Businessmirror june 17, 2016

“The real muslims will never accept the filthy ways of the west.”—Orlando nightclub gunman Omar Mateen wrote in a Facebook post, according to a US Senate committee letter. AP

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2015 environmental Media Award leadership award 2008

“Media fell all over themselves criticizing what Donald Trump ‘may have insinuated about @POTUS.’ But he’s right.”—Donald Trump, in a post on Twitter accusing President Barack Obama of putting US enemies ahead of America’s own people. AP

“Of course, the family was distraught, but also I believe somewhat relieved that his body was found intact.”—Orange County (Florida) Sheriff Jerry Demings, after the body of a 2-year-old Nebraska boy, who was snatched off a Walt Disney World beach by an alligator and dragged underwater, was recovered. AP

BusinessMirror A broader look at today’s business

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Friday, June 17, 2016 Vol. 11 No. 251

PLDT, GLOBE SEAL PEERING AGREEMENT TO IMPROVE INTERNET SERVICES

Interconnection signals new era in telco industry

W

INSIDE

@lorenzmarasigan

hat the telcos should have done half a decade ago to improve the state of the Internet in the Philippines was cooked up in a matter of months, and was served on Thursday.

nissan navara: Going sporty

motoring

By Lorenz S. Marasigan

A new era in the Philippine telecommunications industry arrived, with rival carriers PLDT Inc. and Globe Telecom Inc. agreeing to interconnect their Internet networks to exchange data traffic more efficiently.

While this is indeed a welcome development, as this would pave the way for faster information transfer from one provider to another, industry experts believe this should have materialized earlier.

See “Interconnection,” A12

E1

Teddy Locsin Jr.

free fire

A

MERICA is many things that make a country great.

But pioneering is not one of them. It is not the first pioneer nation. The Visigoths were, along with other barbarian tribes that took over dying empires, although to Hitler’s admiration, it pioneered in the systematic extermination of the original inhabitants.

CHINA READY TO PAY PRICE OF DEFIANCE IN SEA ROW 100-year legacy Philippine National Bank (PNB) Chairman Dr. Lucio Tan, chairman of the Lucio Tan Group of Cos., checks on the entries for the stamp-making contest organized by PNB in celebration of its 100th year. The competition aims to promote awareness among the youth on the significance of celebrating PNB’s legacy through the creative art of postage design. The Philippine Postal Corp. will issue commemorative stamps to celebrate PNB’s centennial. ALYSA SALEN

E3

M a zatd a Peugeot the French Skyactiv-D: Film Festival Breaking

BSP keeping inflation target despite plunge in oil prices

By Bianca Cuaresma

motoring

Better late than never

Continued on A11

The Polo makes a statement

motoring

P25.00 nationwide | 5 sections 34 pages | 7 days a week

E3

T

@BcuaresmaBM

he Bangko Sentral ng Pilipinas (BSP) remains confident the renewed downtrend in the prices of oil that is currently affecting markets across the world will not cause any disinflationary pressure in the country.

After oil prices rebounded from their lowest level in February, the global price

PESO exchange rates n US 46.3940

of oil traded above $50 a barrel in recent days and has struggled to advance any further.

Concerns on supply and other developments, such as the rate decision of the US Federal Reserve and the looming withdrawal of the United Kingdom from the European Union (Brexit), pushed oil prices to a steady decline below $50 a barrel this week.

The extraordinarily low oil prices

in early 2016 have pushed local inflation to fall below the BSP’s target range for the year, averaging at 1.3 percent in the first five months. The central bank’s inflation target is at 2 percent to 4 percent.

Central bank officials earlier said inflation will bounce back to within target toward the second half of the year on the assumption that oil prices will Continued on A2

E

ven before a ruling, China may have lost by refusing to cooperate with a United Nations (UN) arbitration tribunal over its claim to virtually the entire strategic South China Sea. Yet, Beijing seems prepared to absorb the cost to its reputation, confident that, in terms of territory and resources, it won’t lose a thing.

Here is a look at some of the key points of the case before the tribunal, and its potential effects for China, the region and the world.

The case before The Hague tribunal, filed by the Philippines, centers on the applicability of China’s vaguely drawn “nine-dash line” boundary claim in the South China Sea under the United Nations Convention on the Law of the Sea. A decision is expected sometime within the next several weeks, but since there is no enforcement mechanism, its potential impact is unclear.

Along with China and the Philippines, four other governments—Brunei Darussalam, Malaysia, Taiwan and Vietnam—also claim islands and reefs falling within the ninedash line, while Indonesia has expressed concern about the Chinese boundary also overlapping its exclusive economic zone. Each year an estimated $5 trillion in global trade passes through the South China Sea, also home to rich fishing stocks and a potential wealth of oil, gas and other resources.

China’s irritated response

Despite pressure from Washington and elsewhere, China appears determined to avoid granting any hint of legitimacy See “China,” A2

n japan 0.4377 n UK 65.9212 n HK 5.9790 n CHINA 7.0523 n singapore 34.3075 n australia 34.3501 n EU 52.2443 n SAUDI arabia 12.3750

Source: BSP (16 June 2016 )

A2 Friday, June 17, 2016

BMReports BusinessMirror

Asean discord blocks issuance of joint statement on sea feud

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he Philippines says differences within the Association of Southeast Asian Nations (Asean) prevented the 10-nation bloc from issuing a tough statement on territorial feuds in the South China Sea after a meeting hosted by China this week.

Foreign Affairs Spokesman Charles Jose told reporters on Thursday that the Asean foreign ministers’ failure to issue a joint statement after discussing the disputes with their Chinese counterpart prompted half of the bloc’s member-states to issue their own individual statements.

Jose said the ministers initially agreed on the text of the joint statement, but some may have changed their mind later, preventing it from being issued publicly.

The disunity underscores the difficulty of resolving the disputes, which analysts fear could spark an armed confrontation in one of the world’s busiest sea lanes. AP

BSP keeping inflation target despite plunge in oil prices Continued from A1

also bounce back to more normal levels, coupled with higher food prices, as La Niña sets in.

Amid uncertainties brought by the movement in oil prices, BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said the central bank’s current inflation forecasting models still show a within-target increase in prices for 2016. This means the downtrend in oil prices will not put any downward pressure on the actual inflation figures in the second half of the year.

“While oil prices have sunk to threeweek low, there has been some uptrend in the futures markets for the next few years. With the peso remaining broadly

stable, we don’t expect oil prices to generate further disinflationary pressure,” Guinigundo told the BusinessMirror.

The deputy governor further said the central bank’s oil-price assumption continues to capture the actual year-todate average, and the other assumptions on growth, interest rates and liquidity growth continue to be relevant.

“On this basis, we expect inflation to remain within the 2-percent to 4-percent target for 2016 and 2017,” he said.

Bank of the Philippine Islands (BPI) research officer Nicholas Antonio Mapa backed the central bank’s view, saying that if oil prices decline, they are still far from the extraordinarily low levels seen

especially in the first quarter of the year.

“Furthermore, the base effects of the oil-price plunge seen in previous months are expected to disappear or tighten going forward. Thus, we may no longer see the substantial deflationary trend in energy and transport costs, which have weighed on the official inflation prints over the past few months,” Mapa told the BusinessMirror.

Mapa said the combination of the oil price’s waning base effects, plus the anticipation of increased food prices due to the onset of La Niña, will push prices higher.

Base effects on the consumer price index basket will also help push inflation rates higher on average for the year, he said.

China. . .

Continued from A1

to a process that might challenge its sovereignty claim and control over resources. For months Chinese officials, state media outlets and high-ranking military officers have maintained a relentless stream of invective against the Philippines’s pursuit of arbitration, calling it unlawful, illegitimate and a “political farce.”

“The South China Sea arbitration unilaterally initiated by the Philippines is nothing but a political scheme for one party to insult the other and will be recorded as an infamous case in the history of international law,” Vice Foreign Minister Liu Zhenmin told a group of visiting reporters in Beijing earlier this month.

Still, Beijing says it remains committed to bilateral negotiations with Manila, giving no direct indication of a tougher response despite speculation that it might make more military deployments to the region or announce a Chinese-managed air-defense identification zone over all or part of the South China Sea.

Damage control and impact on the region

Seeking to win over global opinion, both China and chief Philippine ally the United States have been lining up friendly nations to back their positions. Yet, with the exception of Russia, the countries whose support Beijing’s claims are mostly small states from outside the region with little influence over the dispute.

China has also shown some signs of restraint in not expanding its claims or vigorously seeking to eject other countries’ militaries from islands it claims. It also seems to be winding up its island-building projects in the southeastern portion of the sea, in which it has added more than 1,295 hectares (3,200 acres) of land topped with runways and military installations.

That may be an attempt to retain some credibility over its repeated evocations of the 2002 Declaration on the Conduct of Parties in the South China Sea signed by China and the

news@businessmirror.com.ph 10 members of the Association of Southeast Asian Nations.

What’s behind China’s stance

China insists the South China Sea disputes should be hammered out in bilateral talks between it and other claimants. It has steadfastly rejected third-party arbitration or negotiations on key issues, such as sovereignty in multilateral bodies such as Asean.

Resurgent nationalism, control of resources and a desire for operational strategic depth for the rapidly modernizing People’s Liberation Army are emboldening President Xi Jinping in taking a hard line.

That The Hague panel is headed by a former diplomat from China’s old nemesis, Japan, makes it even more worthy of derision, Chinese critics say. In addition, within the context of what China perceives as a relentless US campaign to contain its rise to prominence, Beijing officials see an American plot behind the case. “We don’t understand why the US has been so active in backing the arbitration behind the scene,” said Liu, the vice foreign minister.

“As time goes by, I believe the plot will eventually come to light.”

Broader legal implications Whatever the outcome, China’s refusal to cooperate with the tribunal could harm efforts to promote international arbitration that have already been hamstrung by the occasional refusal of the United States and others to recognize the International Court of Justice and other institutions.

China’s noncompliance is also damaging to the UN Convention on the Law of the Sea itself, since it could discourage compliance with other key features, particularly its establishment of a 200-nautical-mile (370-kilometer) exclusive economic zone, said James Kraska, a professor of oceans law and policy at the US Naval War College.

