambakan ang rekomendasyon sa dami ng trabaho ng Pangulo,” he said, adding he is confident Duterte will approve the recommendation, since the move was in line with his promise to free inmates aged at least 80, and those who have spent at least 40 years behind bars. Aguirre said the list he submitted to the President included elderly and sickly inmates. The list included 100 inmates recommended for commutation of sentences, 14 for conditional pardon with parole, 18 for conditional pardon without parole and two for absolute pardon. The justice secretary said he made the recommendations for presidential pardon upon endorsement by the Board of Pardons and Parole (BPP),
after review of the eligibility of the inmates on the list. Aguirre, however, said he could not recall if the list included political prisoners whom the National Democratic Front (NDF) have asked to be released. The NDF, currently engaged in peace talks with the government to end the long-running armed conflict in the country, is seeking the release of all political prisoners. But Aguirre said there was no prominent inmate on the list. Last November Duterte granted pardon to actor Robin Padilla, after he was among those recommended by the BPP for executive clemency. Padilla—Robinhood Ferdinand Cariño Padilla in real life—is a known supporter of Duterte. He applied for absolute pardon for his 1994 conviction for illegal possession of firearms, where he was sentenced with up to 21 years in prison. PNA
₧277,500 in social pension released to senior citizens in Bacolod City
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ACOLOD CITY—A total of P277,500 in social pension was released by the Department of Social Welfare and Development-Negros Island Region (DSWD-NIR) to 185 senior citizens in this city on Wednesday. Each senior citizen received P1,500, representing the amount for the last quarter, during the turnover rites held at the Bacolod City Government Center facilitated in by the City Department of Social Services and Development. Indigent senior citizens shall be entitled to a monthly stipend amounting to P500, as provided in the Expanded Senior Citizens Act of 2010, or “An Act to Maximize the Contribution of Senior Citizens to nation-building, Grant Benefits And Special Privileges and for Other Purposes.” The amount is intended to augment the daily subsistence and other medical needs of senior citizens. Based on the needs of senior citizens, the DSWD has been expanding the program yearly. For 2016, indigents 60 years old and above who meet the criteria can already benefit from the program. Qualified to receive monthly pension are seniors who are frail, sickly, or with disability, without pension from Government Service Insurance System, Social Security System, Armed Forces and Police Mutual Benefit Association Inc., and other insurance companies and without any permanent source of income or regular support from his or her relatives. PNA
ROAST MASTER
Roger Confieso, 68, of the popular Roger’s Lechon in Barangay Patul, Santiago City, Isabela, points to young Nonie what size he prefers among roast-ready native hogs for the New Year’s Day celebration. Dubbed by patrons as lechon master, Confieso says he maintains the quality of his lechon by using only native pig for his trade. He claims the skin of the native pig can remain crunchy the whole day, unlike the hybrid ones, which easily wilt in a few hours. LEONARDO PERANTE II
Elderly poverty in Seoul turns seniors to subway silver couriers C HO YONG-MO ON, 75, spends nine hours a day, five days a week using his free pass on the Seoul subway to shuttle parcels back and forth between clothing and jewelry stores. With pension payments falling short of living costs for many of the elderly, he’s among a growing number of senior citizens seen trekking in and out of metro stations in the South Korean capital carrying boxes for “silver service” courier businesses. “This job isn’t easy, especially when I’m walking up the subway stairs carrying heavy stuff,” said Cho, who earns about 500,000 won [$430] a month, which is about half what he and his wife need to live on. “There are limited seats for the elderly in the Seoul subways, and I often have to stand for hours.” Korea’s national pension wasn’t established until 1988, and Cho only contributed enough into the system to now get 600,000 won per month. His predicament underscores the demographic chal-
lenges faced by the nation as the economic growth-rate declines and the society ages. It’s also a lesson for other countries, including its bigger neighbor China, where pension offerings vary greatly among industries and many provincial funds are currently in deficit. “The challenges are magnified for north Asia due to the sheer speed and scale of the demographic change sweeping across the region,” said Donghyun Park, principal economist at the Asia Development Bank in Manila. “The demographic bonus which contributed substantially to the region’s growth in the past has already turned into a demographic tax.” Park sees rising poverty among the elderly as potentially the biggest socioeconomic risk to the region. Because seniority and pay at Korean companies are typically based on age, many workers get pushed out in their mid- to late-50s before they have saved enough to retire. Multigenerational families in which the elderly live with their children
and grandchildren are also in decline, leaving millions of seniors without an adequate safety net. Korea has the worst elderlypoverty rate of any country in the Organization for Economic Cooperation and Development. The OECD estimated the true age at which Koreans withdraw from the labor force was 73 for men and 71 for women in 2014. “Companies need to change their culture of raising compensation based on seniority, which is one reason they are reluctant to hold on to elderly workers,” said Shin Kwan-ho, a professor of economics at Korea University in Seoul. “The elderly are healthier now and seniors can also help make up for the decline in the young working-age population.” Yet, options for the seniors trying to start over in the job market are limited, and some are pushed from the top of the wage scale to the bottom. Free travel on the metro, an entitlement for people who are 65 and over, is a key edge for many
in the employment market. The Seoul metropolitan government’s Golden Job center, which helps the elderly brush up on their skills, focuses training for roles such as couriers, parking lot attendants, apartment janitors and librarians. HM Cho, a 63-year-old who worked for 25 years at some of Korea’s biggest conglomerates, was among those taking courses at Golden Job earlier this month. He’s looking to broaden his skills in case he loses the job he got as an intern at a small machinery supplier. Cho said he got the intern position after offering to work for 25 percent less than the 2-millionwon monthly salary advertised by the company. About 44 percent of people age 55 to 79 are recipients of public or private pensions, the statistics office said. The average monthly payment is 510,000 won, with some people who contributed into private schemes receiving a lot more while about half of recipients getting less than 250,000 won,
government data show. Silver services have also popped up across Japan, where about a third of the population is over 60 and the government is gradually raising the age for eligibility for pensions to 65. Some of the elderly in Japan also keeping working out of necessity, but the poverty rate for seniors is far lower than Korea, and many work part time to supplement pensions or simply to keep active. About 19 percent of China’s population will over 60 by 2020, and almost 39 percent by 2050, Human Resources and Social Security Minister Yin Weimin said last year. While China has some time to prepare, there is much to be done given the patchy state of pension schemes, and the erosion of extended family structures due to decades of the one-child policy. A survey of middle-income households in Korea found that most estimate their living costs after retirement will be more than
double what they expect to receive from the national pension. The survey last month by NH Investment & Securities Co., which polled 1,025 households, found that 96 percent of respondents intend to continue working after official retirement to supplement public and private pension income. From next year, Korea will have more people age 65 or above than children 14 or below, according to government projections. That means a future with a lot more seniors shuffling through Seoul’s subways carrying packages for silver services. Cho Won-dae, 84, who’s been at it for a decade, said his advice to others is: “Forget about what your past job was.” “It’s better to make some money, no matter how little,” said Cho, who earns about 1 million won a month. “My son’s friend once saw me eating snacks at the subway, but I wasn’t embarrassed at all. You have to be proud of what you’re doing now.” Blooomberg View
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The Millennials BusinessMirror
Saturday, January 7, 2017
A9
Young Pinoy savant defends economics S Story & photo by Rizal Raoul Reyes
nating questions in Philippine economics. Contrary to popular thinking, there’s no single theory that suits any one country best. Instead, economics works best when you exploit the diversity and variety of theories and models out there. One of the most important debates for the Philippines is which sector to promote more in the future: industrial growth or services growth? Across the globe, the typical story of development is that a country moves from being predominantly agricultural to being predominantly industrial (manufacturing-centric). Later on, countries become dominated by services, such as banking, telecoms and trade. In this part of the world the Philippines is one of the countries which “leapfrogged” or skipped manufacturing and and jumped right into services. In other words, we have deindustrialized prematurely, and recent research shows that many other countries are experiencing the same divergent path. Should we maintain the momentum of services growth or should we revive manufacturing as time-tested ladder to faster growth? These issues are far from resolved, though right now I am inclined to favor the former view rather than the latter.
