Businessmirror june 11, 2016

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Saturday, June 11, 2016 Vol. 11 No. 245

External environment may prove to be more volatile for incoming President

INSIDE

Why oil prices and power rates keep on rising Database

Cecilio T. Arillo Conclusion

Epira and more problems

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FTER the May 2001 senatorial election, President Gloria MacapagalArroyo pushed the passage of the Electric Power Industry Reform Act (Epira), offering several reasons to convince Congress to pass the law. Among them was that the passage of the law was necessary for the World Bank and the Asian Development Bank to release a loan of $950 million to the country, and that the enactment of Epira would mean cheaper electricity. She boasted that electric power rates would immediately go down by P0.30 per kilowatt-hour, as soon as Congress passed the measure. To stress her point, the President vowed to veto the bill if it will not lower power rates. Continued on A4

Tougher times ahead under Duterte admin By Mia Rosienna Mallari

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@MiaRosienna

he incoming administration under President-elect Rodrigo R. Duterte may not be as fortunate as its predecessor, as the likelihood of another recession looms in the years ahead, according to latest macroeconomic readings by the Bank of the Philippine Islands (BPI).

Emilio S Neri Jr., lead economist at BPI, believes the external environment during the term of incoming President Duterte should prove volatile, based on global economic trends. The probability of recession in the United States in 2017 has increased significantly, according to Neri. “Even the likes of China and Europe are facing challenges that are much difficult [compared to] the last

three years,” Neri said. He noted President Aquino was chief executive shortly after the 2008 global financial crisis that the Philippines managed to overcome with resilience, a feat that may not be repeated under Duterte. The economist also said it may be better for the central bank to begin buying more dollars and boost its foreigncurrency reserves now, while it See “Duterte admin,” A2

cleanup process before the hallowed place is thrust another time unto the consciousness of millions of Filipinos observing the country’s birth as a nation many years ago. It is sad that at the recently completed national elections, some of us would rather go back to when our fundamental rights as free and independent people was mocked by the authority of a repressive chief executive. NONIE REYES

Diokno to speed up spending, eyes VAT hike

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and Luisa M. Lacson, HFL

Even the likes of China and Europe are facing challenges that are much difficult [compared to] the last three years.”—Neri

banner activity In preparation for the 118th Independence Day rites set this Sunday, workers at the Emilio Aguinaldo Shrine in Kawit, Cavite, complete the

@ davecaga

Dear Lord, Your resurrection is the end-all and be-all of our Christian faith. It marks our resurrection, too. And if we have been raised with You, we must seek what is above, where You are seated at the right hand of God. It is time, then, to leave the grave of our sins and live in the splendor and freedom of the new life, which you have earned for us. May the image of the Risen Christ be imprinted in all of us, sinners, who are converted. We thank You for having made You share in the transforming effects of Your resurrection even in this life. Amen! Word & Life, Fr. Sal Putzu, SDB

US push on China factories seen as prelude to trade clash

A worker repairs the ground at a container port in Qingdao in eastern China’s Shandong province on Wednesday. ap

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hina’s pledge to reduce overcapacity in its steel industry has eased tension with the United States, but probably won’t be enough to head off a trade clash between the world’s two biggest economies over whether the Chinese have truly embraced market forces. Treasury Secretary Jacob J. Lew has been pressing China in recent months on the issue of its excess capacity, arguing in the past week that it has distorted global markets for steel and aluminum, and may have a “corrosive” effect on the country’s growth. Lew’s arguments echo those made by US steel and aluminum makers, who say state-supported Chinese producers are feeding a global glut of the commodities. What Lew didn’t mention when he raised this issue at bilateral talks in Beijing this week: His statements are a possible prelude to denying China the prize of recognition as a “market economy” after a 15-year wait—a designation that would hamper America’s ability to levy antidumping duties on Chinese steelmakers. “It’s a very high-profile issue,” said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics who served as a Treasury official in the 1970s. Chinese officials “regard it as an insult that they’re treated as a nonmarket economy.” When China joined the World Trade Organization (WTO) in 2001, the terms allowed other countries to ignore China’s pricing data when deciding whether Chinese steel was being “dumped” in foreign markets at below-market prices. But that provision expires in December on the 15-year anniversary of the WTO agreement, and China has argued that other countries must recognize it as a market economy at that time. US manufacturers oppose such recognition. See “US,” A2

By David Cagahastian

FREEDOM OF THE NEW LIFE

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ncoming Budget Secretary Benjamin E. Diokno is expected to speed up infrastructure spending for the next administration, eyeing additional funds from value-added tax (VAT) adjustment. “My personal position is that it’s better to tax consumption than income, for as long as food, in its original state ,is exempted from VAT. It is in this sense that our VAT system is slightly progressive, the burden is heavier on the rich. But this is the call of the incoming finance secretary,” Diokno told the BusinessMirror. Although he clarified that the Executive branch’s proposal for tax reform would be up to the incoming finance chief, Diokno would be part of the economic-policy team of Presidentelect Rodrigo R. Duterte, who earlier asked him to head the Department of

PESO exchange rates n US 45.9170

My personal position is that it’s better to tax consumption than income, for as long as food, in its original state, is exempted from VAT.”—Diokno

Budget and Management (DBM). The University of the Philippines professor is known to be averse to underspending, and had earlier alleged the Aquino administration underspent at least P1 trillion in the past six years.

Government underspending in 2014 was the reason behind the low GDP growth of 6.1 percent in 2014, below the revised target range of 6.5 percent to 7.5 percent. The proposed increase in the VAT is being floated by both the economic team formed by incoming Finance Secretary Carlos G. Dominguez III and by Finance Secretary Cesar V. Purisima as part of the tax-reform package that will supposedly ease the tax burden on those earning up to P1 million in annual gross income. Under Purisima’s tax-reform study, to be turned over to the new administration, the main component of the tax reform is the exemption from income tax of the first P1-million annual salary of every individual wage earner, which will cost the government some P151 billion to P215 billion in foregone revenues. Purisima’s proposal will also make See “Diokno,” A2

Economists see better export figures in Sept By Cai U. Ordinario

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@cuo_bm

espite the continuous slide in Philippine export earnings, economists remain sanguine there’s room for improvement. On Friday the Philippine Statistics Authority (PSA) said export earnings posted a contraction of 4.1 percent in April this year to $4.254 billion, from $4.434-billion recorded value in April 2015. Export receipts growth between January and April 2016 posted a 7.3-percent decrease from $18.738 billion in 2015 to $17.363 billion in the same period of 2016. “I expect exports to do better in the third and fourth quarters. There must be clear indications of economic strength in our major export markets [for this to happen],” University of Asia and the Pacific

4.1%

The contraction in export earning, from $4.434 billion in April 2015 to $4.254 billion in the same period this year (UA&P) School of Economics Dean Cid L. Terosa told the BusinessMirror. “Exporters [for their part] need to scale up, create markets, integrate and innovate,” he added. First Met ro Investment Corp.-UA&P Capital Markets Research’s Victor A. Abola said major markets, such as the United States, are expected to post better growth in the second half of 2016. Abola said the growth of the US economy will be the major determinant of export growth

n japan 0.4288 n UK 66.4006 n HK 5.9164 n CHINA 6.9878 n singapore 33.9497 n australia 34.1026 n EU 51.9689 n SAUDI arabia 12.2478

See “Economists,” A2

Source: BSP (10 June 2016 )

A2 Saturday, June 11, 2016

Economists. . . Continued from A1

since a growth in their economy will be an indicator of global demand. He said the country can see improvement in export earnings around July this year, but positive growth numbers would start in September. “We’ll see better performance in the second half, particularly in the last four months,” Abola said. “Better growth starts in July, but you might have some bumps, but definitely in September you’ll see positive growth all the way,” he added. To boost export growth, National Economic and Development Authority (Neda) Director General Emmanuel F. Esguerra said there is a need to improve export products and diversify toward nontraditional export markets with high demand. Esguerra also noted the uptick in outward sales to the Asean region during the period, especially to the CLMV (Cambodia, Lao PDR, Myanmar and Vietnam) countries. This uptick, he added, needs to be sustained by maximizing the benefits

Diokno. . .

Continued from A1

the income-ta x rate on selfemployed individuals and professionals to a fixed rate of 25 percent on their taxable income, retaining the allowable itemized deductions or the optional standard deduction on gross income, but removing all other personal and additional deductions. T h i s wou ld pre c lude t he absurd situation wherein professionals, such as doctors and law yers, are able to skirt the

BMReports BusinessMirror

and opportunities from the country’s trade agreements in the region. “It is critical to promote quality consciousness, among local producers, and establish a strong national quality infrastructure to ensure quality and safety of products; protect consumers and the environment; boost the competitiveness of industries; and allow the Philippines to access international markets,” Esguerra said. The country’s total export receipts from the country’s top 10 market destinations for the month of April 2016 was valued at $3.574 billion, or 84-percent share of the total export receipts. The top 3 export markets in April were Japan at 20 percent; United States, 16.6 percent; and Hong Kong, 11.1 percent. Exports to Japan reached $850.72 million in April. It increased by 3.2 percent, from $824.26 billion recorded in the same month a year ago. Shipments to the US were valued at $704.64 million in April. It recorded a decrease of 0.8 percent, from $710.44 million in same month last year. The country’s exports to Hong Kong amounted to $472.01 million. It fell by 0.4 percent, from $474.04 million recorded in the same month last year. highest tax brackets through deductions on their gross income, which results in a lower taxable income than those who are working on a monthly salary basis. The projected decrease in government revenues from the adjustments to be made on the income tax to be imposed on wage earners will be offset by an increase in the VAT rate from 12 percent to 14 percent, and the removal of all exemptions from VAT, except for goods and services relating to agriculture, health, banks and education. However, there is strong opposition to the proposal to increase

Duterte admin. . .