Whether other regional claimants will also bring legal challenges against China remains to be seen. They could be deterred by the apparent futility of doing so, as well as an aversion to angering a crucial economic partner. AP

news@businessmirror.com.ph

BMReports BusinessMirror

HSBC sees PHL a member of Asia’s ‘growth camp’

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RITISH multinational banking and financial services firm HSBC Holdings Plc. sees the Philippines as one of the “brighter spots” in Asia.

Frederic Neumann, cohead of HSBC’s Asian Economics Research, said the archipelag ic country remains economically hea lthier for f ur ther g row th with its sufficient capital and its market continuously relying on domestic profits.

In his research, titled “Two Asias,” Neumann divided Asian economies into two “camps.” One camp comprises open, highly export-sensitive markets with high debt loads. The other camp includes “closed economies,” “which are not as highly leveraged [but are] less export-dependent.”

“Open-markets camp” coun-

tries, according to Neumann, are Korea, Taiwan, Hong Kong, Singapore and Malaysia. These countries are exposed to external demand but have relatively high debt burdens.

Along with India and Indonesia, Neumann placed the Philippines in the “closed economies camp.” He said these countries “look promising” albeit with low leverage, as its exports fail to play a big role in economic growth.

He noted that Indonesia has the lowest debt-to-GDP ratio among major countries. The Philippines, he said, “isn’t that far behind.”

However, Neumann said, “this

is not to say that economies in the second camp are about to deliver stunning growth.”

He added that “structural reforms” are still needed despite the “robust growth” to ensure acceleration of the economy.

Government data revealed the country has consistently recorded a lower external debt at $77.47 billion last year compared to $79.95 billion in 2012.

With lower debt, the government can allot a portion of its budget for paying debt to other real sectors, such as construction and durable equipment.

Government data also reveals about 19 percent of the country’s GDP goes to debt payment.

Neumann said the Philippines

has been able to sustain its economy without depending on exports.

The country’s imports, he said, consistently exceeded quarterly and annual exports volume.

In the first quarter this year, imports reached P30.8 million over P24.3 million in exports, data from the Philippine Statistics Authority (PSA) shows. Imports also were higher in the last quarter in the previous year with P24.7 million over P20 million, data by the PSA revealed.

In the same year, imports surpassed exports with P27.7 million over P23.3 million. Two years ago, exports also fell short with P23.8 million over P26.8 million in imports. Kathryn Jose and Alyssa Divina,

Interns

Economies in the second camp are about to deliver stunning growth.”—Frederic Neumann

Delayed irrigation projects to undergo restructuring

By Cai U. Ordinario @cuo_bm

I

MPLEMEN TAT ION del ays and foreign-exchange losses required three irrigation projects to undergo restructuring or Investment Coordination Committee reevaluation this year, the National Irrigation Administration (NIA) said.

NIA documents obtained by the BusinessMirror showed these irrigation projects are the National Irrigation Sector Rehabilitation and Improvement Project; Jalaur River Multipurpose Project Stage II; and Pasa Small Reservoir Irrigation Project (Pasa SRIP).

Documents showed the Jalaur River Multipurpose Project Stage II and Pasa SRIP encountered delays, while the National Irrigation Sector Rehabilitation and Improvement Project encountered foreign-exchange adjustments.

The NIA said the P11.212-billion Jalaur River Multipurpose Project Stage II needs reevaluation because of delays it encountered during implementation.

“The project commenced only in March 2012. The loan agreement stipulates the physical completion of the project will take 60 months upon loan effectivity, which falls on November 28, 2017,” the NIA said. “Late start in implementation due to late approval of the project.”

As early as December 2015, the National Economic and Development Authority (Neda) said its report showed the project was

behind schedule and has an overall accomplishment rate of only 14.7 percent.

This represented a negative slippage of 13.4 percent from its target of 28.1 percent. The causes of the delays were the late procurement of consultancy services and equipment, and the issuance of the writ of kalikasan by the Supreme Court on October 31, 2013.

The Neda said the writ of kalikasan required the NIA to respond to the High Court’s order since it was a vital condition to the issuance of a Notice to Proceed.

The project, approved by the Neda Board in March 2012, is in Iloilo and implemented between 2012 and 2016. The project is funded by a loan from the Economic Development Cooperation Fund (EDCF)/ Kexim Bank.

Meanwhile, the NIA said the P1.029 -billion Pasa SR IP encountered implementation delays caused by typhoons and heavy rains in Isabela, where the project was being undertaken. “[The project encountered] delays in bank concurrence on the bid documents for the construction of dams and highline canal,” the NIA said. “Time extension was due to typhoons and heavy rains in the area that caused delay in the implementation of the project.”

As of December 2015, Neda documents showed the overall accomplishment rate of the project was only 25.55 percent. This represented a negative slippage

of 47.17 percent from the target of 72.72 percent.

The implementation of the Pasa SRIP, approved by the Neda Board in January 2013, runs from 2013 to 2016. It is being financed by a grant from the Korea Inter nationa l Cooperation Agency (Koica).

Meanwhile, the NIA said the depreciation of the Japanese yen would require them to restructure the P4.007-billion National Irrigation Sector Rehabilitation and Improvement Project.

The Japan International Cooperation Agency (Jica) is financing the project. The target implementation date for the project was 2012 to 2015.

“The peso equivalent of the loan amount of ¥6.187 billion was no longer sufficient to cover the loan-counterpart requirement of the project,” the document said.

The project is being implemented in multiple regions and provinces, particularly Ilocos, Pangasinan, Quezon, Palawan, Iloilo, Bukidnon, Davao del Sur, Sultan Kudarat and Agusan del Sur. As of December 2015, the Neda said the overall physical accomplishment of the project was at 10.12 percent.

Apa r t f rom foreig n- e xchange losses, the project also encountered problems in procuring consultants for its subprojects.

Toshiba to expand geothermal business

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oshiba Corp., the world’s biggest supplier of turbines used to produce electricity from the heat trapped underground, will expand its geothermal power business into operation and maintenance services as it aims to extend its lead in a global market dominated by a handful of competitors.

“We are just doing turbines now but we want to take full advantage of business opportunities in every stage of the value chain,” Tsutsomu Higashizawa, who is in charge of the Tokyo-based company’s global geothermal business, said in an interview.

Three Japanese manufacturers dominate the market for geothermal turbines. Toshiba, which has provided equipment for projects

accounting for more than 3,000 megawatts of capacity, has a 23.4 percent share, trailed by Fuji Electric Co. and Mitsubishi Hitachi Power Systems Ltd. with 21.2 percent and 20.7 percent, respectively, according to data from Bloomberg New Energy Finance. Mitsubishi Hitachi is a venture between Mitsubishi Heavy Industries Ltd. and Hitachi Ltd. “Our goal is to get a 100 percent share of the market, but more realistically we are aiming for at least half,” Higashizawa said.

Toshiba has sold equipment for projects in countries such as the U.S., Mexico, the Philippines and Indonesia, and said in May that it had won an order for a project in Turkey. The company also supplied a turbine for Japan’s first geother-

mal power plant, which opened in 1966 in the northern prefecture of Iwate.

Toshiba, which has been trying to recover from an accounting scandal, aims to win more orders in Turkey and African nations such as Kenya through its partnership with Ormat Technologies Inc., a Nevadabased geothermal company, according to Higashizawa.

The two companies signed an agreement in October to offer a wider variety of products and services for geothermal projects, with Ormat’s binary technology complementing Toshiba’s conventional flash turbine systems. Binary systems allow for cooler geothermal reserves to be used as opposed to flash steam plants. Bloomberg News

“Two out of the six priority subprojects were bid out on May 18, 2015. Mobilization was expected to commence in August 2015,” the Neda said.

Friday, June 17, 2016 A3

MPTC to install solar panels on tollbooths

By Lenie Lectura @llectura

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HE operator of the North Luzon Expressway (Nlex) and Subic-Clark-Tarlac Expressway (SCTEx) is mulling over the installation of solar-power panels on top of the tollbooths.

“We have commissioned a study for the conduct of the design so that our canopy can accommodate solar panels,” said Rodrigo Franco, president of Metro Pacific Tollways Corp. (MPTC), in an interview after a solar-energy forum hosted by Finex Research and Development Foundation Inc. Franco heads the environment committee of Finex.

Franco said he is looking forward to the results of the study, which he expects to be out soon.

“We are pursuing to have the toll canopy redesigned. It is still in the development design stage. The recommendation will also include the costs. We will know soon. The study will guide us,” Franco said.

Solar power is produced by collecting sunlight and converting it into electricity. This is done by using solar panels, which are large flat panels made up of many individual solar cells. It is most often used in remote locations, although it is becoming more popular in urban areas, as well.

As head of the group’s environment committee, Franco u rged Fine x members to incorporate solar power in their

₧1.5B

The amount MPTC is earmarking to upgrade the Subic-Clark-Tarlac Expressway over the next three years businesses and not just part of their corporate social responsibility (CSR) programs.

“I hope, eventually, the solarpanel rooftop will become part of their business strategy. I hope it won’t be just included in their CSR activities,” Franco said.

The 90-kilometer Nlex and 93.77-km SCTEx are now integrated into one seamless road network. On the average, around 200,000 and 35,00 vehicles travel through the Nlex and SCTEx, respectively.

T he MPTC Tollways Group includes the following major expressway firms: Manila North Tollways Corp., Tollways Management Cor p., Cavitex Infrastructure Corp. and MP Cala Holdings Inc. MNTC is earmarking over P1.5 billion to upgrade the SCTEx over the next three years.

As Metro Pacific’s Tollways Group head, Franco also presides over the strateg ic directions and operations of the group’s grow ing investments in tol lroad compa n ies i n V iet n a m and Thailand.

BMReports BusinessMirror

A4 Friday, June 17, 2016

news@businessmirror.com.ph

Liquidation of RSBS assets continues

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By Rene Acosta

@reneacostaBM

HE liquidation of assets of the Armed Forces’s Retirement Separation and Benefits System (RSBS) leading to its complete shutdown in five years as ordered by Malacañang is moving, the fund’s president, Norman Legaspi, said on Thursday.

However, Legaspi said the disposition of the military pension fund’s assets and properties was being undertaken with relative care owing to existing government regulations, thus impairing their efforts for a speedier liquidation.

“I have to ensure that the liquidation process goes through all the existing regulations and meets all provisions [of the law], including [requirements] from the Commission on Audit, and this is the reason the process is slowing a little bit,” Legaspi said.