@brownindio
OME find economics a “dismal science”. They do not include Jan Carlo Punongbayan.
Punongbayan, 27, finds economics a very fascinating subject with lots of questions he said are asked for a lifetime. Being passionate on economics is manifested on his achievements. He finished summa cum laude and valedictorian when he acquired an economics degree from the University of the Philippines [UP]. Punongbayan, currently gunning for a doctor of philosophy degree, also worked as a senior lecturer in UP and research assistant at the World Bank. In an e-mail interview with the BusinessMirror, Punongbayan shares his thoughts on the various facets of economics.
How do you react when people tell you that Economics is a “dismal science”?
The phrase dismal science has a fascinating origin. It came from Thomas Carlyle, a Scottish writer and philosopher who in 1849 advocated the reestablishment of slavery in the West Indies. Carlyle justified this stance using arguments in disparate fields of study, but he could not find any in the field of economics. Instead, he found that the field often prescribed “leaving people to their own devices” and minimal intervention from government. Since these did not advance his cause, Carlyle bitterly attacked economics and called it “dismal”. Therefore, I’m not really bothered when people call economics a dismal science. It’s only derogatory to those who don’t know yet the phrase’s origin.
What made you pursue a degree in economics and a career as an economist?
Both my parents are practicing lawyers, and an economics degree was originally meant to be a prelaw for me. Indeed, after graduating from the UP School of Economics in 2009, I went straight into UP Law. But after a year I found that I was not enjoying it very much [although I did make wonderful friends there]. To make the long story short, I missed data crunching and the economic way of thinking. Of course, law and economics now have some considerable overlaps, but I still missed doing original research and investigating economic questions, especially about Philippine development issues. I decided to leave law school in 2010 and went back to be a research assistant to UP professors. Since then I never left economics again. After obtaining my master’s degree [2013], I’ve alternated work in academe, the government and the development sector. I find that there are enough interesting questions in this field to last me a lifetime.
You have a solid science background in science back in high school. Since economics also deals a lot with numbers, did you think back then that Economics was going to be an exciting course for you?
My favorite subjects back in my QueSci [Quezon City Science High
School] days were physics and astronomy. Later, I realized just how many economics concepts were inspired by, analogous to, or drawn directly from physics. Today many continue to accuse economists of having “physics envy,” since economists often construct models of the economy like how physicists and other natural scientists develop theories about the natural world. But economists often struggle at this because they deal with human behavior, rather than the behavior of, say, atoms or animals. In the words of physics Nobel laureate Murray Gell-Mann, “Imagine how hard physics would be if atoms could think.” [For] me, that’s what makes economics all the more beautiful and interesting as an intellectual pursuit.
To be a good economist, is it necessary to have above-average abilities in mathematics? Many people are often surprised at how mathematical economics could get. The level of mathematics in economics education increases exponentially from high school, college, to graduate education. This seeming obsession with math comes from a wave of “mathematization” that started in the 1940s. Ever since, the use of math in economics has only become deeper and more widespread. Is this generally good? On the one hand, the use of mathematics is a neat way of presenting theories systematically. Also, estimates of economic relationships can only be derived by using mathematical and statistical techniques. On the other hand, many theories and models can easily become abstruse to the point of being largely removed from reality. Most important, when economists talk in terms of mathematics, it hinders them from communicating their ideas to the broader public. This somehow diminishes economists’ relevance to societal discussions, no matter how useful or interesting their insights are. Nor are there enough incentives for them to reach out to the public: economists often write for each other in the form of seminars and journal articles, since these activities are key for promotion and tenure tracks. As in many other fields, this is one area that needs rethinking, especially in light of modern and digital ways of propagating knowledge and information.
What economic theories excite you?
As one economist said, economic theories and models are best treated as fables: their primary purpose is to highlight stories from which we can draw lessons. And some of the theories I love teaching the most are those in microeconomics and development economics. In microeconomics, consumerchoice theory, comparative advantage and game theory are all fun to teach and have widespread applications, which students can easily
Who are your favorite economists?
Punongbayan
relate to. These theories highlight the fact that learning just a few economics models can go a long way in understanding many social phenomena in the real world. In development economics, I’m drawn to theories explaining why some countries are richer than others. My current research dwells on the idea of “structural transformation,” or an economy’s evolution from agriculture, manufacturing, to services. For instance, what does the rise of tradable services [e.g., BPOs] mean for the trajectory of the Philippine economy? Is a “manufacturing renaissance” feasible and desirable? And what prevents the rapid growth of agricultural productivity? These are important questions which remain largely unresolved today, and are fertile areas of research.
In this knowledge-based economy, what are the prospects and potentials of the Philippines? Do you think the Philippines can achieve significant strides in economic development, considering that our digital infrastructure needs a lot of improvement?
The Philippines’s vast exposure to the internet and other digital technologies is changing not only the way we consume things [e.g., news, TV, music, e-commerce] but also the way we produce things [e.g., the growth of business-process outsourcings, ridesharing services like Uber]. But in all these, there’s a need to bridge the digital divide that remains in the Philippines. Thankfully, such divide is not as large as in other countries. For instance, Internet access is broad-based, especially among the youth, and nearly half the population have Facebook accounts.
But to further expand access, we need to invest more in our telecom infrastructure and increase our broadband speeds to match those in our neighbors. Democratizing the Internet also necessitates lower prices. One critical way to bring about these reforms is by promoting more competition in the telecoms sector.
Economists, particularly those coming from the World Bank and IMF, are often blamed by people around the world for the so-called “antipeople” policies, especially during an economic crisis. What is your take on this issue? Over many decades there has been no shortage of criticisms of the World Bank and IMF, which are frequently derided for advancing the so-called Washington Consensus, or a set of 10 policies that developing countries “ought to” adopt in order to progress. Both these multilateral institutions have also been chided for conditioning their loans heavily unto governments’ adoption of these onesize-fits-all policies. But since the 1980s many changes have occurred that have transformed the role of these respective institutions. For instance, in contrast to the “laundry-list” approach of the Washington Consensus, many governments now employ the technique called “growth diagnostics”, which involves identifying key constraints to growth and development while considering the peculiarities and idiosyncrasies of the country in question. The World Bank is also now contending the fact that today’s developing countries are growing fast and catching up with developed nations. They are also finding alternative sources to finance
their development projects. Hence over time, the WB and IMF have found it necessary to adapt to the times.