Continued from A1

can and establish a cushion for when the economic hardships come at some point forward. Neri expressed a degree of reservation over a planned series of public-sector deficits that may widen further than intended, where government spending and revenue dynamics lead to episodes of market volatility. Spending on key infrastructures, being one of the targeted priorities of development in the country, lead to certain lag, with the revenue and economic activity that tags along with it, coming in one to two years after the construction is completed, according to Neri. Still, he said the upside is the deficit spending will generate local employment and help provide alternate solutions for the country’s critical lack of public infrastructures. He also said the key players in the country’s growth narrative for the next six years will include the governor of the Bangko Sentral ng Pilipinas (BSP) and the secretaries of the departments of Trade and Industry and Budget and Management and the Bureau of the Treasury, who all contribute to making sure the country’s fiscal and monetary policies are well-crafted and carefully implemented. BSP Deputy Governor Diwa C. Guinigundo previously said the $285-billion economy is perfectly capable of delivering 7-percent to 8-percent local output growth measured as the GDP. Equity stocks went up by 5 percent days after the national elections, when Duterte was seen as the surefire victor. Neri said various analysts and observers have painted an optimistic six-year landscape based on the then-mayor’s track record of enforcing the law. “There are various rules protecting all sectors of society, but they are not executed well. Execution is key. Hindi pwedeng puro analysis-paralysis lang,” Neri said.

the VAT rate, which now seems to be the most popular alternative, among the policy-makers, to make up for the shortfall in revenues expected from the tax reform, although Mr. Duterte had earlier categorically dismissed the proposals to raise the VAT. According to the Tax Management Association of the Philippines (TMAP), the proposed increase in the VAT rate is untimely at this time, and will result in minimal increase in VAT collection if the collection efficiency of the Bureau of Internal Revenue (BIR) does not improve first.

“Not now. Increasing the VAT rate at this time is uncalled for since the VAT effort is still very low,” TMAP President Benedict Tugonon told the BusinessMirror. “The BIR has to improve the VAT effort and improve VAT-collection efficiency before increasing the VAT rate, otherwise, the rate increase will not result to substantial increase in revenue collection,” Tugonon added. However, he said an increase in the VAT and the lifting of some of the VAT-exemptions should definitely be among the government’s options in increasing revenues.

US. . .

news@businessmirror.com.ph

Continued from A1

Possible retaliation

If the US refuses to grant that status, China will probably appeal to the WTO and retaliate against US companies, Hufbauer said. Lew said this week that marketeconomy status “is not an automatic determination,” and that the commerce department is responsible for deciding on the issue. A commerce department official, who asked not to be identified, said in a statement that WTO members aren’t required to recognize China as a market economy on any date, and if China made a formal request, the department would begin a review that includes public comment. China will “progressively” cut excess capacity in its steel sector, according to a joint statement with the US on Tuesday following the annual Strategic and Economic Dialogue meeting in Beijing, the final one held by the Obama administration. The Chinese promised to “ensure market forces are not constrained,” so that its steelmakers take on a “stronger market orientation.” China this week restated a promise by its State Council, or Cabinet, to cut 100 million to 150 million tons of steel capacity. The Organisation for Economic Co-operation and Development (OECD) estimated in a study last year that there were almost 600 million tons of excess steel capacity globally, double the amount in 2007. Lew welcomed the commitments China made on Tuesday. “We understand each other’s positions quite well and we have an outcome that’s quite strong,” he told reporters in Beijing. He said the US will continue to push for a similar agreement on aluminum, noting he will return to

China next month for a meeting of the Group of 20’s finance ministers and central bankers. “These are international issues and not just US concerns. I rather suspect there are going to be other countries raising these issues, as well,” Lew said.

European debate

The European Parliament signaled last month it would reject any proposal to recognize China as a market economy. The European Commission is due to rule on the matter in July, and European Trade Commissioner Cecilia Malmstroem has indicated openness to granting China that status. There’s “absolutely no chance” that the Obama administration will provide such recognition, said Scott Kennedy, a China scholar at the Center for Strategic and International Studies in Washington. “The US decision was made a long time ago, on strictly political grounds,” he said. “The steel industry is located in politically important states.” Huo Jianguo, a senior trade researcher at China’s Ministry of Commerce in Beijing, said “China’s export companies will be badly affected” if market-economy status isn’t granted. Chinese officials at the dialogue pushed back on US concerns over excess capacity, with Finance Minister Lou Jiwei saying that, while the government is addressing the issue, the economy isn’t centrally planned and private firms wouldn’t take instructions from the government. He may have a point. “Excess capacity alone is not an indicator of unfairness,” Peterson’s Hufbauer said. “There are stateowned segments that are very large in many economies.” Bloomberg News

news@businessmirror.com.ph

MPIC: No deal yet on MRT 3 rehab with Sobrepeña By VG Cabuag @villygc

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etro Pacific Investments Corp. (MPIC) is pursuing its proposal for the rehabilitation and improvement of the Metro Rail Transit 3 (MRT 3) project under the administration of President-elect Rodrigo R. Duterte, but admitted that MPIC is yet to reach an agreement with the Sobrepeña group to jointly undertake the project. In a disclosure to the Philippine Stock Exchange, MPIC said “it has, in fact, resubmitted its proposal, and will, of course, give due regard to the inputs from the incoming administration.” “While MPIC holds option rights to acquire all the interest of the FilEstate Group in MRT 3, there is no agreement on a partnership between MPIC and Mr. [Robert John] Sobrepeña in undertaking the rehabilitation and improvement of the MRT 3 project,” the conglomerate said. MPIC added: “We are advised that Mr. Sobrepeña has submitted an alternative proposal regarding MRT 3. Despite this, MPIC intends to pursue its own proposal with the new administration, which proposal it believes to be the most beneficial solution.” The MRT 3 carries close to 600,000 passengers per day, wellabove its designed daily capacity of 350,000. As early as 2011, MPIC submitted a proposal to the Department of Transportation and Communications, which offered more than $500 million worth of investments from the private sector to be used to rehabilitate and upgrade the MRT 3. MPIC’s proposal did not prosper, as the offer included raising fares for the train system. Outgoing Transportation Secretary Joseph Emilio A. Abaya said earlier the government was more inclined toward an open and transparent competitive bidding. Together with Ayala Corp. and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., MPIC is part of the Light Rail Manila Corp., the consortium that bagged the contract for the Light Rail Transit Line 1 Cavite Extension, operation and maintenance project.

Economy BusinessMirror

La Niña, oil-price recovery threaten PHL’s Q2 production growth–Neda

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By Cai U. Ordinario

@cuo_bm

he National Economic and Development Authority (Neda) expects the country’s production volume to increase in the second quarter of the year. Neda Director General and Economic Planning Secretary Emmanuel F. Esguerra said this after the latest Monthly Integrated Survey of Selected Industries (Missi) report showed manufacturing output to post a 10.5-percent growth in April. “A bullish business outlook is expected for the second quarter. Higher production volume is anticipated across manufacturing subsectors due to the typical increase in demand during summer season and enrollment periods,” the Cabinet official said. Esguerra said the stable inflation and interest rates, and sustained foreign investment flows will further support the favorable outlook for the manufacturing sector. “But still, risks to production growth are anticipated with the possible occurrence of La Niña by the end of the year and the potential recovery of oil prices,” he said. The double-digit growth in April marked the third time this year that manufacturing output posted double-digit growth. In January the Volume of Production Index (VoPI) posted a growth of 36.4 percent, but this slowed to 12.8 percent in February and 8.9 percent in March. Esguerra said the manufacturing sector’s growth benefited from the robust machinery production, food manufactures, transport equipment, printing and export-oriented goods. “Some of these can be attributed to election-related activities and strong domestic consumption,” Esguerra said. There were six out of the 13 major sectors that posted double-digit growth in April. These were led by the VoPI in machinery, except electrical products, which posted a growth

of 43.9 percent. The production output in machinery, except electrical products, has been increasing steadily from 14.1 percent in January to 22.3 percent in February and 30.4 percent in March. Other sectors that posted doubledigit growths were miscellaneous manufactures at 40.7 percent; printing, 33.5 percent; food manufacturing, 27.1 percent; transport equipment, 23.5 percent; and basic metals, 18.8 percent. Meanwhile, in terms of the Value of Production Index (VaPI) for the manufacturing sector, it posted an annual increase of 6.8 percent, from a 6.4-percent decrement during the same month last year. “The increase was brought about by the expansion in VaPI of 14 major sectors with significant increases,” the Philippine Statistics Authority said. These were led by miscellaneous manufactures, which posted a growth of 49.7 percent, followed by printing, 32.3 percent and food manufacturing, 28.4 percent. Other sectors that posted high growth in April were transport equipment, which grew 23.9 percent; machinery, except electrical, 18.7 percent; and beverages, 11.9 percent. Meanwhile, the manufacturing sector’s average capacity-utilization rate was at 83.4 percent in April, the same rate it posted in March. “Current initiatives to sustain the strong performance of the manufacturing sector and to enhance the capacity of industry to be the main growth driver of the economy must be continued,” Esguerra said. These initiatives include the