“I do not want to be the subject of a complaint or face charges with the Office of the Ombudsman,” he added.

Through Memorandum Order 90 issued on April 8, Malacañang ordered the deactivation of the RSBS, as recommended by Legaspi, since the fund that was supposed to equalize the retirement pensions of soldiers is structurally flawed.

T he dissolution order also mandated the privatization of the pension fund’s two subsidiaries, Monterrosa Development Corp. and Southern Utility Management and Services.

While the Palace used the word “abolition,” it does not mean that the RSBS would already automatically close, leaving the contributions of some 120,000 soldiers and policemen unclaimed. Instead, it would wind down its operations within three to five years.

The grace period would allow the RSBS to consolidate and liquidate its assets, dispose them off and return the P15-billion or P16-

₧15B-₧16B The estimated amount of contributions of soldiers in RSBS billion contributions of soldiers taken from their monthly salaries.

Soldiers were required to contribute 5 percent of their salaries to the system.

Legaspi said that other than the consolidation and liquidation of assets, the number of personnel of the fund is also being reduced by the gradual retirement of its employees.

The retirement goes with the offer that the retired staff would be prioritized for hiring once a new agency to replace RSBS was created.

Legaspi said 10 personnel would be retired in December. The RSBS has 85 employees.

Last year Legaspi recommended to the Governance Commission for Government-Owned and -Controlled Corporations for the deactivation of the RSBS and the return of its members’ money, since its system makes it financially not feasible.

The RSBS—which was created on December 30, 1973, through Presidential 361, issued by former President Ferdinand Marcos and started operating in 1976 with a seed fund of P200 from the government—was set up as a funding mechanism to equalize the pensions of retired military personnel.

It was also envisioned to replace the Government Service Insurance

GO FOR CRUELTY-FREE ACCESSORIES

Animal-rights advocates from People for the Ethical Treatment of Animals carry ostrich cutouts for display outside a mall, as they protest the alleged use of the bird’s skin in making handbags for one of the most popular brands on Thursday in the financial district of Makati City. The group is urging shoppers to, instead, patronize “many stylish cruelty-free accessories” from other retailers. AP

System eventually “at the time when it is self-sufficient.”

However, the RSBS has never attained financial self-sufficiency, and it can never do so, according to officials, because its primary source of funding was only the contribution of its members.

According to several studies, one of which was that of the Feliciano Commission, the RSBS “in its

Visaya: Martial law against Abu Sayyaf Group needs deeper study

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he declaration of martial rule in areas where the Abu Sayyaf Group (ASG) operates could be considered, but such an option has to be thoroughly studied before it can be recommended to incoming President Rodrigo R. Duterte.

This was the assessment of incoming Armed Forces Chief of Staff Lt. Gen. Ricardo Visaya following calls by some military generals to put the island-provinces of Basilan and Sulu under martial law in order to stop criminality in the two provinces.

The tough measure is being pushed by certain sectors, principally to stop the spate of kidnapping activities by local terrorist and other lawless groups operating in the two areas.

Just this week, the ASG beheaded its Canadian captive Robert Hall and dumped his decapitated head beside a Roman Catholic cathedral in Jolo following the nonpayment of its ransom demand of P300 million.

In April the same captors also beheaded Hall’s compatriot John Ridsdel, while they continue to hold several other captives, including Norwegian Kjartan Sekkingstad and Hall’s Filipino girlfriend Marites Flor.

“The declaration of martial law is an option as far as I am concerned, that is an option,” Visaya said. “It can be studied, because we have seen that there is apparently a failure of governance there.”

Visaya added that putting Sulu and Basilan under martial rule can be a good way to establish law and order in the two provinces, which have recorded a spike of kidnapping cases over the past months,

The declaration of martial law is an option as far as I am concerned, that is [only] an option.

It can be studied because we have seen that there is apparently a failure of governance there.”

—Visaya

other than serving as repositories of kidnap victims.

The incoming military chief also noted that while victims are snatched in other areas, including in the province of TawiTawi and even in Sabah, the victims are usually taken to Sulu, where the ASG negotiates for ransom for the captives.

“So perhaps, martial law can also be an answer to prevent the Abu Sayyaf from continuing their kidnapping activities,” Visaya said, noting the presence of already 11 battalions in the two provinces, nine of them deployed in Sulu.

However, Visaya said the measure has to be carefully studied by the general headquarters before they would recommend it to Duterte.

Visaya will replace Armed Forces Chief of Staff Lt. Gen. Glorioso Miranda on July 1. Rene Acosta

present conception and structure was fundamentally flawed and had not discharged its mandate,” even with its operation.

The Feliciano Commission was created in the aftermath of the mutiny staged by members of the Magdalo during the term of former President Gloria Macapagal-Arroyo, wherein the group of soldiers hurled accusations of misman-

agement of funds and corruption against the military leadership.

An actuarial report prepared by another firm on the RSBS also indicated that the military’s retirement and pension plan was projected to achieve its financial “self-sustaining status” by the year 2058, and that its funds “shall be exhausted within 32 years after achieving self-sufficiency in the year 2090.”

Since it has not attain self-sufficiency status yet, the RSBS has never granted pensions to retired soldiers, other than returning their contributions.

Its problem was also exacerbated by mismanagement and acts of corruption by its former officials as it was “raided” during the latter part of the Marcos and during the Cory Aquino administrations.

Billionaire Packer to spin off assets including stake in Melco Crown C asino operator Crown Resorts Ltd. will spin off international assets, including a $2-billion stake in Melco Crown Entertainment Ltd. under a plan to increase returns for controlling shareholder James Packer.

The newly listed entity is also set to house Crown’s development site in Las Vegas, a 20- percent stake in Japanese restaurant Nobu and half of UK casino operator Aspers Group, the Melbourne-based company said in a statement on Wednesday. The gaming firm has a 27-percent stake in Nasdaq-listed Melco, which runs casinos in Macau and the Philippines.

Chairman Robert Rankin said the split was designed to isolate Crown’s Australian casino business from the wider group, which he said investors undervalued because of a gambling downturn in Macau. Shares in Crown, which is controlled by Packer’s closely held investment company Consolidated Press Holdings Ltd., have tumbled more than 30 percent since January 2014.

The newly separated international business “will be set up as a growth asset and probably be given a reasonable-sized war chest to expand in Asia and Las Vegas,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by phone. “The Australian assets are humming along nicely enough, but you would not describe them as a great growth story.”

Macau drag

Shareholders, led by Packer—who has a net worth of $3.4 billion—will own equity in the new international entity proportionate to their Crown stakes, the company said. After the spinoff, Crown would hold gambling resorts in Melbourne, Perth and a planned luxury hotel-

Melco Crown

casino in Sydney. London casino Aspinalls and online gaming operations such as CrownBet would also be part of Crown.

“The proposed demerger reflects the different nature of Crown Resorts’ controlled Australian operating assets from its international investments,” Rankin said in the statement. “The Crown Resorts share price has been highly correlated to the performance of its investment in Macau.”

Gambling revenue in the southern Chinese territory of Macau has been hurt by government curbs on illicit money flows and a campaign against corruption that deterred VIP players. In May Crown sold an $800-million stake in Melco.

Privatization talks

That sale revived speculation that Packer was preparing to buy back some gaming assets in Australia. Last year he held talks with private-equity firms and pension funds about a possible buyout of Crown assets, people with knowledge of the matter said last December.

Rankin said on Wednesday Crown has “great faith in the long-term development of the Macau market.”

Crown, which has a market value of A$8.2 billion ($6 billion), said, as well, it will explore a potential initial public offering of 49 percent of a property trust that would hold its Australian hotels, apart from Crown Towers Melbourne. Bloomberg News

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AseanFriday BusinessMirror

Bank Indonesia steps up stimulus with fourth rate cut this year

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ndonesia’s central bank cut its benchmark interest rate for the fourth time this year, indicating its willingness to favor economic growth over stability in the face of mounting global risks.

Governor Agus Martowardojo and his board cut the reference rate by 25 basis points to 6.5 percent on Thursday, in line with the forecasts of 11 of the 29 economists surveyed

by Bloomberg. The rest had predicted the rate would stay unchanged.

A f ter stay ing pat for t wo months, policy-makers in Indonesia are finding room to ease rates again following a drop in the inflation rate to the lowest in more than six years in May. With a Brexit vote

looming next week and uncertainty clouding the outlook for US interest rates, Bank Indonesia may be positioning itself for any fallout from a increase in risk aversion.

“Indonesia is in a benign environment with regard to the currentaccount deficit, credit growth and inflation, which, in turn, allows for accommodative monetary policy,” Helmi Arman, an economist at Citigroup Inc. in Jakarta, said in a note to clients before today’s decision.

Bank Indonesia also cut the seven-day reverse repo rate—which will become the new benchmark interest rate in two months’ time— by 25 basis points to 5.25 percent.

Vietnam grabs market share from Asean peers in EU trade TrAN DAI QUANG IN CAMBODIA

Vietnamese President Tran Dai Quang (center, left) and his wife (center, right) walk during a ceremony to pay respect at a statue of Cambodian late King Norodom Sihanouk in Phnom Penh, Cambodia, on Wednesday.

Tran Dai Quang is on a two-day official visit to Cambodia. AP

Bloomberg News

Malaysia to switch ringgit fixing to transaction model

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alaysia plans to switch the way it provides a daily reference for the ringgit’s exchange rate against the dollar next month to boost transparency, according to the central bank.

Bank Negara Malaysia will require domestic contributing banks to provide a quote for the exchange rate based on market transaction prices under the new system, rather than the current method where quotes can be given that aren’t based on actual trades, the central bank said in statement on Wednesday. A trial will begin on June 20 and the target date for adoption is July 18, it said.

The central bank will also expand the official close of trading for the dollar-ringgit to 6 p.m. from 5 p.m., although onshore banks can continue to make contracts, according to the statement. The currency doesn’t trade offshore unlike nondeliverable forwards. The new reference rate

will be published daily at 3:30 p.m. local time and will be computed based on the weighted average volume of the interbank exchange rate transacted by domestic financial institutions between 8 a.m. and 3 p.m., it said.

The Southeast Asian nation tightened rules on the daily setting of the reference rate in 2013 as part of measures to shield the local market from manipulation.