As an economist, what is your stand on the view of the Opus Dei that a huge population is not a hindrance to attain economic development?
Indeed, a huge population is not a hindrance per se to economic development. The more people you have, the more innovators, scientists and geniuses a country can produce in absolute terms. Couples should be free to decide how many children to have. But the issue here is that couples precisely want fewer children than what they usually have. As the economy grows and people become more affluent, having more children becomes more expensive in the sense that it limits people’s ability to pursue their own endeavors as workers, professionals and entrepreneurs. And one way to improve the choices of couples, especially women, is to allow them to have greater control over their own fertility in the form of family planning and contraception. This is especially crucial for poorer women who have a high unmet demand for contraceptives and are, therefore, among those with the highest incidence of unintended pregnancies. The issue is more about freer choice, more than anything else.
Philippine economists have been debating what’s the most viable economic roadmap for the country to attain genuine development. Do you think the country is still searching for the ideal economic model for development? I find this one of the most fasci-
I look up to many economists here and abroad, either for their pathbreaking works or effectiveness as communicators. Among the economists long gone, I admire Adam Smith, Paul Samuelson and Milton Friedman. Among the older living economists, I admire Paul Krugman, Dani Rodrik and Greg Mankiw. Among the younger generation, I admire Daron Acemoglu, Steven Levitt and Esther Duflo. Among Filipino economists, I admire National Scientist Raul Fabella, Monetary Board Member Felipe Medalla, UP School of Economics Prof. Emmanuel de Dios and Philippine Competitive Commission Chairman Arsenio Balisacan.
Moving forward, do you plan to develop a Nobel Prize-caliber economic theory?
I’m not sure if my work will ever qualify to become Nobel-worthy. But to begin with, the odds are very slim (close to zero) since Nobel laureates typically come from the top universities in the West. Nevertheless, this Western bias shouldn’t prevent Asian economists from pushing forward their own views of how the world works. Filipino economists certainly have a lot of material from which to draw inspiration. More generally, one need not win the Nobel Prize to make solid contributions to both the economics profession and to society at large.
How did you find the movies The Big Short and A Beautiful Mind?
The Big Short was a good way of popularizing the concepts and financial instruments which drove the recent global financial crisis. But I liked A Beautiful Mind much more. I was in high school when it premiered, and throughout my years in QueSci they made us watch that film at least three times. John Nash was a fascinating figure, indeed: for instance, he won the Nobel Prize based on his PhD dissertation, which was just 26 pages long.
What events most shaped the US in your lifetime? A Pew survey tries to answer
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S divided as the US public may seem, there are still some things on which most people agree. No matter age, party or gender, Americans overwhelmingly believe that the terrorist attacks of September 11, 2001, played a dominant role in shaping the history of the country, according to a survey conducted by the Pew Research Center with A+E Networks’s History. When asked to name the events in
their lifetimes that had the greatest impact on the nation, 76 percent of people surveyed listed the attacks, far surpassing any other event, according to Pew, which conducted the survey of about 2,000 people, in part, to better understand the events that drive public discourse. “We don’t think so much about history, but we know that’s one of the things that impacts the way people feel
about any modern debate we’re having,” said Claudia Deane, vice president of research at Pew and lead author of a report on the study. September 11 came to mind most often, by a long-shot. President Barack Obama’s election followed distantly, with 40 percent including it on their list. The tech revolution was next, followed closely by the assassination of President John F. Kennedy and then the Vietnam War.
The survey found that Americans were primarily united by their age. “Like people, generations have distinctive identities that are linked, in part, to singular events that occurred during their members’ formative years,” Deane wrote with coauthors and Pew colleagues, Rich Morin and Maeve Duggan. While September 11 dominated each generation’s list, the other entries varied by age.
The “silent” and “greatest” generations, identified as Americans 71 and older, were united by the import they placed on World War II. For baby boomers—adults 52 to 70—it was the assassination of John F. Kennedy and the Vietnam War that unified them. Millennials and members of Generation X, the groups including those 18 to 51, were united in the importance they placed on Obama’s
election. Views on history differed by race, too. Black people were the only demographic group for which September 11’s primacy was challenged. About 3 in 5 blacks identified the attacks as having had an impact on the country, about the same share that cited Obama’s election. For whites and Hispanics, September 11 was first, by far, followed by Obama’s election. The New York Times
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BusinessMirror
Saturday, January 7, 2017
briefs
Globe-Smart interconnection made available in Bukidnon
GLOBE Telecom Inc. said interconnection with Smart Communications Inc. for fixed voice calls has reached Bukidnon province effective November 28 last year. Interconnection among telecommunication firms is mandated under Republic Act 7925. The law aims to create a universally accessible and fully integrated nationwide telecommunications network to encourage more infrastructure investments from the private sector that would benefit the consumers. The company said the interconnection will enable subscribers of Globe landline services in Bukidnon to call customers of Smart without additional charges. Globe General Counsel Froilan Castelo said in a statement they see the move “substantially reduces the cost of connectivity.” Rizal Raoul Reyes
Haier smart home appliances touted
THE Philippines business of Haier Group Corp. has rolled out intelligent home appliances. “How we organize our homes reflect how we see ourselves,” Joseph Alexis Bandol, Haier Philippines director for product marketing, was quoted in a statement as saying. “Surrounding our homes with our dreams and aspirations can inspire us to work toward what we want to become.” The Chinese multinational consumer electronics and home-appliances company rolled out its 4K Ultra high-definition Light-Emitting Diode TV comes with a 48-inch screen and power-saving technology. The company also touted its inverter refrigerator that has a conversion technology to cut power use to less than 0.1 watts when idle. Another appliance that Haier launched is its large-capacity automatic washer that has 10 water-level options and eight washing programs to accommodate different volumes of laundry. Rizal Raoul Reyes
Updated Viber features issued
VIBER Media Inc. recently announced the release of a new version of its messaging application. In a statement, the firm bought by Rakuten Inc. said the app’s new version features new instant video message, chat extension that allows users access third-party services and quickly search for stickers and redesigned emoticons. With just a quick press and hold, users can now start recording a video message for their friends. The new version features support for Giphy, Wikipedia and TheMovieDB. The new emoticons were designed with a flat, colorful esthetic. The new version is now available on Android and iOS. Rizal Raoul Reyes
R. BOSCH GMBH FOCUSES T ON INTELLIGENT DEVICES R
Commission finds Comelec liable for voter data breach
OBERT Bosch GMBH announced recently it is focusing on developing intelligent assistants.