ICTSI, ATI decry BOC move to ‘railroad’ approval of IRR of new customs law

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ort stakeholders protested on Friday the “haste” at which the Bureau of Customs (BOC) sought the approval of the draft implementing rules and regulations (IRR) of the Customs Modernization and Tariff Act (CMTA). Customs Commissioner Alberto D. Lina presided over a public hearing on the IRR on Friday, despite an order from Finance Secretary Cesar V. Purisima to all outgoing officials under the Department of Finance to clear all policy actions with the transition team of incoming Finance Secretary Carlos G. Dominguez III. The hearing was initially scheduled for two days, on June 9 and 10, but the BOC reconsidered and held only a fullday hearing. Asian Terminals Inc. (ATI) and International Container Terminal Services Inc. (ICTSI), the two international freighthandling firms at the Port of Manila, issued separate letters questioning the abbreviated public hearings and the short period allowed for stakeholders to come up with their position papers on the IRR, a news statement said. ATI Executive Vice President Andrew Hoad said in a letter sent to the BOC that ATI objected to the conduct of the public hearing for being “premature, irregular, hasty and violative of ATI’s constitutional right.” He said the promulgation of the IRR, and any proceeding leading to it, including the hearing, should only take place after the effectivity of the CMTA, which

Editors: Vittorio V. Vitug and Max V. de Leon • Saturday, June 11, 2016 A3

is “not earlier than June 14, 2016.” Hoad noted that “when the bill was approved in both houses of Congress, there were two versions, one for each house. It was only after the CMTA was signed by the President [Aquino] and after its publication in the official gazette [around June 6 and 7, 2016] when the public had access to the consolidated version that is the CMTA now.” “At the very least, therefore, ATI and other stakeholders are entitled to that 15-day notice period before the law becomes finally effective, which is its full opportunity to be informed, to review the new law as signed and assess its impact on its business and activities,” he added. Hoad said the CMTA should take effect only on June 14 and “no earlier than that, assuming it was published upon approval of the President on May 30, 2016.” “It is only upon the effectivity of a law that legal rights and obligations become available to those entitled by the language of the statute,” he said. ICTSI also sent a letter to the BOC seeking a series of public hearings on the provisions of the CMTA, which it noted was a law composed of 1,805 sections. “We strongly recommend that the next public hearing be conducted at least three weeks from today and that the stakeholders, including our company, be granted the same period of time to submit our comments on the draft IRR,” ICTSI Regional Legal Manager

for Asia Pacific Lirene Mora-Suarez said in the letter. “With all due respect to the bureau, should our request be denied, please consider this letter as our formal protest in the haphazard and unreasonable speed by which this present Bureau of Custom’s administration is trying to pass and issue the CMTA’s IRR, notwithstanding the change in administration in 20 days,” she said. Stakeholders noted that the notice for public hearings on June 9 and 10 were sent to the relevant sectors only on June 6 after 5 p.m., with an attached copy of the CMTA but without the draft IRR. The hearing was, however, held only for a day, instead of two days. Position papers on the CMTA, which is composed of 1,805 sections, were required to be submitted on June 8, which means that the review of the CMTA was limited to less than 48 hours. The draft IRR was only distributed on June 9, and consisted of more than 150 pages, which was the topic of Friday’s hearing that started at 8 a.m. Stakeholders added that the BOC informed the participants of the hearing about the venue and time after the IRR was distributed. Also since the venue and time of the public hearings were only announced to days prior, stakeholders complained that efforts to encourage other interested parties to attend the hearing were hampered.

Flag lady

Ms. Luningning Tan-Gatue, 89, of Atlas Super Flags in Santa Cruz, Manila, lovingly puts finishing touches to a Philippine flag her company created, as the nation prepares for the commemoration of the Philippine Independence Day on Sunday. Roy Domingo

simplification of costly regulatory and bureaucratic procedures, close monitoring of industry road maps. These also include the augmentation of public and private investments in research and development. Likewise, the Volume of Net Sales

Index posted a growth of 5.3 percent in April, from 1.3 percent last year. Also, the Value of Net Sales Index returned to positive territory of 1.8 percent, from a 6.8-percent decline in the same month in 2015. The Missi provides timely flash

indicators that monitor the performance of growth-oriented industries in the manufacturing sector. The earliest version of the Missi is the Survey of Key Enterprises in Manufacturing, which was created in 1981 as a project of the Neda.

A4 Saturday, June 11, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Philippine election spending: A disgrace

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N May 2015 voters in the United Kingdom went to the polls to elect 650 members of the British parliament. Four major political parties and literally dozens of minor parties placed candidates who stood for election. The total campaign spending converted to Philippine pesos was less than P3 billion. At home, prior to the beginning of the official campaign season for the 2016 national elections, presidential, vice-presidential and senatorial aspirants spent P6.7 billion on television, radio and print ads from March 2015 to January 2016. To compare the Philippine elections to that of the UK is, of course, inaccurate as that is a parliamentary election where voters actually vote for the political party and are not concerned who the individual candidate might be. However, to spend the amount of money that Philippine candidates spend to be elected in a nation, where countless thousands of Filipino children go to bed hungry each night, is a disgrace. No, it is more than a disgrace. It is immoral and obscene. The vice-presidential candidates spent a combined P1 billion to be elected to an office that, at best, might perform a Cabinet-level function. The winning candidate spent in excess of P400 million to gain an office with a budget of less than P250 million. And these amounts are only the “official” numbers. Who knows how much was actually spent. The contention that this is private money, rather than public funds, does not make this spending any less improper. There was a huge controversy when thenPresident Gloria Macapagal-Arroyo and her entourage spent P960,000 for dinner in New York paid for with private money. “The extravagance is a manifestation of the Arroyo administration’s insensitivity and hypocrisy while thousands of families suffer hunger,” said one politician, who just spent P463 million in losing the presidential race. We are told that election spending is good for the economy. Nonsense. What sustainable economic benefit comes from campaign materials? In fact, the only economic winners are the Chinese T-shirt manufacturers, advertising on the Alibaba web site, “Perfect for election campaigns.” They are not talking about Chinese elections. The Philippine Center for Investigative Journalism estimates the P6.7-billion preelection advertising could have built 23,000 permanent housing units for Supertyphoon Yolanda survivors and 13,000 public-school classrooms. For the 2016 campaign, presidential and vice-presidential candidates belonging to political parties could spend up to P557.4 million. If we really want to have a positive economic impact, let’s raise that limit to P5 billion each. Then all Filipinos could have a new T-shirt or even two. If there was any sense of decency, members of the Senate and the House of Representatives would be working on new laws to limit this campaign-spending excess. The UK campaign period is only six weeks long. Could the Philippines’s be shortened? No elected or appointed government official should ever be allowed to appear in any advertisement one year before an election, even if that commercial is for laundry soap, let alone to promote their agency or function. Campaign donations should be reported as received not after the elections. Our election spending is wrong and should be changed. It is up to the politicians to do the right thing.

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OUTSIDE THE BOX

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HERE is one subject on which I am an expert—Japanese food. Perhaps, you are also. We, among all the rest of the mortals who inhabit this planet, can tell the difference between “fried shrimp” and “shrimp tempura.” The former is served at the “largest buffet in the Philippines.” The latter comes from a restaurant that will remain nameless, which is a portal to the kitchen of the Tempura god on the slopes of Mount Fuji.

But I need your help with this question. Which is better: a fivepiece gyoza plate for P125 or three pieces for P320? Maybe to answer the question sensibly, you will want to know the size, ingredients used, the recipe and the actual preparation method. Fair enough. But what if all those factors were exactly the same? What’s the answer? Obviously, financial ratios are the most important method of evaluating the quality of a company’s

finances and potential profitability. Having to pay for too much debt service damages the bottom line, even if the “top line” of revenues is good. Low profit margins can mean a company is working very hard for very little money. However, any ratios that show a relationship between company internals, like hard asset value, sales, or profits to the stock price, is a useless exercise. It is a myth, not unlike early explorers and sailors mistaking manatees for beautiful

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ADDRESS: 3rd Floor, Eternal Plans Building, Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995 n DWQA -92dot3 HOME RADIO LEGAZPI E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal Street, Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992 n DWQJ -95dot1 HOME RADIO NAGA E-MAIL ADDRESS: homenaga@yahoo.com ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

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women. Female manatees breastfeeding their young on the surface were probably thought to be fat, ugly mermaids. If stock-price ratios, like price-toearnings (PER), price-to-book value and price-to-sales, had any value, there would have to be a standard. Female manatees have breasts similar to a human female. But that standard falls apart on closer examination. All stock-market investors should buy at a low “price to whatever” ratio and sell when it becomes too high. A high-flying local stock has a PER of 250 and commentators are concerned the price is too high. But was the price too high when the PER was only 100 or even 50? Except the price is up 600 percent since when the PER was still “normal”. Was Facebook Inc. stock overvalued at $18 and the PER was 7,930 or is it overvalued now at $118 and the PER is 73? But investors are all crazy because they do not follow the “rules” of the price valuations. That’s the problem. Eventually, common sense will return to the markets and the “bubbles” will burst, we are told.