The move came after regulators worldwide broadened the scope of investigations beyond interbank interest rates to encompass more benchmarks after Barclays Plc. was fined £290 million ($411 million) for manipulating the London interbank offered rate.

The ringgit gained 0.2 percent to 4.0990 against the dollar in Kuala Lumpur on Wednesday, according to prices from local banks compiled by Bloomberg. It slumped 4.9 percent this quarter in Asia’s worst performance. Bloomberg News

Editor: Max V. de Leon • Friday, June 17, 2016 A5

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ietnam took market share of European Union (EU) trade away from other Southeast Asian nations last year, a trend that may continue after it concluded a freetrade agreement with the regional bloc.

The country accounted for 19.1 percent of the €201.4 billion ($227 billion) in total trade between the EU and members of the Association of Southeast Asian Nations (Asean) in 2015. That figure is up from 15.8 percent in 2014, according to data from the EU delegation in Singapore.

“Vietnam is one of the growing markets and we’ve seen a very posi-

tive development with our trade relationship with that country,” Michael Pulch, EU ambassador to Singapore, said in an interview on Wednesday.

That growth, coupled with the finalization of the free-trade pact, “points to a dynamic trade relationship in the future,” he said.

Signs of Vietnam’s trade prominence are growing: in 2014 the country overtook its Asean neighbors to

19.1%

The share of Vietnam in the $227-billion Asean-EU trade in 2015

become the biggest exporter to the US, powering ahead of traditional manufacturing hubs like Thailand and Malaysia. Vietnam has capitalized on shifting production patterns in Asia as labor costs in China rise, attracting investment from companies such as Samsung Electronics Co., which assembles and exports smartphones from the country.

While EU trade with Singapore, which is still the bloc’s biggest partner in Southeast Asia, increased last year, its market share of total trade fell to 24.1 percent from 25.1 percent. Malaysia, Thailand and Indonesia also lost market share to Vietnam.

Growing population

Vietnam is the second country in Asean after Singapore that the EU has concluded a free-trade pact with. Exports from Vietnam to the EU are dominated by phones, electronic products, footwear, clothing and coffee.

Sluggish economic prospects in advanced countries have pushed investors to search for opportunities in markets that are benefiting from faster growth and younger populations, such as the Philippines and Vietnam.

Vietnam “has higher levels of income and is generally more developed,” Pulch said. “Some of the products that we can offer now can find a broader audience.” The Southeast Asian nation has also matured into demanding more advanced technologies, which Europe is still a key provider of, he said.

Total EU trade with Asean rose 12 percent last year. China’s trade with the European regional bloc amounted to €520.8 billion in 2015, more than double that of Asean’s trade, according to EU data.

The EU has targeted Vietnam and Singapore in a new business initiative aimed at exposing small- and medium-sized companies in Europe to opportunities in Southeast Asia.

The EU will help facilitate meetings between companies in the two regions in industries ranging from water to food and beverages.

Bloomberg News

The World BusinessMirror

A6 Friday, June 17, 2016

Trump’s image has gotten worse–poll

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ASHINGTON—Donald Trump’s standing with the American public has worsened significantly over the last month, according to a new survey that finds 70 percent of Americans viewing him negatively, including 56 percent who feel “strongly unfavorable.”

Hillary Clinton also has more negative impressions among the public than positive ones, the new Washington Post/ABC News poll found, but her problems pale in comparison with Trump’s, the survey indicates.

Among all American adults surveyed, 55 percent had a negative view of Clinton, and 43 percent viewed her positively. Only 29 percent of adults had a positive view of Trump.

Among registered voters, the results were almost the same for both.

Trump stood at 69-percent negative and 31-percent positive among registered voters, Clinton at 56 percent-43 percent.

The poll was conducted from Wednesday through Sunday—after Clinton clinched the Democratic presidential nomination, but with most of the interviews conducted

before the terrorist attack in Orlando, in which 49 people were killed.

The polling came after a week in which Trump received extensive criticism, including from Republican leaders, for his attacks on US District Judge Gonzalo Curiel.

The judge is overseeing a fraud lawsuit brought against the businessman by former students of the now-closed real-estate school that he called Trump University; Trump has claimed Curiel is biased because of his Mexican heritage.

Through most of the campaign year so far, about six in 10 Americans have held a negative view of Trump. His image worsened this spring, then improved somewhat after he clinched the Republican presidential nomination. The new survey shows it deteriorating again.

Clinton’s image worsened notably last spring, when she moved

news@businessmirror.com.ph

China cancels visit by kids who sang Taiwan anthem

70%

The percentage of Americans who view Donald Trump negatively from being seen as the former secretary of state to being a presidential candidate. Her standing slipped a little further this spring, as the competition for the Democratic nomination heated up between her and Sen. Bernie Sanders.

Clinton continues to have the most trouble with white men, threequarters of whom have a negative impression of her, the survey found.

A majority of white men have sided with Republicans in presidential elections for decades, but Clinton does significantly worse with that group than an average Democrat.

Trump’s biggest problems come with minorities. Among Latinos and among nonwhite Americans overall, about nine in 10 have a negative view of him, with three-quarters holding a strongly unfavorable view.

About one in three Republicans in the survey had negative views of Trump, while about one in four Democrats voiced a negative view of Clinton.

The poll surveyed 1,000 American adults on cellphones and landlines. It has a margin of error for the full sample of 3.5 percentage points in either direction. TNS

Coffee off from list of cancer-causing agents

Taiwanese President Tsai Ing-wen (left) and Vice President Chen Chienjen sing the national anthem with the Puzangalan Choir during their inauguration ceremony in Taipei, Taiwan, on May 20. AP/Chiang Ying-ying

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EIJING—Chinese organizers canceled an invitation to a Taiwanese children’s choir who performed the island’s national anthem at last month’s inauguration of new President Tsai Ing-wen, reports said on Thursday.

The Puzangalan Choir made up of children from the native Paiwan aboriginal tribe was due to perform at a festival in southern China’s Guangdong province on July 20, Taiwan’s official Central News Agency (CAN) said.

It quoted the choir Musical Director Wu Sheng-ying as saying the Chinese organizers informed the choir one week after they appeared at the May 20 inauguration of the self-governing island’s first female president.

No reason was given, although China claims Taiwan as its own territory and regularly retaliates against artists whom it sees as backing the island’s independent identity, along with other overseas

artists with whom it is displeased.

No contact information from the festival organizers was immediately available. A message from the choir on its Facebook page said the invitation’s cancellation had been “within our expectations,” but that the group’s heightened profile would help it with fund-raising to make up for the loss of the appearance fee.

“We’ll just take that invitation and use it as wallpaper. The kids don’t really get what happened, so what does it matter?” the message said.

Such actions illustrate China’s hardline stance over its refusal to recognize Taiwanese political institutions, but which also appear to clash with its attempts to win Taiwanese hearts and minds, and curb growing pro-independence sentiment through youth and cultural exchanges.

In 2000 China canceled all concerts

and commercial activities within China

by Taiwanese singer Chang Hui-mei after she performed the national anthem at the inauguration of Chen Shui-bian, the first president elected from Taiwan’s pro-independence Democratic Progressive Party, of which Tsai is a member.

“Singing the national anthem at the presidential inauguration was a great honor for us, so we decided to go ahead with it, although someone had warned us of the possible consequences,” Wu was quoted as saying by CNA. The Puzangalan Choir’s performance, in which they incorporated aboriginal musical elements into the anthem, had been widely praised.

They are next scheduled to appear at a choir competition in Hungary in August. CNA said Tsai has donated 500,000 Taiwanese dollars ($15,400) from her publishing royalties to help with expenses for the trip. AP

Einstein’s theory confirmed again

Scientists detect gravitational waves for 2nd time

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Walter Martin prepares coffee in his coffee shop in the colonial district of Old San Juan, Puerto Rico. The World Health Organization’s research arm has downgraded its classification of coffee as a possible carcinogen, declaring there isn’t enough proof to show a link to cancer. AP/Ricardo Arduengo

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ONDON—Go on, have another cup. Coffee is now off the list of things that could possibly cause cancer.

Experts convened by the World Health Organization’s (WHO) cancer research arm declared on Wednesday that there isn’t enough proof to show that the brew is linked to cancer. But in the same report, they warned that drinking “very hot” beverages of any kind could potentially raise your risk of the disease.

In particular, it cited countries, including China, Iran and those in South America, where teas, such as the bitter herbal infusion mate are traditionally drunk at extremely high temperatures—above 65 degrees Celsius or 70°C (150 or 160 Fahrenheit)—considerably hotter than drinks would normally be served in cafés across North America and Europe.

Experts convened by the WHO’s International Agency for Research on Cancer (IARC) concluded there was inadequate evidence to suggest that coffee might cause cancer, according to a letter published in the Lancet Oncology. The caffeinated drink was originally added to IARC’s list of possible

carcinogens in 1991, based on a small number of studies that suggested a possible link to bladder cancer.

In its latest evaluation, the agency said some studies showed coffee drinkers had a lower risk for cancers of the liver and womb. For more than 20 other cancers, the evidence was inconclusive.

“I’m not really sure why coffee was in a higher category in the first place,” said Owen Yang, an epidemiologist at Oxford University who has previously studied the possible link between coffee and cancer. He was not part of the IARC expert group.

“The best evidence available suggests that coffee does not raise the cancer risk,” he said.

Drinking very hot beverages, however, just might.

Dana Loomis, deputy head of the IARC program that classifies carcinogens, said they began to look into a possible link after seeing unusually high rates of esophageal cancer in countries where drinking very hot beverages is common. He said that, even at temperatures below 60°C (140 Fahrenheit), hot beverages can scald the skin, and that consuming drinks at even higher temperatures

could be harmful.

Loomis said very hot drinks might cause a “thermal injury” in the throat that could eventually promote the growth of tumors, but that evidence was limited. He said there wasn’t enough data to suggest if eating very hot food might also be risky.

Other experts said people should remain focused on the leading causes of cancers, including of the esophagus, and that there were more important changes they could make other than waiting for their drinks to cool.

“Quitting smoking and reducing alcohol consumption are much more significant for reducing cancer risk than the temperature of what you’re drinking,” said Dr. Otis Brawley, chief medical officer of the American Cancer Society. Brawley said the cancer risk of drinking very hot beverages was similar to that posed by eating pickled vegetables.