“Personalization is a growing trend in the realm of connectivity, and we are driving this trend forward,” Werner Struth, member of the Bosch board of management, said during the company’s news conference in Las Vegas. The German technology and services supplier is focusing on the following domains: smart homes, smart cities, connected mobility and Industry 4.0, according to Struth. With the increasing personalization of products and services, connectiv it y is now reaching the next phase of development, he added. “The connected world is getting emotional,” Struth said. “Devices are becoming intelligent
This January 4 photo courtesy of Robert Bosch GMBH, shows Kuri, a home robot that the firm’s appliance subsidiary Mayfield Robotics Inc. introduced at the Consumer Electronics Show in Las Vegas. Robert Bosch GMBH.
of Things (IoT) and will be able to communicate with other modes of transportation, as well as with the smart home, Struth said. “The vehicle will play a central role in cross-domain communication.” Personalized communication between the car and its driver will also be expanded, he added: New functions are connecting the
car to its surroundings, the smart home and the repair shop. These functions will make highly automated driving possible. “If the car is connected to the smart home or the smart city via the cloud, there will be measurable benefits,” Struth said. “Connectivity is turning the car into an assistant on four wheels.” Rizal Raoul Reyes
Cruise ship operators bringing high technology to the high seas
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AS VEGAS—High technology is taking to the high seas. Cruise ships are being outfitted with sensors and trackers, all to help crew members better anticipate passengers’ needs and whims. Carnival Corp., the operator of cruise lines including its namesake, Princess, and Holland America, unveiled the new concierge technology at the CES gadget show in Las Vegas on Wednesday. It’s scheduled to debut on the Regal Princess cruise ship in November. With it, the door to your cabin will unlock automatically as you approach wearing your personalized tracking medallion. The wait staff can bring your favorite cocktail before you even ask. This type of personalization is important as cruise ships get bigger and come across as impersonal, says Mike Driscoll, editor in chief of Cruise Week, an industry publication. It can also help cruise companies attract more first-timers, including tech-savvy millennials. The leisure-cruise industry is playing catch-up with travel peers, like hotels and airlines, which now let you unlock rooms with a smartwatch or fly with a boarding pass on your phone. “It’s catching up to what life is like on the land,” Driscoll said. The linchpin of the system is a tracking medallion the size of a quarter. Cruise passengers wear it as a pendant, throw it into a purse or place it in a pocket. The medallion uses wireless technologies to
Network security in millennials era Jeff Castillo
O
NE of the toughest gigs in information technology (IT) is the job of keeping an organization’s network safe. It is also one that is getting tougher with the rise of the millennial generation. Millennials—those in their 20s to mid-30s—are starting to dominate workplaces around the world. More than one in three workers in the US are millennials, a 2015 study by Pew Research Center found. And this demographic group will account for half of the global work force by 2020, according to PwC. The term “millennial” has many connotations. Among them: They like sharing on social media. They won’t put up with bad user experiences. They want a flexible approach to work. They move on quickly if their expectations are not being met. These characteristics will define the culture of the future work place. They will also put the current network security regimes of many
companions that make everyday life easier and safer at home, in the city, in the car and at work.” Citing a recent study, Struth said more than 60 percent of respondents believe that intelligent assistants make sense. “Connected technologies must always have a benefit,” Struth said. “It is becoming increasingly important to offer clever additional functions and services tailored to individual needs and usage habits.” Bosch cited as example connected cars. The company said that by 2022, the global market for connected mobility is set to grow by almost 25 percent per year. In just a few years, cars will become an active part of the Internet
organizations to a stern test. Here are three considerations:
Social media: To block or not to block? M A N Y organizations have probably considered this question when it comes to their employees’ use of social media in the workplace. A study by HR software provider CareerBuilder, which polled employers from North America, found that 37 percent of employers see social media as one of the major productivity killers at the workplace, behind mobile phone and texting (55 percent), using the Internet (41 percent) and gossiping (39 percent). Three in four employers say two or more hours are lost a
Miles Clark of Carnival Corp. demonstrates the Ocean Compass interface before CES International on January 3 in Las Vegas. The linchpin of the concierge technology is a medallion the size of a quarter that passengers carry with them. The medallion uses wireless technologies to communicate with sensors placed around the ship and allows them to interact with displays around the ship or with crew members. AP
communicate with sensors placed around the ship, cruise terminals and even airports, where staff can provide personalized greetings as passengers fly in. Crew members armed with tablets can respond to any needs nearby. For example, a guest could be having a drink when a crew member comes by to remind him that a yoga class starts in five minutes. Or a waiter working poolside can ask whether a guest wants her usual gin and tonic. In addition, interactive displays can offer personalized directions to guests’ rooms. And the medallion ties into a payment system, so
no one has to swipe or sign anything when buying souvenirs or drinks. Whether anticipating guests’ needs will feel useful or creepy remains to be seen. Those who might be spooked don’t have to use the medallion or can limit how much they want to participate, Carnival CEO Arnold Donald said. “In the end, the guests will tell us,” Donald told The Associated Press. “If it doesn’t [resonate], it’s back to the drawing board.” Donald said he hopes the service will encourage customers to sign up for repeat cruises while spending more on incidentals. Different passengers might react quite
day in terms of productivity because employees are distracted. From a network security perspective, social media is a vector for malware and socially engineered attacks. How many links that are shared innocently enough end up bringing users to compromised web sites? And even if employees use social channels in a professional way, their friends and contacts are under no such obligation. It is easy to ban or restrict socialmedia sites at the network level. Static URL filters in Web filtering software can block or monitor specific URLs. The category-filtering feature can block entire groups of web sites. But that doesn’t mean chief information officers (CIOs) should start blocking social networks at the work place. A better approach is to relook at how network security is being enforced holistically. Having a clear social-media policy and training for staff is a good start. For instance, sales staff should be reminded of the security and business risks that might result from checking in their locations at customer sites via social channels, like Facebook. The most important safeguard though, is to have a robust, layered security infrastructure. It is a surer bet than having to rely on employees never erring in their clicks, taps and swipes with their social-media accounts.