To a sailor having spent six months in the middle of the ocean, a female manatee was, perhaps, the most beautiful “woman” on earth. It is all a matter of perspective. Based on the ratio of the yield of a 10-year US government bond (1.67 percent) and the cash dividend yield (2.07 percent) of the S&P 500 stock index, the US stock market has not been this undervalued since before World War II. That income ratio is now 0.5 and stock prices tend to “crash” when the ratio goes above 2, meaning, at that point, you make more money buying government bonds than buying stocks for the cash dividend. Stock-price valuations are only valid when compared to other investment choices not in relation to the company financials. Five pieces of gyoza for P125 is better if you are broke and hungry no matter the comparative “quality.” Buy Philippine stocks. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Why oil prices and power rates keep on rising

Lorenzo M. Lomibao Jr., Gerard S. Ramos Lyn B. Resurreccion, Efleda P. Campos

Online Editor Social Media Editor

Chairman of the Board & Ombudsman President VP-Finance VP-Corporate Affairs VP Advertising Sales Advertising Sales Manager Group Circulation Manager

Stock-price valuations are a myth

Cecilio T. Arillo

DATABASE Continued from A1

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HAT happened after the bill became a law (Republic Act 9136)? Instead of the rates going down as promised, the rates went up, triggering a public outcry.

Sen. Juan Ponce Enrile strongly voted against the Epira when it was finally approved on June 4, 2001. “I knew that the Epira would not benefit the people. I went against it because I realized that it would legalize and justify the imposition of unwarranted financial burden on the people under the so-called power purchase agreement [PPA], or ‘universal levy,’ as the Epira would later call it,” Enrile said. Indeed, Enrile wrote President Arroyo on March 7, 2001, to warn her about the harmful provisions of the Epira, calling her attention to the market control and monopoly of Manila Electric Co. (Meralco) over a huge portion of the power industry, especially the exploitation of Meralco electric consumers. “I pointed out to her the injurious effect of giving Meralco and other distribution companies the same right given to the National Power Corp. [NPC] to charge electric consumers for stranded losses on bilateral contracts with independent power

producers [IPPs],” Enrile recalled. “I especially warned her regarding the danger to the electric consumers posed by stockholders, like the Lopezes and their associates, who have interest both in the generation and distribution side of the power industry,” he said. The Office of President Arroyo received Enrile’s letter at Malacañan Palace on March 8, 2001. He never knew, though, whether President Arroyo ever saw his letter. But one thing he knew for sure: he never had the courtesy of any reply. True enough, shortly after the passage of the Epira, her boast to lower the cost of electricity in the country did not happen. Instead, the electric bills of consumers skyrocketed, to the public’s dismay and shock. To placate the enraged public, she announced in a news conference and in a boastful display of make-believe concern for the people that she was “squeezing blood out of stone” to reduce the PPA.

She then ordered the NPC to reduce its PPA from P1.25 to P0.40. This drove the NPC deeper into bankruptcy. “This,” Enrile said, “as we have learned from a report of the American Chamber of Commerce, was a very expensive publicity stunt to be paid for with taxpayers’ money. It turned out that the government had to borrow $500 million to cover the National Power Corp.-PPA reduction that President Arroyo ordered.” For reasons only she would know, she refused to touch Meralco’s PPA from its own IPPs. To make matters worse, Meralco arrogantly refused to honor its 10-year 3,600-megawatt power-supply contract with the NPC. This was to allow Meralco to use the power output of its own IPPs whose prices range from P5.74 to P6.26 to P7.39 per kwh, compared with the NPC’s price of P3.62 per kwh.

Meralco’s megafranchise

THAT time, the Senate and the House approved with unbelievable dispatch the grant of a megafranchise to Meralco. That megafranchise covered an area of 9,337 square kilometers, or 3,647.3 square miles, where a quarter of the country’s entire population live in 22 cities and 89 municipalities. The original area of Meralco, before the Lopezes sold and transferred it to the Meralco Foundation in the 1970s, was 1,018 square miles, embracing only seven cities and 40 municipalities. The megafranchise bill breezed through Congress despite Meralco’s

dismal record as a public-service utility and glaring evidence of its abuses, excessive PPA charges, its sweetheart deals with its own IPPs and shenanigans in its return on rate base. The Supreme Court later ruled with finality that Meralco has been illegally passing on its own income taxes to its hapless customers. Meralco promptly replied that it will go bankrupt if it refunds the billions of pesos it has legally exacted from the public. That Meralco is in dire financial straits as it claims, while its affiliate IPP, like First Gas, end up among the country’s most profitable corporation, is a classic demonstration of the evils of cross-ownership, which the Epira promised but failed to curb. Undoubtedly, the PPA or universal levy, or whatever name they now call it, is antipeople. It makes the people pay for electricity they have not used. It makes the cost of electricity exorbitant. It makes the country uncompetitive in the world market. It deprives the poor and the jobless of an opportunity to find employment, because the high cost of electric power will mean fewer investments and, therefore, fewer jobs. Undoubtedly, next to national security and public safety, the energy industry is arguably the most challenging sector of the Duterte administration because energy, like the former, has also a correlation to the economic life of the nation.

To reach the writer, e-mail cecilio.arillo@ gmail.com

Opinion BusinessMirror

opinion@businessmirror.com.ph

A whistle for Presidentelect Rodrigo Duterte

Caritas Manila’s YSLEP Telethon for Education raises P5.2M Rev. Fr. Antonio Cecilio T. Pascual

SERVANT LEADER

Jemain Tinio Diaz de Rivera

FORWARD MOVING

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ECENTLY President-elect Rodrigo R. Duterte whistled at a female broadcast journalist, Mariz Umali of GMA 7, during a news conference. His action surprised many. Most expected a more mature behavior from a leader.

Not to excuse his action, which I think was the least presidential, whistling almost always brings back memories of my childhood days. After a hard day’s work, my father would start whistling the same happy tune when he walked from the gate to the entrance of our home, and he would only stop when my sister and I ran into his arms searching for our gift. At times it would be a book, food or tools for the house. The gift would often be a basic need at home, school or church. Tomorrow is Philippine Independence Day and my wish is for Duterte to whistle out to each and every Filipino— man, woman and child—as he ends each day during his term. The whistle would be a signal that his administration would have successfully provided for much-needed security, infrastructure, education, work and basic necessities for a better life. Duterte and his Cabinet should only whistle if they are able to do their job. The Cabinet includes Salvador Panelo, Salvador Medialdea, Leoncio “Jun” Evasco Jr., Jesus Dureza, Jose Calida, Michael Dino, Hermogenes Esperon, Perfecto Yasay Jr., Arthur Tugade, Mark Villar, Fortunato de la Peña, Martin Gierran, Mike Sueno, Catalino Coy, Ronald de la Rosa, Vitaliano Aguirre, Leonor Briones, Jaime Morente, Nicanor Faeldon, Isidro Lapeña, Silvestre Bello III, Judy Taguiwalo, Benjamin Diokno, Alfonso Cusi, Carlos Dominguez III, Rafael Mariano, Ernesto Pernia and Ricardo Jalad Duterte will be sworn in at the end of this month. Filipinos hope that with him as President, the economy will further grow and the country will prosper, and that they will eventually receive the economic benefits they have long been working for. Filipinos voted for Duterte, and he selected his Cabinet members. They promised to work on crime, drugs and development in infrastructure. The government has been encouraging investments outside Metro Manila, such as Bacolod City, Davao City, Iloilo City, Metro Cebu and Metro

Clark. With the rapid growth of the Philippine economy, different industries need good infrastructure, such as communication, Internet connectivity, transportation and airports. nnn THE government is looking into the development of a new international airport to address the growing number of passengers served by the Ninoy Aquino International Airport (Naia). With no sufficient parking space for airplanes, the Naia is experiencing airport congestion and traffic. With the continued increase in the number of people traveling by plane, Omni Aviation, the leading Philippine flight-training school operating in Clark, said there is a high global demand for pilots with world-class pilot training. The facilities available at Clark should be maximized to decongest the Naia and fully service the growing international and local fights for the benefit and convenience of business travelers and tourists. nnn BUSINESSMEN in manufacturing and the information technology and business-process management still have their eyes on the further development of the Clark Economic Zone. The provision of easy and affordable transportation to Clark International Airport and the business center—through the North Luzon Expressway, Subic-Clark-Tarlac Expressway and the Tarlac-PangasinanLa Union Expressway—has shortened the travel time. nnn FILIPINOS are hard working and patient. They are forgiving. They are a happy race. Filipinos deserve a president who can provide them with an environment where they can work, live and worship in peace, and have the opportunity to prosper. Duterte and his Cabinet also have to work hard. They will most certainly make mistakes but hopefully set things right to bring home the pasalubong for the nation. For the good of the country, I hope each night he and his Cabinet members whistle.