Still, he welcomed the news that coffee would no longer be deemed a possible carcinogen.

“As a heavy coffee drinker, I have always enjoyed my coffee guilt-free,” he said. “But now there is scientific evidence to justify that.” AP

hey’ve done it again. Scientists using the Laser Interferometer Gravitational-Wave Observatory (Ligo) have detected a second collision between two black holes that sent telltale ripples through the cosmos.

The discovery, described in a paper accepted to Physical Review Letters and at the American Astronomical Society’s 228th meeting in San Diego, confirms that Ligo’s groundbreaking discovery of gravitational waves was no fluke—and draws the first brushstrokes that begin to fill in our understanding of these invisible denizens of the universe.

“It really feels like we are maturing as astronomers,” said Gabriela Gonzalez, spokesman for Ligo’s scientific collaboration and an experimental physicist at Louisiana State University.

The signal, which passed through the detector in Livingston, Louisiana, at 10:38:52 p.m. Eastern time last December 25 and hit the detector 1.1 milliseconds later, came from the collision of two black holes some 1.4 billion years ago.

The gravitationally bound bodies—weighing in at 14.2 and 7.5 solar masses, respectively—had been spinning inexorably toward one another. Their merger created a black hole with the mass of 20.8 suns and released the remaining 0.9 solar masses as energy in the form of gravitational waves.

The discovery may have eased the minds of some scientists, demonstrating that their initial discovery last September, which was revealed in February, was not simply a one-off.

“We were convinced it was real, but if it was the only one, we thought that other people might have some doubts,” Gonzalez said. “But now we know that there are no doubts.”

The masses of these black holes are also reassuring to scientists,

who had predicted—based on the few stellar-mass black-holes we know about—that such bodies would be somewhere around 10 solar masses.

The first discovery picked up black holes that were much larger, carrying 29 and 36 solar masses, respectively.

The scientists now think the rate of these particular collisions occurs around 9 to 240 cubic gigaparsecs per year. (A gigaparsec is roughly 3.26 billion light-years. A cubic gigaparsec, then, is a very, very large volume of space.) That rate falls within their predictions, Gonzalez added.

“It’s consistent with the pre-Ligo predictions, but the pre-Ligo predictions were very, very uncertain.

There was a broad range of possibilities,” said Marc Kamionkowski, a theoretical physicist at Johns Hopkins University who was not involved in the research. “The actual astrophysical rate that nature has chosen is near the high end of the range spanned by the pre-Ligo estimates.”

The discovery also allows researchers to start taking a broader view on the diversity of such blackhole events that may pervade the cosmos, said Kamionkowski, who predicted that thousands more would be discovered in the next decade.

“The first event was the discovery of black-hole binaries, and the second event ushers in the era of population statistics,” he said.

“There’s only so much that you can learn from one black-hole merger, and it’s similar in astrophysics: There’s only so much you can learn about star formation or stellar evolution by looking at one star.”

The scientists also were able to determine that one of the black holes was spinning at 20 percent of its maximum possible rate—a rather blunt measurement that likely will be honed with later detections and could help researchers winnow their models of blackhole formation, he added.

The team worked with the Virgo Collaboration, which is building an interferometer in Europe, to analyze the data for this second black hole. Once that detector comes online, the two teams will continue working together, using multiple facilities to help triangulate the origin of these mergers.

In the meantime, Gonzalez said, researchers are still poring over the data, looking to turn up any more hidden astrophysical gems.

“We still are analyzing the data from a lot of other sources, and we could be lucky,” she said.

Ligo arose from a decades-long effort to search for gravitational waves, which can be triggered by massive objects accelerating or decelerating through space. These ripples disturb space-time, squeezing and stretching it as they pass.

Albert Einstein had predicted their existence as part of his general theory of relativity a century ago, but even he had his doubts.

Practically speaking, these ripples are so infinitesimally tiny, so difficult to detect, that you’d need an enormous machine to find them.

Kip Thorne of Caltech and Rainer Weiss of Massachusetts Institute of Technology started planning how to build a giant detector in the 1970s. Today, the observatory consists of two L-shaped detectors, one in Livingston, Louisiana, and one in Hanford, Washington, each with legs of equal length (2.5 miles). If a gravitational wave passes through the detector, the legs are alternately stretched and squeezed, and, using a system of lasers in mirrors inside, the detector can pick up this distortion.

The initial version of Ligo, which ran from 2002 to 2010, picked up nothing, although that was expected.

The advanced setup found its first hit last September, just three days after going live. Los Angeles Times/TNS

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Friday, June 17, 2016

A7

UK Tories spar on post-Brexit budget

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ampaigners for the United Kingdom to leave the European Union (EU) poured scorn on the government’s bleak vision of a postBrexit Britain, as anxiety about next week’s knife-edge referendum spread to the Federal Reserve (the Fed).

Justice Secretary Michael Gove, one of Brexit’s leaders, criticized the austerity budget that the Remain camp says would be necessary to shore up public finances if the UK votes to leave. The plan’s main author, Chancellor George Osborne, is fighting a growing rebellion, as lawmakers from his Tory party lined up to reject the proposed tax hikes and spending cuts.

Osborne will seek to stem the revolt in a keynote speech at the Mansion House in the City of London on Thursday evening. He’ll be joined there by another leading advocate of staying in the EU: Mark Carney, governor of the Bank of England, which will announce an interest-rate decision earlier in the day.

Carney’s US counterpart, Janet Yellen, said on Wednesday that concern over a possible Brexit played a part in the Fed’s decision to hold back from raising rates.

Japan’s central bank refrained on Thursday from adding stimulus, even as it weakened its outlook for inflation. While the Bank of Japan statement made no specific mention of the looming referendum, it cited “geopolitical risks” fueling market volatility. With a week left before the vote, five of the last six published polls have showed Brexit ahead, a prospect that has unnerved investors. Global markets steadied on Wednesday and UK stocks pared losses. Still, from the Fed to EU headquarters, policy-makers are preparing for the fallout.

Yellen said the Brexit vote “could

₤30B

The amount of the “black hole” that was presumed to open in Britain’s public finances due to reduced trade and investment after leaving the EU

have consequences for economic and financial conditions in global financial markets.” The foreign ministers of Germany and France said that the EU’s two most influential members are ready to act to stabilize the bloc.

Anxiety over a potential Leave vote helped the MSCI Emerging Markets Index erase most of Wednesday’s gain. It also overshadowed the Fed’s dovish comments in trading of the yuan, as the Chinese currency swung back to losses despite a stronger central bank fixing.

Australia’s 10-year bond yields fell below 2 percent for the first time.

In the UK Gove said he wouldn’t support Osborne’s post-Brexit austerity plans because they’re based on fear-mongering. “What we’ve heard from the ‘Remain’ campaign throughout this whole campaign have been dire warnings of the British people taking control of their own destiny,” he said in a BBC television referendum special.

He said manufacturers and entrepreneurs “have confidence in the British people—why can’t the ‘Remain’ camp?”

‘Fantasy economics’

Osborne did get some support from the opposition for his budget scenario. He presented it on a platform shared with his Labour Party predecessor, Alistair Darling, and both men warned that a £30-billion ($43-billion) “black hole” would open in Britain’s public finances due to reduced trade and investment after leaving the EU. Claims of benefits from Brexit are “fantasy economics. Worse than that, it’s a deceit,” said Darling, who served as chancellor during the financial crisis. “I’m more worried now, much more worried, than I was in 2008.”

Labour finance Spokesman John McDonnell will weigh in on Thursday by saying that UK households would be £1,300 better off if the country voted to stay in the EU, according to the text of a speech he’s due to give in Manchester.

Immigration debate

Some of Labour’s Remain campaigners have also distanced themselves from Osborne: party leader Jeremy Corbyn said he wouldn’t vote for the mooted austerity budget. At least 66 of the 330 Tory members of parliament have said the same thing, deepening the party’s divisions and raising questions about Osborne’s future whatever the referendum result.

As support for Brexit gathers momentum, Prime Minister David Cameron—who called the referendum— dismissed criticism that the pro-EU argument has been too negative and has failed to address immigration, a key issue pushed by Brexiteers.

“You’ve seen from me a very passionate and strong remain campaign,” he told Channel 4 News in an interview. “Immigration is a challenge but I think everybody understand you don’t solve an immigration problem by wrecking your economy.” Bloomberg News

Shanghai Disneyland opens W

alt Disney Co.’s $5.5-billion Shanghai theme park—its first in mainland China—opened with fireworks, a dancing Mickey Mouse, dignitaries and messages of support from two of the most powerful presidents in the world.

“I hope that Shanghai Disney can provide visitors with safe and premium experiences and become a world-class theme park. I hope it promotes exchanges across cultures of the world,” according to a letter from Chinese President Xi Jinping, read

by Vice Premier Wang Yang at the park’s opening ceremony on Thursday morning.

Tens of thousands are expected to stream into Shanghai Disneyland on its debut, after nearly two decades in the making. The resort is the largest foreign investment ever for the Burbank, California-based company, as it intensifies the race to dominate China’s $610-billion tourism industry.

“The resort captures the promise of our bilateral relationship,” US President Barack Obama said in a letter, which Disney CEO Robert Iger read at the ceremony attended by senior officials, including Shanghai’s Communist Party secretary and its mayor.

The entertainment giant has already begun construction to expand attractions within the park’s 7 square kilometers (sq km) of land, Iger said at a briefing on Wednesday. The existing resort covers about 3.9 sq km.

“Nothing is as impactful, nothing creates a connection to our stories, to our brands, to our characters, than a theme park experience,” Iger said. “The experience people have when they spend time in our theme parks is immersive. They not only hear and see our stories but they actually enter them, they live in them.”

While most of the 300 theme parks in China are currently unprofitable ventures, Disney is leading an incoming wave of top-notch megaparks developed by both local and foreign operators competing for a tourism industry that is set to double by 2020.

About 60 more parks will open by then

Shanghai Disney Bloomberg News to serve Chinese consumers, including Dalian Wanda Group Co.’s chain of 15 “Wanda Cities.” DreamWorks Animation SKG Inc’s $2.4-billion DreamCenter is scheduled for 2017, while Haichang Ocean Park Holdings plans a marine park an hour from Disneyland and Six Flags Entertainment Corp.’s Shanghai park will be its first outside North America.