Know thy security layers L AY ER ED security, whereby different layers of security controls combine to protect data, devices and people, is widely adopted today. It ensures that when attacks occur at different sources, whether at the network, application, device, or user level, they can be detected and stopped before they spread. It also offers an effective safeguard against different types of threats. With the changing workplace habits brought on by millennial workers, CIOs should relook at how they are setting up each layer of protection. Consider, for instance, the use of personal devices in the workplace. According to a McKinsey & Company study, around 80 percent of enterprises now allow employees to use personal devices to connect to corporate networks. And increasingly, employees expect their IT departments to support their personal devices with access to corporate applications, like e-mail and calendar. This trend, termed Bring Your Own Device (BYOD), poses a number of new security threats. In particular, CIOs should look at bolstering security at the device layer. The first step to take is to shore up the devices themselves through mandating some combination of firewalls, antimalware software, mobile device management solution
differently to the service. “With your 83-year-old aunt in Saskatchewan, it might be too much,” Driscoll said. But for a passenger in his 50s, it could make life on the ship “just easier.” Miami-based Carnival plans to expand the setup to all other Princess ships in the next several years and eventually to other vessels. Carnival, the world’s largest leisure travel company, owns more than 100 ships across 10 brands. Personalization isn’t new to the travel industry. Walt Disney World in Florida has a MagicBand wristband device that doubles as a room key and “FastPass” reservations to popular rides. The MagicBand is also linked to a credit card for speedier payments at restaurants and gift shops. John Padgett, who was one of the chief architects of the MagicBand before joining Carnival in 2014, said the cruise ship’s system goes further in eliminating the need to touch or tap a terminal. Sensors pick up signals automatically. “There are no wires. There is no charging,” Padgett said. “It doesn’t require a guest or consumer to do anything specific.” Carnival officials say there will be safeguards against someone walking away with another guest’s medallion. Each guest’s profile is tied to a security picture, so a crew member can compare a passenger’s photo on a portable device. AP and regular patching. A BYOD culture also puts organizations at risk from having their employees’ smart devices hacked because of poor passwords. Having policies and education on strong passwords are musts. Device types can also be identified so that less secure devices, such as mobile phones, can be restricted from some parts of the network. Sessions should also be secured, such as by preventing users from visiting unsafe web sites. Similarly, defenses of the user layer should also be shored up to mitigate the rising risks of interna l t hreats. T his layer is of ten the trickiest to manage due to the need to balance security and convenience. You can also use a variety of authentication methods to identify network users and allow varying levels of access. Instilling awareness and educating staff are important steps to take.
Tackle shadow IT SHADOW IT is a term used to describe the use of applications and services, often cloud based, not sanctioned by the organization. Its uncontrolled nature poses a security threat and governance challenge. Consider the scenar io of employees using their smartphone to open a file. It is likely the phone w ill make a copy of the file, which
HE National Privacy Commission (NPC) said on January 5 it has found that the Commission on Elections (Comelec) violated the Data Privacy Act of 2012. In a statement, the regulatory and quasi-judicial body created in March 2016 said it has also recommended the criminal prosecution of Chairman Andres D. Bautista, for the data breach that occurred between March 20 and 27 last year. “In its decision dated December 28, 2016, on NPC Case 16-001, the NPC underscored Bautista’s ‘lack of appreciation’ of the principle that data protection is more than just implementation of security measures,” the NPC said in a statement. “Data privacy is more than the deployment of technical security; it also includes the implementation of physical and organizational measures, as well as regular review, evaluation and updating of Comelec’s privacy and security policies and practices,” the NPC said, quoting its decision. The NPC added that the Comelec “violated Sections 11, 20 and 21 of Republic Act 10173” in the dispense of the agency’s duty as “personal information controller.” “The personal data in the breach is contained in several databases kept in the web site: [a] the voter database in the Precinct Finder Web application, containing 75,302,683 records; [b] the voter database in the Post Finder Web application, which contains 1,376,067 records; [c] the iRehistro registration database, with139,301 records; [d] the firearms-ban database, containing 896,992 personal-data records and 20,485 records of firearms serial numbers; and [e] the Comelec personnel database, containing records of 1,267 Comelec personnel,” the document reads. The NPC said the incident is the worst recorded breach on a government-held personal database in the world, based on sheer volume. Further illustrating the breadth of the breach, the NPC decision also gave a rundown of what types of compromised sensitive personal information were contained in Comelec’s two Web-based applications. “The voter database in the Precinct Finder application contained each voter’s complete name, date of birth, gender, civil status, address, precinct number, birthplace, disability, voter identification number, voter registration record number, reason for deletion/deactivation, registration date and update time,” the NPC said.
could then be sent to an unapproved online storage destination when t he phone per for ms its rout ine automatic backup. Just like that, your secure corporate data has been moved to an insecure location. In the same way, the many socialcollaboration apps favored by millennials can shift sensitive company information to insecure locations. Mandating that staff stop using nonsanctioned devices and applications is unlikely to stop their growth in the organization. Frankly, with the ubiquity of smartphones, employees are using social networks a nd t he i r p e r s o n a l c lou d a p p s whether your policies prevent it. What could be more effective is to educate users, as well as implement technology—such as data encryption, access control and traffic monitoring—to manage the issue. From a larger perspective, shadow IT happens when your staff is not happy with the solutions provided by the organization. While CIOs may not be able to prevent staff from seeking out alternative apps for, say, collaboration, they can keep things in check by being attuned to their needs. Jeff Castillo is Philippine country manager of Fortinet Inc. The views expressed in this abridged version of Castillo’s column do not necessarily reflect those of the BusinessMirror’s.
BusinessMirror
Saturday, January 7, 2017
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Sophos predicts cyber-security trends for ’17
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HE year 2016 saw a huge number and variety of cyber attacks, ranging from a highprofile Distributed Denial of Service (DDoS) attack using hijacked Internetfacing security cameras to the alleged hacking of party officials during the US election. The year also saw a rising tide of data breaches, from organizations big and small, and significant losses of people’s personal information.
Joergen Jakobsen, Sophos Plc. regional vice president for Asia Pacific and Japan, offers the following predictions for the top cybersecurity trends for 2017:
Destructive DDoS IoT attacks will rise
LAST year Mirai showed the massive destructive potential of DDoS attacks as a result of insecure consumer Internet of Things (IoT) devices. Mirai’s attacks exploited only a small number of devices and vulnerabilities and used basic password guessing techniques. However, cyber criminals will find it easy to extend their reach because there are several IoT devices containing outdated code based on poorly maintained operating systems and applications with well-known vulnerabilities. Expect IoT exploits, better password guessing and more compromised IoT devices being used for DDoS or perhaps to target other devices in your network.
Shift from exploitation to targeted social attacks
C Y BER cr imina ls are getting better at exploiting the ultimate v u l nerabi l it y—hu ma ns. Ever more sophisticated and convincing targeted attacks seek to coax users into compromising themselves. For example, it’s common to see an e-mail that addresses the recipient by name and claims they have an outstanding debt the sender has been authorized to collect. Shock, awe or borrowing authority by pretending to be law enforcement are common and effective tactics. The e-mail directs them to a malicious link that users are panicked into clicking on, opening them up to attack. Such phishing attacks can no longer be recognized by obvious mistakes.
Financial infrastructure at greater risk of attack
THE use of targeted phishing and “whaling” continues to grow.
These attacks use detailed information about company executives to trick employees into paying fraudsters or compromising accounts. We also expect more attacks on critical financial infrastructure, such as the attack involving Society for Worldwide Interbank Financial Telecommunication or Swift-connected institutions, which cost the Bangladesh Central Bank $81 million in February last year. The Swift recently admitted that there have been other such attacks and it expects to see more, stating in a leaked letter to client banks: “The threat is very persistent, adaptive and sophisticated—and it is here to stay.”