Britain’s great EU debate hasn’t been so great

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PINION polls say Britain’s vote on June 23 on whether to leave the European Union (EU) will be close. That’s disturbing: Voting to stay is the safer, wiser choice. The referendum debate should have promoted consensus on the point—but it hasn’t, partly because the quality of discussion has been a letdown. Campaigners on both sides of the debate have claimed that a complex issue is really pretty simple. The government-led Remain campaign says Brexit would be a catastrophe; the Leave campaign says it would be the dawn of a new golden age. Both campaigns have confused voters, inflamed prejudices, muddled the facts— and changed few minds. The intelligent debate that was needed hasn’t happened. So much for direct democracy. The Leave side has been the worse offender, often brazenly misrepresenting the most basic facts. Former mayor of London Boris Johnson, a leading Brexit spokesman, said EU law banned children under 8 from blowing up balloons, prohibited the recycling of tea bags and limited the size of coffins. The chairman of a parliamentary committee exposed all this as fiction in a March hearing. The Leave campaign’s claim that the EU has “given Turkey the nod” to become a full member no doubt appealed to voters alarmed by immigration, but it’s misleading at best. Turkey was declared eligible to join the EU in 1997, but negotiations are still at an early stage and all members will have to agree before they conclude—so the UK has a veto. Justice Secretary Michael Gove, another leading Leave campaigner, said leaving the EU would allow Britain to “take back the £350 million we give to the EU every week.” That’s wrong,

Saturday, June 11, 2016 A5

A

S of Friday, June 10, 2016, through your generosity and kind heart, Caritas Manila raised more than P5.2 million through Caritas Manila’s Telethon 2016 held recently in partnership with Radio Veritas 846. This year’s Caritas telethon focused on “Poverty Reduction through Education,” as it aimed to raise public awareness on what we— as a church—can do in reducing the rate of poverty, one of the most rampant problems in the country. Funds raised will be used to support almost 5,000 scholars

too. The figure ignores the rebate the UK gets upfront, as well as the other payments and grants Britain receives. And Gove’s claim that leaving the EU would boost spending on Britain’s National Health Service was so egregious that that it caused one Leave supporter and Tory MP to defect. Worst of all, the Leave side has failed to say what Brexit would mean—starting with the trade arrangements that would be needed to replace Britain’s rights and obligations as part of the EU. The Leave campaigners are divided on this, so uncertainty is all they can offer. Such a weak campaign should have been easy to defeat, but the Remain side has made no progress in the polls since the debate began. That’s partly because it has relied too much on scaremongering. Prime Minister David Cameron’s May 9 suggestion that leaving the EU would threaten peace and stability in Europe was greeted with incredulity. The Remain campaign has used the same kind of hyperbole when it comes to the economy. The economic risks of exit are real—study after study has made this clear—but the idea that Britain would be doomed if it left isn’t plausible. Life in Switzerland goes on, somehow. (And if the government thinks Britain would be crazy to leave, voters might wonder why it called a referendum in the first place.) The Remain campaign has failed to address voters’ concerns over immigration and has been suspiciously quiet about the further reforms that Europe needs if the union is to work well for its citizens. There’s every chance of a surge of support for the status quo as the June 23 vote approaches. One must hope so: Voting to stay is the right choice. But it’s a shame the referendum campaigns have done so little to help voters think clearly and choose wisely. Bloomberg View

under the Caritas Manila’s Youth Servant Leadership and Education Program (YSLEP). YSLEP is one of the Church’s responses to poverty reduction. YSLEP is the flagship program of Caritas Manila, which extends financial assistance to poor but deserving youth, trains and hones them not only for academic

excellence but also to become servant leaders and good members of the community. To date, Caritas Manila has produced over 10,000 graduates and continues to provide educational assistance, values-formation workshops and leadership trainings to almost 5,000 students nationwide, with an average of 300 college and technical/ vocational graduates yearly. It only takes P2,100 a month (P25,200 a year) to support a scholar and help him or her to finish college. Also, there is a 98-percent chance that a household gets out of poverty when there is a college graduate in the family, according to Family Income and Expenditure Study in 2009. Caritas Manila is the Archdiocese of Manila’s lead social services and development ministry. Apart from YSLEP, Caritas Manila runs

diverse projects that help the poor fulfill their human potential, such as the All is Well Health Program, Restorative Justice Ministry, Caritas Damayan, and social- entrepreneurship programs Caritas Margins and Segunda Mana. Caritas Manila continues to accept donations for YSLEP. Please call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 09054285001 and 0929-8343857. To know more about the YSLEP and other programs of Caritas Manila, visit www.caritasmanila.org.ph. To know more about Caritas Manila, visit www. caritasmanila.org.ph. For your donations, call our DonorCare lines 563-9311, 564-0205, 0999-7943455, 0905-4285001 and 0929-8343857. Make it a habit to listen to Radio Veritas 846 in the AM band, or through live streaming at www.veritas846.ph. For comments, e-mail veritas846pr@gmail.com.

(Nuclear) Power to the people

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NLOVED and underappreciated, America’s nuclear reactors supply almost two-thirds of the country’s low-carbon energy—reliably and without harm to human health or the earth’s atmosphere. Nuclear is the biggest, sturdiest force against climate change there is. It is also threatened by market forces and shortsighted public policy. If energy costs accurately reflected the price of carbon, nuclear would be competitive. They don’t, and it isn’t, but there are other ways governments can make the energy market fairer and cleaner. One problem for nuclear is the extraordinarily low wholesale price of electricity —held down for now by cheap, abundant natural gas, and intermittently pulled lower when wind power floods the grid. Wind generators, buttressed by a $23-permegawatt-hour production tax credit, can withstand even negative wholesale prices. Natural gas- and coal-fired plants can simply stop operating when there’s a glut, preserving fuel. But it’s not easy to turn a nuclear plant on and off, and in any case it saves nothing on operating expenses. That’s why nuclear’s best business model is to run at practically full capacity 24/7—and why the sector now faces such crippling losses. Every time a nuclear plant closes— the latest to be added to the kill list are two in Illinois operated by Exelon Corp., which together have lost $800 million over the past seven years—its power is replaced mainly by natural-gas plants. To the extent that wind or solar (which account for only a small fraction of the US energy mix) can make up for lost nuclear energy, their emissions-lowering potential is wasted: They’re standing in

for an energy source that’s already perfectly clean. And once a nuclear plant is closed and its fuel is removed, relicensing and reopening it would be a difficult and expensive proposition. A well-designed carbon tax would even the playing field. But lawmakers in Congress hate the idea so much, they’re proposing to hold a vote simply to say so on the record. And while several northeastern states participate in a regional cap-andtrade program, the price it sets on carbon emissions is too low to make a difference for nuclear. States have another way to recognize the value of nuclear power, however: by including it in their goals for clean-energy generation. More than two dozen states have so-called renewable portfolio standards, which set targets for increasing reliance on wind, solar, geothermal and other forms of renewable energy. California

and New York aim to draw 50 percent of their power from renewables by 2030. For historical reasons, including a stubborn antipathy toward nuclear power among many environmentalists, states have no such targets for nuclear power. But if they were to include nuclear in their energy goals—setting “ low-carbon portfolio standards”—they would be able to raise their clean-energy targets. Utilities would then be required to buy some nuclear energy, allowing the sector to compete. There are also more tangible reasons for politicians to support nuclear power: Plants support hundreds of relatively high-paying jobs, and nuclear helps keep consumer electricity prices low—especially when the price of natural gas inevitably rises again. The case for nuclear power rests on its unmatched capacity to provide energy that is dependable, affordable and, above all, clean. Bloomberg View

A6 Saturday, June 11, 2016 • Editor: Dionisio L. Pelayo

The Nation BusinessMirror

news@businessmirror.com.ph

Lawmakers warn of drastic rise in number of dropouts

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By Jovee Marie N. dela Cruz @joveemarie

AWMAKERS on Friday warned the government of an impending crisis on access to education amid tuition increase and growing concern over the implementation of the K to 12 Program. Senator-elect and outgoing Nationalist People’s Coalition Rep. Sherwin T. Gatchalian of Valenzuela and incoming Party-list Rep. Sarah Elago of Kabataan said a total of 1,536 schools at the basic and tertiary levels have implemented tuition increases. We could have a real educational-access crisis on our hands if the cost of education continues to rise at this exorbitant rate, said Gatchalian, a majority member of the House Committees on Basic Education and on Higher Education during the just-adjourned 16th Congress. The Commission on Higher Education (CHED) has approved tuition hikes in 304 private universities and colleges, while the Department of Education (DepEd) approved tuition increases in 1,232 private elementary and high schools. Gatchalian also questioned the propriety of approving tuition hikes at the high-school level amid reports indicating that less than 30 percent of the expected 1.3 million early registrants for

Grade 11 have enrolled, just four days before the first day of classes on Monday, June 13. “The government must reconsider the wisdom of imposing additional costs on education at a time when the public is not yet confident about K to 12. The positive benefits of the K to 12 reform will be negated if it results in a mass exodus of students, whose families simply cannot afford to send them to school anymore,” Gatchalian said. Earlier, outgoing Party-list Rep. Terry L. Ridon of Kabataan urged President-elect Rodrigo R. Duterte to consider reviewing the implementation of K to 12 Program as “up to a million students have chosen not to continue studying to senior high school.” R idon also expressed fears that thousands of students may not even be able to be there when classes begin on June 13. “In 2015 DepEd originally reported to Congress that 2 million to 2.4 million students will enroll in Grade 11. But only 1.5 million students turned up. This

A man sits forlorn in his customerless food cart near parked school-service vans in a street in Quezon City. He expects his business to drastically improve when the school year starts on Monday. ALYSA SALEN

means, at the very least, some half a million—possibly even a million—have opted to drop out,” Ridon said. “Of the 1.5 million enrollees, a million students have enrolled in public senior high schools, while close to 500,000 have enrolled in private senior high schools,” he added. Under the K to 12 Program, a student is required to undergo kindergarten, six years of elementary, four years of junior high and two years of senior high school.