“The Shanghai resort shows the confidence of the international business community in China’s economic potential,” said Wang, one of the four vice premiers in the country’s State Council, in a speech as a drizzle fell during the ceremony. Rain marks “a good and auspicious start” according to Chinese culture, Wang said.

Amid the activities surrounding the Shanghai park debut, Iger offered his sympathies to the family of a child who died in an incident at Disney’s Grand Floridian Resort & Spa. The company said on Thursday beaches in the Florida resort area remain closed until further notice after the death of the 2-year-old boy who was dragged by an alligator into a man-made lake.

China bet

Iger, who is also the company’s chairman, first stepped foot on land that would become the Disney site in Shanghai’s Pudong district 17 years ago. The construction of the resort, a joint venture between Disney

and the state-owned Shanghai Shendi Group, broke ground in 2011.

“It’s a big bet on a big market and it represents, not only our biggest entrance into this market, but the potential to deliver great growth for the company long term,” Iger said in a Bloomberg TV interview June 9.

Disney fell 0.1 percent to $98.27 by the close of trading in New York on Wednesday. The shares have fallen 6.5 percent this year, compared with the 1.3-percent gain in Standard and Poor’s 500 Index.

There’s big money at stake. About 25 percent of Chinese consumers surveyed in 2015 plan to spend more of their income on leisure and entertainment, according to a March report from McKinsey & Co. They’re also showing an increasing willingness to pay a premium for better goods, with half of those surveyed seeking the “best and most expensive” products.

Chinese preferences

From the peony flower design on the turret of the park’s centerpiece castle, to a comedic Beijing opera interlude in the Mandarin version of the Lion King musical, Disney has taken pains to incorporate Chinese elements at the 963-acre resort.

“We didn’t build Disneyland in China, we built China’s Disneyland,” Iger. said. Bloomberg News

In a European Union (EU) referendum campaign stunt, a flotilla of boats supporting “Leave” floats near a small boat with an “In” banner on the River Thames outside the Houses of Parliament in London on Wednesday. A flotilla of boats protesting EU fishing polices has sailed up the River Thames to the Houses of Parliament as part of a campaign backing Britain’s exit from the EU. The flotilla was greeted by boats carrying “Remain” supporters. AP/Matt Dunham

A8

The World BusinessMirror

Friday, June 17, 2016

‘Orlando shootings provide visibility for LGBT Muslims’

A man walks through the crowd holding a sign during a vigil and memorial for victims of the Orlando nightclub shootings near the historic Stonewall Inn, a gay bar, on Monday in New York. State and city officials; lesbian, gay, bisexual and transgender community members; and others gathered as a show of solidarity with the victims and survivors of the Orlando nightclub shootings, the worst mass shooting in modern United States history. AP/Kathy Willens

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EW YORK—After the massacre in Orlando, the head of a prominent Muslim advocacy group stood before a bank of microphones and made remarks beyond the expected condemnations.

Along with denouncing the attack by gunman Omar Mateen as a violation of Islam, and offering prayers for the victims at the gay nightclub Pulse, Nihad Awad of the Council on American-Islamic Relations expressed unequivocal support for lesbian, gay, bisexual and transgender (LGBT) civil rights.

“For many years, members of the [LGBT] community have stood shoulder to shoulder with the Muslim community against any acts of hate crimes, Islamophobia, marginalization and discrimination.

Today, we stand with them, shoulder to shoulder,” Awad said at a Washington news conference. “We cannot fight injustice against some group and not against others.”

Omid Safi, director of the Duke University Islamic Studies Center, called the comments, and similar statements from other major Muslim groups, a “shocking development” from leaders, who, until last Sunday’s tragedy, “would probably have never been seen uttering the words gay and lesbian publicly.”

The mass shooting, perpetrated by an American Muslim in a communal space for gays, has brought to the forefront Muslim attitudes toward homosexuality and the plight of LGBT Muslims.

A spokesman for Awad played down the director’s remarks as nothing new. But Faisal Alam, who is gay and a founder of the support and advocacy group Muslim Alliance for Sexual and Gender Diversity, said such comments have opened “a historic opportunity for us to talk to one another.”

Eman Abdelhadi, a doctoral student at New York University who came out in college, said the attention could provide some muchneeded visibility for LGBT Muslims who are “often erased.”

“The vast majority of American

Muslims are illiterate as it relates to queer issues,” said Ahmed Younis, an author who specializes in Islamic law and advocates acceptance of gays and equal treatment for women. He said he hoped for some real soul-searching beyond expressions of solidarity toward fully integrating gays and lesbians into Muslim life.

LGBT Muslims said the shooting sparked a complex set of emotions. They were devastated for their fellow gays and lesbians, while deeply concerned about antiMuslim bias the shooting would generate.

At the same time, they were caught at the intersection of two mutually wary groups: LGBT people who consider Islam uniquely antigay, and Muslims prejudiced against gays and lesbians.

Abdelhadi said she feared “Islam and queerness being pitted against each other in a sort of battle and that is just making it impossible for me to exist as I am.”

The day after the shooting, more than 50 LGBT advocacy groups made an appeal for the gay community to reject anti-Muslim rhetoric.

“We know what it looks like and feels like to be scapegoated and isolated in the midst of a crisis,” the groups said.

But Younis said the relationship between Muslims and LGBT advocates “is not a natural or deep alliance.”

Many US Muslim immigrants come from countries and cultures where gays are often violently persecuted, and harbor a deep antipathy toward LGBT people. But younger generations of American Muslims generally don’t share these views, Younis said.

Last year, after the Supreme Court legalized gay marriage, author Reza Aslan and actor Hasan

Minhaj published a letter to “our fellow American Muslims,” urging them to support civil rights for gays, even if Muslims are uncomfortable with, or outright opposed to, same-gender relationships.

“Rejecting the right to same-sex marriage, but then expecting empathy for our community’s struggle, is hypocritical,” Aslan and Minhaj wrote on ReligionDispatches. org. “We have to fight for the right of others to live their lives as freely as we want to live ours.”

A survey last year by the Public Religion Research Institute found four in 10 US Muslims support samesex marriage—compared with 53 percent of all Americans who said the same.

About two-thirds of Muslims in the survey favored civil-rights protections for LGBT people in jobs, housing and public accommodations, compared to seven in 10 of all Americans.

Scott Siraj al-Haqq Kugle, an Emory University professor and author of Homosexuality in Islam: Critical Reflection on Gay, Lesbian and Transgender Muslims, said he first began writing about LGBT issues and Islam 14 years ago.

At the time, he said Muslims generally rejected or ignored his work challenging the overwhelming Islamic consensus that samegender sex is to be condemned. But over the years, Kugle has noted a growing openness in the US and elsewhere to discussing the topic.

He sees evidence of this shift in the new films, books, articles and blogs about gay Muslims.

The Duke Islamic Studies Center is in the midst of a yearlong project examining Islam and sexuality, including same-sex relationships, part of a wider scholarly reexamination of Muslim teachings on the subject, according to Safi. The research is mostly occurring in the West, but Muslims from South Africa, Malaysia and other countries participate in the work.

“So many Muslims—especially professionals, university students and families dealing with LGBT issues—are searching for alternative ways of practicing Islam that are inclusive and just. Muslim leaders are lagging behind in this,” Kugle said.

LGBT Muslims are more easily connecting with each other through the Internet, Alam said.

Gay and lesbian Muslims have formed local organizations in six

50

The number of LGBT advocacy groups who made an appeal for the gay community to reject anti-Muslim rhetoric cities, Alam said, along with some informal support networks, and hold an annual retreat. Still, these meetings remain largely private, a reflection of the continued difficulty of being openly gay in their communities. Several colleges now have Islamic chaplains, another source of support for young gay Muslims.

LGBT Muslims and their allies are also creating prayer spaces that welcome all sexual identities.

Among them are Unity Mosques, which began in 2009 in Toronto, that include mixed-gender prayer and women-led services, although the sites sometimes struggle to stay open, said El-Farouk Khaki, an immigration lawyer based in Toronto and founder of Salaam: Queer Muslim Community.

Imam Daayiee Abdullah, who works from the Washington area and leads the Mecca Institute, which offers Islamic courses from a progressive viewpoint, said he was ostracized by other Muslims when he came out as gay 20 years ago and was “not necessarily considered Muslim.” But in the last decade or so, he has noticed a growing receptiveness among American Muslims to at least listen to his arguments for acceptance.

Alam, who travels the country speaking to college students about being gay and Muslim, said coming out is still “an incredibly risky proposition” for many. He did so at age 19, to parents he said are “more tolerant than they are accepting.” He said he’s encouraged by the statements from many Muslim leaders after the attack in Orlando, but he hopes it’s more than lip service.

“I think there’s a sense within the community of ‘Is this too good to be true?’ What does this really mean that they stand with us? Is it theological acceptance? Is it just that we won’t stand in the way of LGBT rights in this country?” Alam said. “Those are the nuances that definitely have to be worked out.” AP

news@businessmirror.com.ph

Details emerge about wife of Orlando shooter

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ODEO, California—She was a sweet, pretty California girl with Palestinian roots who left an arranged marriage only to find love with a man who committed the worst mass shooting in modern US history.

Little by little, details have begun to emerge about 30-year-old Noor Zahi Salman, who grew up in the small suburb of Rodeo, California, tucked in the dry hills near the oil refineries 25 miles northeast of San Francisco.

Her romance with Omar Mateen—security guard, bodybuilder and Muslim— began online, according to a neighbor, and they were married on September 29, 2011, near her hometown, according to public records. The couple has a 3-year-old son.

Early Sunday, the 29-year-old Mateen opened fire at a gay nightclub in Orlando, Florida, leaving 49 people dead and 53 wounded.

Authorities believe Mateen’s wife knew about the plot ahead of time, said an official who was briefed on the progress of the case, but insisted on anonymity to discuss a continuing investigation.

The official said investigators are reluctant to charge her only on the basis of possible advance knowledge of her husband’s plans.

Three people identifying themselves as FBI agents visited Salman’s childhood home in Rodeo on Tuesday and spoke with her mother, said Jessie Rojas, a nextdoor neighbor.