Exploitation of the Internet’s inherently insecure infrastructure
ALL Internet users rely on ancient foundational protocols, and their ubiquity makes them nearly impossible to revamp or replace. These archaic protocols that have long been the backbone of the Internet and business networks are sometimes surprisingly f laky. For example, attacks against Border Gateway Protocol could potentially disrupt, hijack, or disable much of the Internet. And the DDoS attack on Dyn last October (launched by a myriad of IoT devices), took down the DNS provider and, along with it, access to part of the Internet. It was one of the largest assaults seen and those claiming responsibility said it was just a dry run. Large-scale ISPs and enterprises can take some steps to respond, but these may well fail to prevent serious damage if individuals or states
choose to exploit the Internet’s deepest security flaws.
Increased attack complexity
ATTACKS increasingly bring together multiple technical and social elements, and reflect careful, lengthy probing of the victim organization’s network. Attackers compromise multiple servers and workstations long before they start to steal data or act aggressively. Closely managed by experts, these attacks are strategic, not tactical, and can cause far more damage. This is a ver y different world to the preprogrammed and automated malware payloads we used to see patient and evading detection.
More attacks using built-in admin languages and tools
SOPHOS sees more exploits based on PowerShell, Microsoft’s language for automating administrative tasks. As a scripting language, PowerShell evades countermeasures focused on executables. Sophos also sees more attacks using penetration testing and other administrative tools that may already exist on the network, need not be infiltrated, and may not be suspected. These powerful tools require equally strong controls.
Ransomware evolves
AS more users recognize the risks of ransomware attack via e-mail, criminals are exploring other vectors. Some are experimenting with malware that reinfects later, long after a ransom is paid, and some are starting to use built-in tools and no executable malware at all to avoid detection by endpoint protection code that focuses on executable files. Recent examples
have offered to decrypt files after the victim shared the ransomware with two friends, and those friends paid to decrypt their files. Ransomware authors are also starting to use techniques other than encryption, for example, deleting or corrupting file headers. And with “old” ransomware still floating around the Web, users may fall victim to attacks that can’t be “cured” because payment locations no longer work.
The downside of encryption
Emergence of personal IoT attacks
Rising focus on exploits against virtualized and cloud systems
USERS of home IoT devices may not notice or even care if their baby monitors are hijacked to attack someone else’s web site. But once attackers “own” a device on a home network, they can compromise other devices, such as laptops containing important personal data. We expect to see more of this, as well as more attacks that use cameras and microphones to spy on households. Cyber criminals always find a way to profit.
Growth of ‘malvertising’ and corruption of online advertising ecosystems
“MALVERTISING”, which spreads malicious software through online ad networks and Web pages, has been around for years. But in 2016 we saw much more of it. These attacks highlight larger problems throughout the advertising ecosystem, such as click fraud, which generates paying clicks that don’t correspond to real customer interest. Malvertising has actually generated click fraud, compromising users and stealing from advertisers at the same time.
AS encryption becomes ubiquitous, it has become much harder for security products to inspect traffic, making it easier for criminals to sneak through undetected. Unsurprisingly, cyber criminals are using encryption in creative new ways. Security products will need to tightly integrate network and client capabilities, to rapidly recognize security events after code is decrypted on the endpoint.
ATTACKS against physical hardware (e.g, Rowhammer) raise the possibility of dangerous new exploits against virtualized cloud systems. Attackers might abuse the host or other guests running on a shared host, attack privilege models and conceivably access others’ data. And, as Docker and the entire container (or “serverless”) ecosystem become more popular, attackers will increasingly seek to discover and exploit vulnerabilities in this relatively new trend in computing. Sophos expects active attempts to operationalize such attacks.
Technical attacks against states and societies
TECHNOLOGY-based attacks have become increasingly political. Societies face growing risks from both disinformation (e.g., “fake news”) and voting system compromise. For instance, researchers have demonstrated attacks that might allow a local voter to fraudulently vote repeatedly without detection. Even if states never engage in attacks against their adversaries’ elections, the perception that these attacks are possible is itself a powerful weapon.
Privacy commission urges users to change passwords
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Steve Mahan, who is blind, stands by the Waymo driverless car during a Google event on December 13, 2016, in San Francisco. The US Labor Department is trying to bar Google from doing business with the federal government unless the internet company turns over confidential information about thousands of its employees. AP
Lawsuit seeks to ban Google from U.S. government contracts
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AN FR ANCISCO —The US Labor Department is trying to bar Google from doing business with the federal government unless the Internet company turns over confidential information about thousands of its employees. The potential banishment is being sought in a Labor Department lawsuit filed on Wednesday with the Office of Administrative Law Judges. The complaint alleges that Google has repeatedly refused to provide the Labor Department with employee compensation records and other information as part of an audit designed to ensure the company isn’t discriminating against workers based on gender or race. The review of how Google pays the thousands of workers at its Mountain View, California, headquarters is allowed under
decades-old laws regulating US government contractors. Google has struck a series of deals with various federal government agencies during the past decade, including a digital advertising agreement cited by the Labor Department that has generated more than $600,000 for the company since June 2014, according to the complaint. That amount is a pittance for Google, whose revenue has surpassed $130 billion during the same span. If Google doesn’t comply with all its demands, the Labor Department wants a legal order that would void all of the company’s current federal government contracts and block future deals. In a statement, Google said it has provided hundreds of thousands of records in an attempt to comply with the Labor Department’s requests, but has rebuffed some
of the agency’s demands as “overbroad” and an invasion of employee privacy. Like most other big technology companies, Google for the past few years has been posting breakdowns of its work force that show most of its computer programmers and other high-paid employees in technical jobs are white and Asian men. The disclosures have become a source of embarrassment for Google and its technology industry peers, who have repeatedly acknowledged they need to do more to hire women, blacks and Hispanics. “We’re very committed to our affirmative action obligations, and to improving the diversity of our work force, and have been very vocal about the importance of these issues,” Google reiterated in its response to the Labor Department’s lawsuit. But Google, which is part of Alphabet Inc.,
and other tech companies so far have only been disclosing the types of jobs held by the two genders and different races without providing specifics about the salaries in different employment categories. It is well known, though, that programmers and engineers who write the coding for technology products and services are among the highest paid workers besides the companies’ executives. The Labor Department maintains that Google agreed to submit to a higher level of scrutiny when it decided to do business with federal agencies funded by taxpayers. “Like other federal contractors, Google has a legal obligation to provide relevant information requested in the course of a routine compliance evaluation,” said Thomas Dowd, acting director of the Labor Department’s Office of Federal Contract Compliance Programs. AP
HE Nationa l Pr ivac y Commission (NPC), the P h i l i p p i n e s ’s p r i v a c y w atc hdog , i s re com me nd i ng that Internet users change the passwords of their e-mail and social-media accounts as part of their new year’s resolutions. “ R e g u l a rly c h a ng i ng you r passwords for online accounts, such as e-mail and social media, is one of the most basic and easiest ways of protecting your data privacy,” Privacy Commissioner Raymund Enriquez Liboro was quoted in a statement as saying. Liboro said this after Yahoo! revealed that more than 1 billion user accounts were compromised from a data breach on the Sunnyvale, California-firm’s servers that happened in August of 2013. The breach is now considered the largest e-mail-data breach in history. Sensitive personal data were compromised, including e-mail addresses, dates of bir th and telephone numbers, that can be used in identit y theft and ph i sh i ng sc a m s. T he breac h much was big ger t han t he data breach in 2014 of around 500,000 user accounts that was only announced by Yahoo! in September last year. “If you use Yahoo! for e-mail or other Yahoo! online services, we suggest that you not wait until the end of the year to change your account credentials, but instead, change them as soon as possible,” Liboro said. “E-mail is usually the means social-media services, such as Facebook, confirm your identity, if your e-mail is compromised, there is a chance that your social-media accounts are compromised, as well, and criminals could use confidential information there to commit cybercrimes directed at you or the contact list on your e-mail and social-media accounts.”