On the other hand, the senior high school program, a student can choose one among four major “tracks”—academic, technicalvocational livelihood, arts and design, and sports. Under the academic track, there are four “strands”—accountancy, business and management; humanities and social sciences; science, technology, engineering and mathematics; and the general academic strand. On Friday the party-list groups Kabataan and Anakbayan, as well

Natl Police reports seizure of ₧13B worth of illegal drugs in 28 months By Rene Acosta @reneacostaBM

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HE Nationa l Police has seized at least P13 billion worth of illegal drugs in the last 28 months as a result of its intensified anti-illegal drugs operations. The force’s Directorate for Operations reported that the P13billion drug haul resulted from a total of 54,886 police operations that were carried out from January 2014 until April 2016.

A total of 85,749 drug offenders were arrested in these police operations, the report revealed. Those arrested are respondents in 71,405 cases filed in court. The police’s antidrug campaign in 2015 posted a 50.56 percent increase in the number of arrested violators of Republic Act 9165, or the Comprehensive Dangerous Drugs Act; and a 46.22-percent increase in the number of cases filed in court. This year, mainly through the efforts of the Anti-Illegal Drugs Group, the National Police hit

the ground running against organized crime groups engaged in drug trafficking. From January to April this year 14,689 drug offenders had been arrested in a total of 9,904 police operations. More notable among the successful antidrugs efforts this year was the interdiction operation on a clandestine methamphetamine hydrochloride, or shabu, laboratory in Angeles City on March 16 that yielded some P50 million worth of controlled substances used in

manufacturing the illegal drug. In April a series of three separate buy-bust operations launched by operating units in Metro Manila netted 99 kilograms of shabu with an estimated street value of P465 million. During the first three months of the year alone, a total of 228.7 kilos of shabu worth P1.065-billion was seized from 18 suspects, mostly Asian foreigners, in nine drug raids and buy-bust operations against middle-level distributors and retailers.

Land reclamation threatens Visayas’s marine ecosystem By Jonathan L. Mayuga @jonlmayuga

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EBU CIT Y—The massive reclamation projects being sought by various project proponents are threatening the marine ecosystems in the Central and Eastern Visayas, ocean conservation advocacy group Oceana Philippines said. Lawyer Gloria Estenzo-Ramos, vice president of Oceana Philippines, said there are at least eight reclamation projects that are in various stages of development in Cebu alone. Oceana Philippines is appealing to the incoming Duterte administration to stop such destructive development projects and, instead, work for the rehabilitation of damaged mangrove and beach forests, coral reefs and seagrass beds to ensure sustainable fish production and prevent biodiversity loss. These projects, that are mostly sought for the expansion of ports and urban areas, are being initiated by local governments in partnership with the private

sector through public-private partnerships. Interviewed at the sidelines of the Ocean Heroes Award coorganized by Oceana Philippines, the Bureau of Fisheries and Aquatic Resources and the Biodiversity Management Bureau, Ramos said these reclamation projects are being implemented even without the necessary permits and a l l-impor ta nt env ironmenta l impact assessment. Oceana is seeking to stop these reclamation projects as part of its advocacy to protect the Tañon Strait Protected Seascape (TSPS) from destruction. An important fishing ground, the Tañon Strait is also home, playground and feeding ground of various marine mammals, particularly dolphins and whales. Fourteen of the 27 species of dolphins and whales can be found at the TSPS. Land reclamation destroys mang rove, seag rass and corals, which ser ve as spawning grounds and nursery grounds of not only small fishes, but other marine mammals, as well as

crabs, says Jimelyn O. Flores, senior marine scientists of Oceana Philippines said. “If we lose these habitats, we cut the cycle of life,” she said, underscoring the need to stop all land reclamation to protect the habitat-forming species from being lost forever. “Now, we may not feel it yet. But its impact will be felt by future generation,” said Flores. Rocky Guzman, of Oceana’s legal and policy team said there are at least 15 proposed land-reclamation projects in various parts of Central and Eastern Visayas. Guzman, who is leading the group’s campaign against illegal dumps and landfills, sought a list of proposed land-reclamation projects being processed by the Philippine Reclamation Authority (PRA) in Eastern Visayas and Central Visayas in the group’s attempt to intervene and seek legal remedy in behalf of the threatened species and marine ecosystems in these regions. Ramos said the land-reclamation projects should be stopped

and she enjoined various stakeholders in Cebu and other parts of the Visayas to help protect marine ecosystem from being irreversibly damaged or destroyed in the name of corporate interests. “Land reclamation can destroy not only habitats but cause irreversible damage to our marine ecosystems. Once these ecosystems are lost, our way of life, our food security are also threatened,” she said. In an earlier interview, Jose Gonzales, assistant general manager of PRA told the BusinessMirror that as far as the agency is concerned, only around 2,000 hectares of coastal areas have been converted as part of various urban expansion projects. Eight massive land-reclamation projects are currently in the pipeline, mostly along Manila Bay and some parts of Metro Cebu. There are hundreds more being applied for by various proponents. The PRA said it only approves landreclamation projects when the target area have been given the green light by the Department of Environment and Natural Resources.

as the National Union of Students of the Philippines stormed the CHED main office to denounce the approval of a new wave of tuition and other fee increases in the country. “The new wave of fee increases are unjustifiable. We consider CHED’s new move to be a criminal act against the welfare of the youth,” Elago said. “We denounce in the strongest possible terms the approval of unjustified fee increases in schools all over the country. The speedy

approval of tuition hikes despite the clear opposition of student groups clearly illustrates the deregulated nature of education in the country in all levels,” Elago added. She said instead of approving tuition hikes, the government should impose a moratorium on tuition increases. Elago also called on the incoming Duterte administration to implement policies that would curtail the spiraling cost of matriculation in the country. “Many parents are forced to enroll their children in private schools to escape the horrors of public schools, such as the lack of facilities and various shortages. Yet, if primary and secondary institutions also continue to increase tuition, students will again be forced to return to public schools, or even drop out of school,” Elago said. “Coupled with the full implementation of the K to 12 Program, the new spate of tuition increases in basic education will surely aggravate the education crisis in the country,” Elago said. For his part, Liberal Party Rep. Ben Evardone of Eastern Samar asked the CHED to recalls its “midnight order” approving the application for tuition increase of private colleges and universities in the country. “For all we know, Duterte might have a different policy on the issue of tuition. I also hope that President-elect Duterte will appoint immediately a new set of CHED to attend to urgent issues on higher education,” Evardone said in a text message.

Fabella management, not DOH, has last say on transfer–Garin By Claudeth Mocon-Ciriaco Correspondent

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R. Jose Fabella Memorial Hospital (Fabella) management has the final decision with regards to the ongoing transfer and modernization of the hospital, the health department said on Friday. “The decisions to proceed with the construction of the hospital’s new building inside the Department of Health compound and to scale down its operations in its present site were made by the management of Fabella. Given the structural weaknesses of the existing buildings, the Fabella management wanted to prevent possible damage to life and property in the event of an earthquake,” Health Secretary Janette P. Loreto-Garin explained. Garin added that the DOH, through the Office of Health Operations, was merely assisting the Fabella management as a response to its request for assistance in proceeding with its transfer and modernization. The transfer of Fabella from its existing site in the Old Bilibid Prison compound to the DOH compound was due to the structural hazards of the existing buildings that may affect the patients, staff and the general public in case of disasters. At present, the existing hospital is operating at 350-bed capacity in an area that is prone to flooding and surrounded by squatters. On January 12 an inspection conducted by ESCA Inc., a private engineering company, revealed that the buildings require immediate strengthening to avoid damage to life and property in the event of an earthquake. On March 2 the Department of Public Works and Highways (DPWH) Bureau of Design concurred with the ESCA findings. The construction of a six-story, 700-bed capacity building inside

the DOH compound has been ongoing since June 2015 and will be completed in May 2017. The total cost has been sourced from the DOH budget with no private counterpart. All beds are intended for patients. The security of tenure of Fabella employees was assured and additional personnel will be hired for the new facility. Garin did not support a previous proposal to have Fabella’s transfer funded under a public-private partnership scheme. She likewise emphasized the disadvantage to the public if a private proponent were allowed to operate the diagnostic center of Fabella, as well as the two other neighboring DOH Hospitals, Jose Reyes Memorial Hospital and San Lazaro Hospital. Garin added: “The DOH will support the call of the Fabella employees to put the transfer of Fabella on hold, as long as the health of the mothers and their babies is not prejudiced and the safety of Fabella health workers will not be imperiled.” “The DOH remains committed to improving the facilities and equipment of Fabella for the hospital to fulfill its mandate as the national maternity hospital. However, the DOH also recognizes that the Fabella management is in the best position to decide what is best for its employees, patients, and other stakeholders,” Garin said. She urged the Fabella management to reach out and engage its stakeholders to resolve and clarify issues surrounding the Fabella transfer and modernization. “I call on the Fabella management to sit down and discuss with affected stakeholders so that proper information is relayed, miscommunication is avoided, and all issues raised are clarified and resolved. The DOH is here to support the Fabella officials, employees and most importantly, its patients,” Garin also said.