In Fort Pierce, Florida, where Salman and Mateen lived, Salman made a brief visit to their first-floor apartment late on Monday, escorted by police and her brother-in-law. Her father-in-law said she came to retrieve clothing. She did not speak with reporters. She has otherwise been in seclusion.

According to marriage documents on file in the Contra Costa County Recorder’s office, Salman was born in the United States, while her parents’ birthplaces were listed as “Palestine.”

It’s unclear when her parents, who served as witnesses for the wedding, came to the United States, but their naturalization papers allowing them to stay in the country were approved in 1984.

No one answered the door at the Salman home on Tuesday, but neighbors who know the 2004 graduate of John Swett High School in nearby Crockett said they find it hard to believe she had anything to do with the massacre.

Jasbinder Chahal, who has lived across the street from Salman’s childhood home for the last 15 years, said Salman is “very nice...not the smartest,

but she was beautiful.

“You know, some kids after high school, they open up the box and the world is theirs. She was inside the box, just pack it up and get married,” said Chahal.

“They had a small wedding and took lots of pictures here at the house,” said Chahal. The marriage license says the ceremony took place in Hercules, California, and that an imam officiated.

Of Mateen, Chahal said, “He was shorter than her and did not seem very friendly.”

Chahal said Salman’s mother, Ekbal Salman, was deeply upset when she visited her on Monday night and said she feared for the safety of her daughter and grandson.

Salman’s parents tried to shelter their four girls as they grew up.

“Noor never played in the street, and the girls were never allowed to drive,” Chahal said.

The neighbor quoted Salman’s mother as saying Mateen also kept her daughter from driving, until he recently allowed her to take a test to get her driver’s license.

Salman’s marriage to Mateen was her second, said Chahal. Mateen had previously been married, as well.

Her first marriage had been arranged in the Palestinian Territories by her parents, said Chahal, adding that the union did not work out.

“He was in Chicago and they were living there, but they were not married long,” Chahal said. “They had cultural differences since she grew up here and was American.”

Mateen had met his first wife, Sitora Yusufiy, online, too. They married in 2009 after a whirlwind romance.

Yusufiy, who immigrated to the United States from Uzbekistan, has told reporters that Mateen was mentally unstable and abusive during their brief relationship.

She said she knew quickly that the marriage had been a mistake and she left him a few months later. The couple didn’t divorce, though, until June 21, 2011, just three months before Mateen married Salman.

On one of her sister’s Facebook pages—next to a family photo—there is a box with the words: “Solidarity with Gaza.”

Salman rarely came home to visit after she married because Mateen would not let her, Chahal said. She quoted Salman’s mother telling her that Mateen even tried to keep the daughter from traveling home to see her father when he was sick.

The younger Salman managed to scrape together the money to visit before her father died in a local hospital, Chahal said. AP

Body of boy snatched by gator found

US commander in Kabul submits assessment on war

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AKE BUENA VISTA, Florida—The body of a 2-year-old Nebraska boy, who was snatched off a Walt Disney World beach by an alligator and dragged underwater, was recovered on Wednesday, ending a ghastly search at one of the world’s most popular tourist destinations.

Divers found the body of Lane Graves about 16 hours after authorities first got the call that a reptile had taken the boy from the water’s edge at Seven Seas Lagoon despite his father’s frantic attempt to save the child.

Sheriff Jerry Demings said it appeared the gator pulled the child into deeper water and drowned him, leaving the body near the spot where he was last seen. An autopsy was planned.

“Of course the family was distraught, but also, I believe, somewhat relieved that his body was found intact,” Demings told a news conference.

The boy’s parents were identified as Matt and Melissa Graves of Elkhorn, Nebraska, a suburban area of Omaha.

A family friend released a statement on behalf of the couple thanking wellwishers for their “thoughts and hope-filled prayers.”

CEO Michael Iaccarino of Infogroup, a marketing company where Matt Graves is chief data officer, said Graves’s family “is the light of his life.”

In a statement from Disney World Resort President George A. Kalogridis, the company said it was “doing what we can” to help the family.

Disney World closed beaches around Seven Seas Lagoon during the search, and it was not immediately clear when they would reopen. AP

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ABUL, Afghanistan—The new US commander in Afghanistan has submitted his first three-month assessment of the situation in the war-torn country and what it’s going to take to defeat the Taliban, a US military official has told The Associated Press.

And though the content of the review

by US Army Gen. John W. Nicholson is secret, the US strategy in Afghanistan received a major incentive this month when President Barack Obama decided to expand America’s involvement with more air strikes against insurgents, giving the US military wider latitude to support Afghan forces, both in the air and on the ground.

The report—and Nicholson’s deployment to Afghanistan—came at a time of Taliban resurgence, with the group gaining ground in the southern provinces of the Taliban heartland.

After 90 days in the country, Nicholson has now “completed his assessment and submitted it to his chain of command at the Pentagon,” said a US military official in Afghanistan, speaking on condition of anonymity as he was not authorized to discuss the issue. Since all foreign combat troops pulled out of Afghanistan at the end of 2014, leaving only an advisory and training contingent of international forces behind, the Afghan military has struggled in leading the fight, its 195,000 soldiers learning as they go.

The 9,800 remaining US troops in Afghanistan are scheduled to drop to 5,500 by the end of this year, but the pace of that decline has yet to be decided. One factor in determining future troop levels is the extent to which North Atlantic Treaty Organization allies are willing to remain involved in training and advising the Afghans. AP

BusinessMirror

World The

A9 | Friday, June 17, 2016 • Editor: Lyn Resurreccion

Looting, unrest roiling Venezuela

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ARACAS, Venezuela—Venezuela, where anger over food shortages is still mounting, continued to be roiled this week by angry protests and break-ins of grocery stores and businesses that have left five dead, at least 30 injured and 200 arrested, according to various news reports.

The latest fatality came from the southwest city of Merida, where 17-year-old Jean Paul Omana died on Wednesday, after being shot on Tuesday during a disturbance amid looting.

Widespread violence has been reported there, as well as an attack by protesters on the headquarters of President Nicolas Maduro’s United Socialist Party of Venezuela, or PSUV. As consumers grow increasingly frustrated with ongoing food scarcities and lengthening lines outside stores, protests are turning more violent. A social media reported protests on Wednesday in the Los Teques, Los Altos Mirandinos and Santa Teresa del Tuy suburbs of Caracas, the capital.

A common thread among protesters demanding the government to provide food is that they are suffering from hunger and, in some cases, heat exposure from spending hours in line.

Mired in economic crisis, Venezuela must import the bulk of its food items, but supplies have run short because of the government’s cash shortage, triggered by falling oil prices.

The rising violence comes as US Secretary of State John F. Kerry said on Tuesday that his representatives would soon hold talks with Venezuelan officials in a bid to improve frayed bilateral relations.

Maduro says his country is the victim of a US-promoted economic war. The US says the increased chaos in Venezuela poses a security threat to the region.

On Wednesday most shops in the northeastern coastal oil-refining city of Puerto La Cruz remained closed because of fears of looting after armed forces subdued a student protest over the lack of food.

“We can’t take it anymore. Our children ask for food and all we can get are mangoes.

Until when?” said Milagros Perez of Puerto La Cruz, quoted in El Tiempo newspaper.

Two of the deaths and 150 of the arrests were reported on Tuesday in the northeastern coastal city of Cumana following two days of scattered riots, in which more than 100 stores were reported broken into, according to national media. Circumstances

of the deaths were still murky on Wednesday. Additional police officers have been sent to the city to restore order.

A 4-year-old girl, Britani Lara, was reportedly shot to death on Tuesday in the Caracas suburb of Guatire as she stood in line with her mother outside a government-owned Mercal grocery store.

El Nacional newspaper reported that gangs on motorcycles have fought over the right to control and distribute food at the Guatire store and that the gunfire may have been a result of that dispute. Eight others were reportedly injured in the incident.

Violence also was reported at a food protest staged in front of a store in the city of Cariaco in central Sucre state, where 21-year-old Luis Fuentes was killed by a gunshot. Eleven others were wounded, according to El Nacional newspaper.

Residents who live close to the store reportedly attached signs to the entrance demanding the business be closed because of the violence it generates.

“Gang members who want to take over the sale of food in the store threaten those who stand in line with knives,” neighbor Dubraska Gonzalez told El Nacional.

Venezuela’s Ministry of Communication and Information responded to an email requesting confirmation and the circumstances surrounding the five reported deaths by referring reporters to the VTV national television channel and to Twitter accounts of government officials.

Speaking on the sidelines of an Organization of American States meeting in the Dominican Republic, Kerry said talks would be held in Caracas and that the US would be represented by veteran diplomat Thomas Shannon.

Kerry made the announcement shortly after insisting that a referendum to recall Maduro be held. Opponents to Maduro collected more than 1 million signatures in favor of a referendum, but claim the government is using delay tactics to avoid a vote.

Maduro confirmed the talks and said he would propose that the two countries reestablish full diplomatic relations. No date for the start of talks was mentioned.

Los Angeles Times/TNS

EU leaders in Russia: Sign of easing sanctions

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AINT PETERSBURG, Russia—After a two-year break, which felt more like a boycott, European leaders and chief executives of top multinational companies are back at Russia’s top economic, gathering in a sign of weariness about European sanctions against Moscow.

Russia’s annexation of Crimea in March 2014 and its support for separatist rebels in eastern Ukraine landed President Vladimir Putin in international isolation. The European Union (EU) and the United States imposed economic sanctions and kicked Russia out of the Group of Eight of nations.

Once Russia’s showcase of its geopolitical weight and economic attractiveness, the Saint Petersburg Economic Forum—dubbed Russia’s Davos—was a sore sight the past two years: European leaders and heads of the major companies who once had lucrative long-term projects in Russia were nowhere to be seen.

This year’s gathering, however, signals what could be an emerging movement within the EU to ease economic sanctions on Russia.

The sanctions didn’t only affect the Russian economy by closing long-term EU lending to Russian companies but also triggered a Russian import ban on meat, vegetable and dairy products from the EU, dealing a heavy blow on agriculture-dependent nations, such as Greece.

European Commission President Jean-Claude Juncker, who is to address the forum later on Thursday, is the highest-ranking EU official to visit Russia since the Crimean annexation.

Juncker’s office, however, sought to downplay the significance of his visit, saying that it should not be interpreted as a sign that the EU will lift the sanctions when the time for review comes two months from now.