In the Philippines personal data breaches must be reported to the NPC within 72 hours from their discovery. Liboro cited the implementing rules and regulations (IRR) of the Data Privacy Act, or Republic Act 10173, issued by the Commission last August as basis for the recommendation. Other than password changes, the NPC is also recommending that Internet users utilize twofactor authentication for confirming their identity. Two-factor authentication is when Internet services send a text message or a code to your mobile phone to confirm who you are instead of just sending an e-mail. E-mail providers sometimes use this feature when someone accesses their account from an unfami l iar Inter net protocol address or device. Oliver Samson
National Privacy Commission’s best practices in changing passwords:
n Don’t reuse passwords. One ultrasecure one won’t be any good if someone finds it. n While combining upper and lower case passwords with numbers to alter a memorable word, e.g, “M4raD0na”, is often advised, these are more easily cracked than you might think. n Make a memorable, unusual sentence: “Ako ay isang responsableng mamamayang Pilipinong Internet user [aa1rmpiu].” n Changing passwords to passphrases, like: “AskalsA reTheBestTeamInAsia,”dra matically improves security. Each additional character increases the number of possible combinations exponentially, making it virtually impossible to crack. Source: National Privacy Commission
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news.businessmirror@gmail.com
Pinoy Netflix viewers P slow in getting hooked I
Practo buys Bangalore-based analytics platform provider
T takes four episodes before Filipino viewers get hooked into shows via Netflix, executives of the Philippine operation of the eponymous firm said.
“We found that viewers do not base their decision to finish a series on the first episode alone,” a statement from the Philippine office of the Scotts Valley, Califor-
nia-based firm said. “On average, it took four episodes for Filipinos to get hooked on a show.” NetFlix Philippines cited as example viewers of Marvel’s Daredev-
il and Jessica Jones shows. “Filipino viewers easily get hooked early on with shows that allow them to live vicariously through law-breaking characters featured in shows such as Narcos, Breaking Bad and Better Call Saul, the company said. Citing 2016 data, NetFlix said some of the most popular shows for the year in the Philippines include “Orange is The New Black, Stranger Things, Narcos, House of Cards, The OA, Luke Cage, and The Crown, Designated Survivor. According to the company, Fil-
ipinos tend to pair their TV binge with a movie right after, like other Netf lix members around the world. “Fans who loved Stranger Things wanted more of the same great thr ills and chose Super 8,’another sci-fi thriller set in the 1980s,” NetFlix said. The Internet television network was launched in the Philippines and 130 markets around the world on January 6, 2016. The company said it will launch over a thousand hours of original content this year. Rizal Raoul Reyes
Here come ‘smart stores’ with interactive shelves
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A S V EGA S —Tomor row’s retail stores want to take a page from their online rivals by embracing advanced technology—everything from helpful robots to interactive mirrors to shelves embedded with sensors. The goal: Use these real-world store features to lure shoppers back from the Internet, and maybe even nudge them to spend more in the process. Amazon’s new experimental grocery store in Seattle, opening in early 2017, will let shoppers buy goods without needing to stop at a checkout line. Sensors track items as shoppers put them into baskets or return them to the shelf. The shopper’s Amazon account gets automatically charged. “Amazon, for good or bad, has been setting the path,” said Robert Hetu, research director at Gartner Research. “Each retailer is going to have to respond in some way. But it’s not one-size-fits-all.” Kroger, Neiman Marcus and Lowe’s are among the companies already experimenting with futuristic retail stores. Robots, for instance, could help guide shoppers to the right aisle, while augmented reality apps could help you see how a particular shade of paint will look in the living room—or how you might look in a pair of jeans. Many of these technologies will be unveiled or demonstrated at the CES gadget show in Las Vegas, which begins on Tuesday with media previews. Plenty of retailers have learned through trial—and error—that technology can’t get too far ahead of shoppers. It has to be easy to use and beneficial to shoppers in some way, whether it’s to save time or money. If retailers get it right, they might succeed in boosting spending at retail stores at a time when consumers increasingly prefer to shop online. Here are five technologies coming to a store near you.
Smart shelves
WEB retailers have plenty of data on their customers. Some of these online technologies can even track shoppers from site to site to lure them back with what’s known as retargeting ads—promos targeted to what that shopper has looked at before, but didn’t actually buy. Smart shelves with sensors promise the same kind of in-depth consumer behavior analytics at retail stores. At a K roger store in Cold Spring, Ohio, shelves currently show digitized price tags and information about the products. The next step is to tie that to individual shoppers. For example, for a shopper who prefers glutenfree products, the price tags could light up in the aisle where all the gluten-free options are. The company says this will all be done with the customer’s permission.
R ACTO Technologies Pvt. Ltd., a Web-based clinic management-software developer, announced last week it bought Bangalore-based Enlightiks Business Solutions (EBS) Pvt. Ltd. The latter is a provider of an advanced analytics platform that also offers business-intelligence (BI) solutions to health-care enterprises, a statement by Practo said. “ T h e a c q u i s it i o n f u r t h e r strengthens Practo’s industr y leading portfolio in the healthcare enterprise segment and augments existing solutions that include appointment management and a full stack hospital information-management system (Hims) solution. According to Practo founder and CEO Shashank ND, the purchase of EBS is the company’s fifth acquisition and third in the enterprise space. “This brings Practo closer to its vision of simplifying health care by providing end-to-end solutions for the entire ecosystem,” Shashank said. “We will be able to help CXOs [chief experience officers] make their enterprises run more efficiently, which should
improve the overall quality of care while making it more affordable.” EBS’s main offering is a business intelligence and predictive analytics platform providing actionable insights using complex mathematical, statistical, computational and cognitive models. Called Querent, the platform can provide accurate predictions for key business metrics and help enterprises take actions proactively that can help make a positive impact on business decisions in the short to medium term, Practo’s statement said. The platform has an ability to read both structured and unstructured information and apply advanced machine learning and deep learning techniques to uncover hidden insights. It uses n at u ra l l a ng u age - generat ion technology to provide automated insights to the business user by analysing large volumes of information residing inside hospital information and other transactional systems. The entire team of 50 people from EBS will be absorbed by Practo as the firm’s analytics business unit. Rizal Raoul Reyes
PHL edtech firm 1 of 5 start-ups in global accelerator program
T This photo provided by Best Buy shows an example of Best Buy’s demonstration for Facebook Inc.’s Oculus Rift headsets. From robots to interactive mirrors to shelves embedded with sensors, tomorrow’s retail stores will embrace technologies to not only draw shoppers back from e-commerce but also nudge them to spend more. AP
Perch Interactive, a start-up that is working with chains like Sunglass Hut and fragrance maker Jo Malone, uses laser and motion sensors to detect when a product is picked up. Perch monitors the interactions and lets retailers know what people pick up but don’t buy. It also offers recommendations: When a shopper picks up a Jo Malone product, an interactive display pops up to show a complementary fragrance.