Sports BusinessMirror

Editor: Jun Lomibao • mirror_sports@yahoo.com.ph

Saturday, June 11, 2016 A7

ARCHERS-CHIEFS IN FILOIL FINAL

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By Rick Olivares

T will be a De La Salle-Arellano University showdown for the 2016 Filoil Flying V Premier Cup. The Chiefs repelled numerous uprisings by the National University Bulldogs to score a 94-85 victory, while the Green Archers’ three-point shooting held at bay a more spirited stance by the Ateneo Blue Eagles to prevail, 92-77. The final will be at 4 p.m. on Independence Day on Sunday, at the Filoil Flying V Centre in San Juan. With fatigue setting in after playing their sixth match in seven days, including Thursday’s title win in the Fr. Martin Cup, the Chiefs got virtuoso performances from the backcourt duo of Jio Jalalon (34 points, three rebounds and six assists) and Kent Michael Salado (18 points, six assists and four steals) as they held off repeated rallies by NU. Arellano University led almost all throughout the match, surrendering only the lead at 17-15 early in the first period. Zach Nicholls, playing the fireman for the Chiefs, hit a triple to restore their lead. The Chiefs posted 11-points leads thrice, the last at 6251, after a Nicholls lay-up at the 2:59 mark of the third period. The closest NU could get to was at 86-83 after Rev Diputado hit two free throws. Jalalon and Salado scored four points each in the final two minutes against NU’s two points. The Chiefs avenged their 68-65 elimination-round loss to NU and sent them to the championship round of the Filoil Flying V Premier Cup for the first time. Sandwiched between Arellano University’s stint in the Filoil Flying V Premier Cup and Fr. Martin Cup title win

against Adamson University was a pocket tournament in Ormoc, Leyte, that the Chiefs also won against the University of the Visayas. Alfred Aroga led NU with 24 points and 10 rebounds with Reggie Morido and Niko Abatayo contributing 18 and 11 points, respectively. The Green Archers, meanwhile, faced stiffer opposition from Ateneo in a match that was unlike their elimination-round 98-66 blowout victory. With leading scorer Jeron Teng, hobbled by an ankle sprain and Ateneo double teaming center Ben Mbala at every turn, the Green Archers’ other stars came through. Rookie Aljun Melecio drilled five triples, including two consecutive to post a 38-21 lead with six minutes to play in the second period. Ateneo responded with Aaron Black’s nine points to make a game of it. But veteran guard Thomas Torres hit a triple right before the halftime buzzer sounded to give De La Salle a 48-40 lead. In the fourth period, Ateneo threatened once more, but De La Salle power forward Abu Tratter scored 11 points, while Torres hit a triple with 11 seconds left to close out their ninth straight win and enter the finals. Torres led De La Salle with 17 points, while Mbala finished with 16 points and 17 rebounds, while Black and Thirdy Ravena paced Ateneo with 24 and 10 points, respectively. NU and Far Eastern University fight for third place in the juniors on Sunday at 9 a.m., while San Beda and Adamson University duel for the crown at 11 a.m. Ateneo and NU battle for third place at 2 p.m. Tickets to the finals are available at Ticketnet.

VOLLEY CHALLENGE

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HE second leg of the 2016 Tanduay Beach Volleyball Challenge unfurls on Sunday at the multi-court sand lot of the Cantada Sports Center in Bagumbayan, Taguig City. Some 30 teams in both the men’s and women’s division have signed up for the oneday event, including squads from University of the Philippines, Far Eastern University, Air Force, Parañaque and Cebu. Alex Aveda, a referee from Cagayan de Oro, has flown in to supervise in the event, which is part of Philippine Volleyball

Federation President Edgardo “Tito Boy” Cantada’s efforts to bring referees from the different regions to officiate in major events in Manila for exposure. The event is sponsored by Tanduay Rhum, through its president, Lucio “Bong” Tan Jr.

Unbeaten squads go after win No. 4

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EADERS Pocari Sweat and Air Force try to formalize their entry in the semifinal round as they go for win No. 4 against struggling rivals in the Shakey’s V-League Season 13 Open Conference at The Arena in San Juan on Saturday. Unscathed with three victories each, the Lady Warriors take on the winless Baguio Summer Spikers at 4 p.m., while the Jet Spikers tangle with the Laoag Power Smashers at 6:30 p.m. Both matches will be aired live on ABSCBN Sports + Action Channel 23 and on live stream on www.v-league.ph, according to the organizing Sports Vision. Pocari Sweat routed Laoag, 25-21, 2516, 25-17, last week to stretch its win run to three, while Air Force matched that hot start a 27-25, 25-19, 25-17 victory over University

of Korea’ TEXTERS, ACES TAB EX-NBA PLAYERS ‘Soul exhibit about taekwondo on T T

LUCIO “BONG” TAN JR. supports beach volleyball.

of the Philippines last Monday in the seasonopening conference of the league sponsored by Shakey’s. Michele Gumabao has been dishing out big games for Pocari, norming 18 hits in their first three outings while drawing equally solid outputs from Myla Pablo and Elaine Kasilag, who complete the team’s vaunted awesome threesome. Laoag is at 1-2, while Baguio is trailing the eight-team field with a 0-3 card with the duo needing no less than victories to stay in the semis hunt in the single-round robin elims of the tournament backed by Mikasa and Accel. In the Spikers’ Turf Season 2 Open Conference, Air Force (1-1) tangles with Bounty Fresh (0-1) at 1 p.m. Lance Agcaoili

By Joel Orellana

WO former National Basketball Association (NBA) campaigners are spicing up the season-ending Governors’ Cup of the Philippine Basketball Association (PBA), which kicks off on July 15. Jason Maxiell will reinforce Tropang TNT, while Bill Walker, who suited up for Alaska two years ago, is making his second trip to the league and will be joining NLEX. Tropang Texters Head Coach Jong Uichico said the 33-year-old Maxiell, who played for the Detroit Pistons, Orlando Magic and Charlotte Hornets, will arrive on Monday. Maxiell was a key member of the

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Pistons squad from 2007 to 2009 where he averaged 4.7 points and 3.3 rebounds. Walker, who played for Miami Heat before getting waived, will team up with Lebanese guard Rodrigue Akl in the Governors’ Cup, where the 12 teams are allowed to field an Asian import no taller than 6-foot-3. Walker, who is coming off a successful stint in the Croatian league where he helped his team win the title, will arrive on June 26, according to Road Warriors Head Coach Boyet Fernandez. Meralco also inked Iranian guard Mohammad Jamshidi and Allen Durnham. The 6-foot-3 Jamshidi played for Iran in its tune-up game against Gilas Pilpinas on Wednesday.

Barangay Ginebra San Miguel, meanwhile, tapped former Tropang TNT import Paul Harris in place of its original choice, Drew Crawford, who backed out to try his luck in the NBA Developmental League. Harris will plane in on Sunday. Harris had three stints with Tropang TNT and even led the franchise to the 2011 Commissioner’s Cup crown—interestingly against the Kings. Cone added the team is not inclined to tapping of an Asian import. Defending champion San Miguel Beer has Arizona Reid, Star got Marqus Blakely, Blackwater signed up Eric Dawson and Mahindra acquired James White for the conference. GlobalPort, Alaska, Rain or Shine and Phoenix are still negotiating with their prospective imports.

NUEVO, OSADA PREVAIL IN SM BOWLING CUP

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HIRTEEN-YEAR-OLD Norel Nuevo defeated Audi Castro, 235-214, to top the Open Masters finals for Luzon of the Third SM Bowling Millionaire’s Cup 2016 held over the weekend at the SM Bowling Center in Megamall. Nuevo advanced to the finals slot by defeating Khen Abad, 213-184, in the first semifinal match, while Castro booked his finals seat with a nail-biting 195-194 victory over Rowena Cabas. Nuevo topped the eight-game qualifying series with 1,784, followed by Castro (1,720),

ANG TOPS MACAU KICKOFF LEG

HE Philippines’s No.1 karter Jacob Ang pulled the rug from under the best of Asia to rule the kickoff leg of the 2016 Asian Karting Open Championship recently at the Kartodromo de Coloane Circuit in Macau. Ang, 15, was near flawless at the sharp curves to capture both the Formula 125 Open Seniors and X30 classes against the top bets from Macau, Hong Kong and China. Even with the heavy afternoon rains, Ang drove with confidence and was in control throughout. He posted the day’s fastest lap time—on the 18th—of 50.489 seconds. Ang completed the 24-lap final race in 20:21.910 to claim the victory. He finished 4.810 seconds ahead of Macau champion Joao Carlos Afonso. Hong Kong’s Tsang Tsz Him Kim finished third in both Formula 125 Open Seniors and X30 classes, while his compatriot, Lam Cheong Kwan, and Macau’s Wong Man Chon wound up fourth and fifth, respectively, in the Formula 125 Open Seniors, “Jacob definitely showed better maturity, discipline,

DE LA SALLE’S Benoit Mbala loses the ball against Ateneo’s Chi Ikeh as Mbala’s teammate Jeron Teng prepares to go after the loose ball. NONOY LACZA

wits and defensive strategy. But, most of all, he showed a bigger heart to fight for the country’s honor,” his coach Edgen Dy-liacco said. The Philippines also bagged two other titles courtesy of John Dizon and Khazart Romoff of Empire-Red Bull Racing Team. Dizon clinched the Formula 125 Open Juniors and the X30 Junior crowns after topping the Final race 6.347 seconds faster than Eagle Cement’s Eduardo Coseteng Jr. Mikey Jordan checked in third while Bianca Bustamante and Keon Romoff were fourth and fifth, respectively. Romoff ruled the Formula Cadet class over Inigo Anton and third placer Johary Suba.William Go and Miguel Angeles checked in fourth and fifth, respectively.

Cabas (1,699) and Abad (1,694) respectively. Nuevo made up for her earlier loss in the semifinals of the Classified Masters where she finished third. In the Classified Masters finals for Luzon also at Megamall, Bien Lozada finally nailed his first title by defeating Nelia Santos in the final match, 217-182. Lozada, who finished second in last month’s Open Masters finals, also topped the eight-game qualifying series with 1,630. He reached the championship with a 210-192 thrashing of Khen Abad, while Santos subdued Open Masters champion Norel

Nuevo, 231-199, in the other semifinal. In the Visayas-Mindanao finals held at the SM Bowling Center Cebu, Emi Osada became the first double winner of the tournament by capturing both the Open Masters and Classified Masters crowns. Osada first captured the Classified Masters title when she beat Ging Francisco, 199161, in the title match. Osada then captured her second title the next day by topping the Open Masters (Vis-Min) division with a 219204 victory over Ronan Barredo.

HE Korean Cultural Center of the Philippines (KCC), in association with Taekwondowon Park and Philippine Taekwondo Association (PTA), is staging an exhibit, dubbed Soul of Korea: Taekwondo, that started on Thursday and will end on August 19 at the KCC Exhibition Hall in Taguig City. The exhibit is one of KCC’s programs to promote their culture and taekwondo to Filipinos. It also features various types of materials and technologies used in the sport, such as electronic protectors, sandbag kicks and sorts of uniforms. An Experience Zone and Photo Zone will also be available for guests to try the contact activity. The PTA will also conduct taekwondo demonstrations. “We hope that through this exhibit, more Filipinos will express their interest in learning taekwondo,” KCC Director Oh Choong Suk said. “It is the first exhibit for taekwondo in the Philippines, and I hope that this exhibit will help more locals to understand and be interested with the sport,” PTA Chairman Hong SungChon said.

NOT even a downpour could dampen Jacob Ang’s campaign.

Sports BusinessMirror

A8 Satur

day, June 11 , 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

KERR: THEY WERE SOFT P By Tim Reynolds

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The Associated Press

LEVELAND—Steve Kerr has a certain charm that belies a clear toughness. The coach of the Golden State Warriors is someone who famously got into a fistfight with Michael Jordan as a player, and got into a fistfight with a clipboard earlier in these playoffs. Jordan didn’t break. The clipboard did. Point is, when pushed Kerr will push back, whether it’s against a teammate who just may have been the greatest player that the game has ever known, or against an inanimate object used by coaches to draw up plays during time-outs. And when he blasted his own team after Game Three of the National Basketball Association (NBA) Finals by calling them soft—a term that players generally take as a major insult—no one objected. “Because we were,” Warriors star and twotime reigning NBA Most Valuable Player (MVP) Stephen Curry said. Kerr didn’t have to say much more to make his point after Golden State fell behind by 20 in the first quarter of Game Three on the way to a 30-point defeat. And the Warriors insist they’ll play differently on Friday night, when they visit the Cleveland Cavaliers in Game Four of The Finals. Golden State leads the series, 2-1, and knows a win on Cleveland’s home floor on Friday would set up a chance for the Warriors to have a

Steve Kerr blasted his own team after Game Three of the National Basketball Association Finals by calling them soft—a term that players generally take as a major insult—and no one objected.

repeat-title-clinching opportunity before their raucous fans in Oakland on Monday. “I mean, Coach is right,” Warriors guard Klay Thompson said. “And anytime a team goes up 33-14 on you in the first quarter, that’s pretty soft of us. Obviously, give them credit. They got some incredible shot-makers and they came out with a sense of desperation. But we can’t expect to just show up here. That’s on us. That’s on our starting lineup. But we’ll respond.” STEVE KERR has a history of making all the right moves. AP

Kerr could become the second person in NBA history, joining only the Minneapolis Lakers’ John Kundla in 1949 and 1950, to win titles in each of his first two seasons as a head coach. He’s two wins away from being the 14th coach in NBA history to win two rings, two wins away from a seventh ring in all, having won five as a player with the Chicago Bulls and San Antonio Spurs. He was a sharpshooter as a player, then transitioned into showing off sharp wit as a broadcaster and still does so as a coach. He often quotes or paraphrases San Antonio Coach Gregg Popovich, and even seemed to mimic the longtime Spurs boss—who notoriously hates the in-game sideline interviews that occur in nationally televised contests—when he spoke with ABC’s Doris Burke after the first quarter of Game Three on Wednesday. Burke’s question: “You were expecting an aggressive Cleveland squad. What did you see in response from your guys?” Kerr’s response, offered with a smile: “Not a whole lot.”

He walked away. Interview over. Nothing more needed to be said, anyway. It would be incorrect to say Golden State escaped adversity this season. The Warriors set an NBA record with 73 regular-season wins, have the MVP in Curry, the coach of the year in Kerr, all that suggesting their season was easy. It wasn’t. Kerr missed about half the year while recovering from back surgery, the Warriors appear to buckle at times down the stretch from the strain of chasing the league’s best all-time record, they dealt with Curry being injured early in the playoffs and needed to win three elimination games over Oklahoma City (the series where Kerr shattered his clipboard) just to get out of the Western Conference finals alive. He made all the right moves last year, a lineup change after the first three games of the 2015 Finals against Cleveland turning the tide and helping the Warriors turn a 2-1 series deficit into a trophy celebration after six games. There’s whispers now another lineup change might come on Friday, and Kerr won’t fear repercussions if he does make moves. “You never have to worry about egos and feelings, not with our team,” Kerr said. “Our guys are all understanding that you go with whatever the best lineup is, and top to bottom, our team is professional and supportive of one another.” That’s the way he was as a player, and that’s what he’s insisting on as a coach. It’s a formula that’s clearly working.

SHARKS STAY ALIVE ITTSBURGH—There’s very little flash to Martin Jones. The San Jose Sharks goaltender speaks in a polite monotone, only too eager to deflect attention elsewhere. Call it a reflex action honed from years spent wearing a mask while intentionally standing in the way of a puck often fired at high speed. Only this time he couldn’t get out of the spotlight. Not after spoiling Pittsburgh’s longawaited house party with 60 minutes of the best hockey of his life. The Sharks and the understated guy in net are heading back west for Game Six. So are the Penguins. The Stanley Cup, too. Blame Jones, who turned aside 44 shots in a 4-2 victory in Game Five on Thursday night. Outplayed but not outscored, San Jose heads home with a chance to even the best-of-seven series at 3-3 on Sunday.

“Jones bailed us out tonight,” San Jose defenseman Justin Braun said. Repeatedly. Their breakthrough season on the line after spending the better part of four games chasing—but not quite catching—the relentless Penguins, the Sharks responded by jumping on Pittsburgh rookie goaltender Matt Murray early then relying on Jones late. Not that he wanted to talk about it, not even after becoming the first goaltender in the expansion era to win two games in the final while making at least 40 saves. “I don’t know, I felt good tonight,” Jones said. “I thought our [defense] did a good job in front of the net and we got a few bounces tonight.” His teammates knew better. San Jose still has a chance to become the second team in National Hockey League history to claw out of a 3-1 deficit in the final because Jones refused to serve as doorman for a coronation for Sidney Crosby and company. AP

Three share lead in St. Jude Classic

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HAWN STEFANI, Tom Hoge and Seung-yul Noh shared the FedEx Saint Jude Classic lead at five-under 65 on Thursday. Little wind and perfect though fast greens created near-perfect scoring conditions at the TPC Southwind. Some extra rough requiring tight shots also provided a good test for players preparing for the US Open next week at Oakmont in Pennsylvania. Hoge had a bogey-free round with five birdies in the morning group. This is only the second time Hoge has played the event, but he has qualified for the US Open twice in Memphis and tied for 12th at Southwind last year. Dustin Johnson, the 2012 champion, was in the group at 66 with Steve Stricker, Jamie Donaldson, Colt Knost, Brian Gay and Miguel Angel Carballo. Retief Goosen, Scott Stallings and Justin Leonard—a two-time champ here—all shot 67s. Henrik Norlander of Sweden had a share of the lead with two holes to play among the final players on the course. AP

TOM HOGE and two others shoot a five-under 65 on the first day.