Robots
AMAZON and other retailers have long used robots in warehouses to help package and ship orders. But what about interacting with shoppers? Home improvement retailer Lowe’s is testing robots in one of its San Jose, California, store, and plans to roll them out to 10 more stores in the state this year. Besides scanning shelves for inventory, the robots can guide customers to specific products in both English and Spanish. Shoppers will also start seeing robots that interact with them more deeply. Japanese joint venture SoftBank Robotics is testing a 4-foot humanoid robot called Pepper at two Westfield Malls in California. They greet shoppers and can do a little dance, but have the potential to send messages geared to people’s age and gender through facial recognition. SoftBank Robotics says it’s working with clothing retailers to help suggest outfits to shoppers.
Interactive mirrors
HIGH-end clothing stores are testing interactive mirrors in dressing areas, a key place where shoppers decide whether to buy or not. Neiman Marcus has installed these outside fitting rooms at 20
stores to offer shoppers a 360-degree view of what an outfit looks like. Shoppers can make side-byside comparisons without having to try them all on. They can also share video with friends for feedback. Variations include capturing a customer’s session at the beauty counter and e-mailing a video to help the person recreate the look at home. Rent the Runway, an online retailer that lets people rent highend clothing, teamed up with Samsung to have digital displays highlight its online inventory for shoppers at a new location in New York. A mirror in the store is planned to recommend items that go with what the customer is wearing.
Virtual and augmented reality
HOME-improvement retailers have been embracing virtual reality and augmented reality to help shoppers figure out ways to decorate homes or apartments. With such technologies, shoppers wear a headset to picture how something might look in 3-D, in some cases overlaid on top of their real kitchen or living room. Home Depot’s augmented reality app lets customers upload a picture of the room on their phone and thumb through thousands of paint and stain colors until they arrive at one that’s right. These tools should become more pervasive. At CES, a major clothing chain is expected to announce a tool for shoppers to virtually try on jeans and other items.
Self-checkout
STORES have been pushing selfservice kiosks for years to lower labor costs and speed up checkout lines. It hasn’t always been smooth,
though. Two years ago, Wa lMart offered a Scan & Go app for shoppers to scan items as they grabbed them from the shelves. At the checkout counter, the customer merely had to scan a code to complete the transaction. But Wal-Mart scrapped the project after customers found the app difficult to use. Despite Wal-Mart’s hiccups, plenty of stores believe they can avoid the pitfalls. Andy Wong, partner at Accenture’s Kurt Salmon Digital, said Wal-Mart had a tougher time because its customers are diverse and less techy overall. By contrast, Amazon is trying out its store in Seattle, a tech center, and has a customer base already comfortable with digital shopping. Wong also said Amazon is smart to focus just on groceries, and he expects other retailers to follow Amazon’s lead and also focus on certain products. In fact, shortly after Amazon announced its checkout-less store, Panasonic Corp. unveiled an unstaffed bagging system at a Lawson convenience store in Japan. Shoppers place a “smart” basket with their items on a machine at checkout. The system calculates the bill and automatically bags the items. Shoppers now have to scan items they put into the basket, though wireless tags coming in February will eliminate that step. Shoppers still have to manually pay using cash or card. As retailers consider automated self-checkout and other technologies, they have to look beyond the tech wizardry. “It all has to go back to the consumer,” Gartner’s Hetu said. “For each environment, you have to assess what the consumer will interpret as value.” AP
HE education-technology (edtech) platform of Engadin Corp. was selected as one of five start-ups in the acceleration program of the Qatar Foundation Inc. Engadin Corp.’s Edukasyon.ph web site was one of projects selected for the Qatar Foundation’s World Innovation Summit for Education (Wise) 2016 to 2017 Accelerator Program, the Doha, Qatar group headed by Her Highness Sheikha Moza bint Nasser said. Launched in 2014, the accelerator program is designed to support the development of young, innovative edtech projects with high potential for scalability and positive impact in the field of education, the statement said. Selected projects benefit from a yearlong mentorship program tailored to address their specific needs. The accelerator program also serves as an intermediary to connect these projects with an international network that creates opportunities to share knowledge and find support from donors and investors, the statement said. The other projects are Chalk.com (Canada), Aflatoun Education (the Netherlands), Learn Syria (Canada/Syria) and Joko’s World (Australia). Edykasyon.ph is the only project from the Philippines. According to the Wise web site, Edukasyon.ph is a social enterprise in the edtech sector “established on the belief that every student deserves a quality and relevant education that leads to employment.” “Through the web site, the project empowers students by giving them choice, advice and convenience in finding the right
school for their dream career,” Wise said. “It offers Filipino students choice with a school search engine [over 2,000 universities, more than 80,000 courses and over 4,000 scholarships].” According to the Wise web site, students gain advice by filtering and ranking offerings based on price, quality and relevance and navigating through 200 career pathways. The web site also offers convenience by allowing students to apply to schools online directly, Wise said. With a current reach of 50,000 users every month, the web site has witnessed user growth of over 20 percent a month. It has signed up over 100 schools, who receive applications from prospective students, and guide current students in their education to career pathways. In addition to the web site, Wise said the project also conducts career clinics and a multiple stakeholder training in high schools across the country on college and career awareness. The staff of Engadin and the other projects will officially join the accelerator program at a Wise engagement early next year, the Qatar Foundation said. They will be invited to take part in specific working sessions and be offered unique networking opportunities. The future participants of the accelerator program respond to diverse issues, such as teacher training, career guidance, access to quality education in refugee camps and developing students’ awareness of other cultures and teaching them tolerance and empathy through interactive games.
Customer engagement program required as demand rates rise
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HERE is great need for companies to craft a fast, efficient and effective customer turnaround, according to a new homegrown technologyconsultancy firm. “Customer engagement is not just about telling your customers what you offer and closing the deal,” Third Pillar Business Applications (TPBA) Inc. President and CEO Jennifer Ligones said. “It is a journey of connecting with your customers, understanding their needs and providing them the needed support and excellent after-sales service.” Ligones said customer engagement is more important if companies want to foster better client relations and retain customers. She added as consumers continue to become more demand-
ing, organizations must excel in three aspects—marketing, sales and customer service—if they are to provide customer delight. With Salesforce, the world’s leading and most innovative customer relations-management organizations, can now engage with their customers more efficiently and smarter, she said. Salesforce Marketing Cloud helps insurance companies know potential clients by capturing their profiles, thereby making it easier for the sales team to identify the right service or product to offer to a customer. Sa lesforce Sa les Cloud enhances a sales team to sell faster, smarter and more convenient through automated tracking of customer information and interactions. Rizal Raoul Reyes