Another high-profile speaker is Italian Prime Minister Matteo Renzi, whose country was badly hurt when Russia closed its food markets to Italians along with other EU producers.

Moscow has sought to maintain good ties with Rome. While Putin was shunned in other European capitals, he was welcomed to Italy last year, meeting with Italian officials and Pope Francis. During their meeting last October, Renzi greeted Putin as Russia’s “dear” president and didn’t voice any criticism against the country’s actions in Ukraine.

Chief executives of major European companies who are either engaged in long-term projects in Russia or whose projects were affected by the sanctions are also coming this year, including the CEOs of oil company BP, the chairman of the board of Nestle SA and others. Moscow is keen to spin the attendance as a sign that European politicians have failed to convince businesses to break ties with Russia.

“We don’t go around trying to convince our European and American partners to lift the sanctions,” Russian Foreign Minister Sergey Lavrov said on Wednesday. “Those who imposed the sanctions, let them decide what should be done about this impasse they have created. But this impasse is slowly disappearing: the participant list of the Saint Petersburg forum is a testimony to that.”

US authorities, in their turn, were anxious to portray ExxonMobil’s participation as an exception.

“We’ve been very clear on our engagements with US companies that we believe that are clear risks, both economic and reputational, associated with top-level engagement with a government that is flouting the most fundamental principles of international rule of law by intervening military in a neighboring country,” US State Department Spokesman John Kirby said on Wednesday. AP

A10 Friday, June 17, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Emergency powers for the President?

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problem that everyone could see coming evolves into a serious situation, which then becomes a potential disaster. In desperation, there are suddenly calls for “emergency powers” be given to the president of the Philippines, as if the solution can only be implemented through some sort of divine rule.

We heard all of these before, when there was the potential of an electricity shortage. Now, we are hearing it again with regard to the traffic situation in both Metro Manila and Metro Cebu. We are also noticing the same kind of talk about the criminal gangs operating in Mindanao.

Let’s step back a moment. The Philippine government will spend over P3 trillion this year to conceptualize and operate programs dealing with such matters as national and domestic defense, public health, transportation and providing safety nets for the poorest among us. We do not ask the government to discover the “meaning of life,” invent a new rice cooker, or provide a method to keep the housecat from scratching the furniture.

All we want are basic services and security that are better provided by the collective government, rather than by the private sector.

So the Legislative branch of government is considering giving “emergency powers” to, at the least, one man; at the most to the Executive branch. What the House and the Senate should be saying is, “We are complete failures and need to be rescued by the ‘Magician of Malacañang.’”

The Management Association of the Philippines (MAP) said in a statement, “There must be an issuance of an executive order to...secure emergency powers for the President to address the crisis by mobilizing all government resources and undertaking necessary measures unhampered by appointment, procurement, budgetary and Commission on Audit regulations during its presidency.”

Wait a minute. Isn’t it the Legislative branch that wrote laws on “appointment, procurement, budgetary and Commission on Audit regulations”?

Using the election Statement of Contributions and Expenditures as an example, Congress wrote detailed and specific procedures and rules on virtually all aspects of political campaigns. If there is a problem, as MAP details, why hasn’t the legislature done something before this? If it is better to leave specifics in the hands of the government agencies, then why hasn’t Congress passed laws that give those agencies specific time and performance mandates to get their job done effectively?

But no, it is easier just to pass the responsibility and power to the Office of the President, which may not be a bad idea. “We cannot solve our problems with the same thinking we used when we created them,” Albert Einstein said.

Party-list Rep. Lito Atienza of Buhay is not agreeable to this solution saying, “Simple enforcement of laws and removing corruption in transportation and traffic management can solve the problem.” Fair enough. Then let’s start by filing criminal charges against all those who did not enforce the laws and who might have been involved in the corruption Atienza speaks of. And we should also make these crimes nonbailable.

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A privileged class James Jimenez

spox

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ccording to Republic Act (RA) 10742, also known as the Sangguniang Kabataan (SK) Reform Act of 2015, the SK elections will be synchronized with the barangay elections, which are scheduled to be held in October this year. So, it makes sense to start talking about the SK system now.

Perhaps the biggest change is the expansion of the SK electorate— also known as the Katipunan ng Kabataan—from youths aged 15 to 17, to those who are at least 15 but not more than 30 years old. Apart from that, however, the thing I am most commonly asked is, “Why do parents push their kids to run for SK?” Short answer? Privileges. Section 16 of RA 10742 outlines these perks, and it is a truly impressive list. All SK officials in good standing shall, during their incumbency: (1) Be exempt from payment of tuition and matriculation fees while enrolled in any public tertiary school, including state colleges and universi-

ties and those locally funded public educational institutions within or nearest their area of jurisdiction.

The national government, through the Department of the Interior and Local Government, shall reimburse said college or university the amount of the tuition and matriculation fees.

(2) Be exempt from taking the National Service Training ProgramCivic Welfare Training Service (NSTP-CWTS) subjects. Instead, concerned SK officials must submit written reports, preferably with photographs or other documentation of their participation in the implementation of the programs, projects and activities of the

Perhaps the biggest change is the expansion of the SK electorate— also known as the Katipunan ng Kabataan—from youths aged 15 to 17, to those who are at least 15 but not more than 30 years old.

Apart from that, however, the thing I am most commonly asked is, “Why do parents push their kids to run for SK?” Short answer? Privileges. barangay. Strong caveat, though: without those reports and documentation, or if the submitted reports are found false, the concerned SK official will lose this privilege.

(3) Be excused from attending their regular classes while attending regular or special SK meetings and Sangguniang Barangay sessions, in case of the SK chairman.

A certification of attendance shall be issued by the SK secretary, attested by the SK chairman and duly noted by the Punong Barangay and shall be submitted to the concerned faculty member and the dean of the educational institution, as proof of attendance.

In the case of the SK secretary,

the SK chairman shall issue the certification duly noted by the Punong Barangay. In the case of the SK chairman, the barangay secretary shall issue the certification of attendance duly noted by the Punong Barangay.

I suppose it goes without saying that any person who falsely certifies the attendance of any SK official will be criminally and administratively liable; (4) Be provided with Philippine Health Insurance Corp. coverage; and (5) Be entitled to receive actual traveling reimbursements as may be authorized by law, subject to the availability of funds: Of course, the travel has to be directly related to the performance of their functions as SK officials and is supported by appropriate travel orders.

Not bad, right? The flip side is that these perks ought to create in the public the conviction that SK officers should deserve them. Call me naïvely optimistic, but I hope that the elected are able to live up to that expectation, or if they don’t, that the public will hold them to account.

James Arthur B. Jimenez is director of the Commission on Elections’s Education and Information Department.

opinion@businessmirror.com.ph

Opinion

Time to rethink the sugar quedan system?

Summer for a moment takes the mind (After Conrad Aiken)

BusinessMirror

Tito Genova Valiente

Dr. Philip Randy Tuano

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Domestic sugar prices are typically higher compared to world prices. May 2016 retail prices of raw sugar in Metro Manila, as published in the Sugar Regulatory Administration (SRA), the government’s policy-making body on the commodity, range from P43 to P44 per kilo. On the other hand, world market prices, as published by the World Bank “pink sheet” or commodity-price data, showed that sugar prices are at 38 US cents (or around P17 to P18) per kilo. Given the wide disparities in prices, even including transport and marketing costs, sugar in the world market could still be drastically cheaper compared domestically.

There are many reasons for these high prices. One key reason has been the degree of government protection that the sugar industry had enjoyed in the past years.

A 2007 study for the World Bank

by Cristina David, Ponciano Intal and Arsenio Balisacan, all highly respected agricultural economists in the country, showed that sugar is the most highly assisted commodity in the country, compared to other major agricultural items.

Tariff rates for sugar have been typically above 50 percent, although they have gone down for imports from the Association of Southeast Asian nations. There are also a host of other reasons, including the lack of research and development, weak financing of farm and mill modernization, and the fragmentation in sugar land ownership that affects improvements in production efficiency.

However, another reason may be government supply intervention in the domestic sugar markets in the country, which is also known as the quedan system. This is a system in which the government intervenes in the market supply for sugar; during the start of the milling season in August of each year, the SRA allocates a certain portion of sugar to different markets, including those for exports to the United States, for domestic consumption, for reserves and for export to countries other than the US. This system was created for the orderly distribution of the US allocation (quotas) among different sugar producers in the 1930s, as many planters and millers wanted to sell their produce in the lucrative American market, which typically paid more than that of the local markets.

The quedan system continues to exist under the government executive order creating the SRA in 1986.

The SRA typically allots 5 percent to 10 percent of total sugar output to the US market each year (although in some years, especially when there is a tight supply situation in the domestic market, the allocation is zero or close to zero).

However, given that sugar prices are now lower in the US compared to the Philippine market, there may be no more rationale for undertaking this. Prices for raw sugar, found in the US Department of Agriculture Economic Research Service, in May this year show that these range from 28 to 30 US cents per pound (or P28 to P30 per kilo), slightly lower than the P1,800 per 50-kilogram bag (or P36 per kilo) millsite price for raw sugar in the domestic market.

By keeping the quedan and allowing exports to the US market, both local producers and consumers lose; the former due to the lower prices that they receive for their product, and the latter due to the fact that prices are slightly higher in the domestic market given the less supply of the commodity, as some of the local sugar output is exported. The government even realizes this as the market allocation to the US market in the current crop year is currently zero, given expectations of the tight supply due to the weather disturbances in the country.

At the same time, the quedan system provides justification for the government to limit the amount of sugar into the country. Traders that import sugar need to receive clearance from the SRA before it is released from Customs, and is classified under one of the markets under the system. Many observers view the quedan as a so-called nontariff barrier, which constrains trade in the commodity, and is apparently not allowed under multilateral trade rules. While the government has, at times, been responsive to domestic prices by periodically adjusting the amount of allowable importations (just this month, the government has increased sugar imports by 100,000 metric tons), the experience in previous years had been that the volume of sugar imports has not adequately correctly the high prices of the commodity.

The incoming agriculture secretary, Gov. Emmanuel F. Piñol, has recently emphasized the importance of efficiency in marketing of food produce and lowering food prices.

Therefore, a challenge to the new dispensation is to examine whether keeping the quedan system would ensure that this happens.

Better late than never Teddy Locsin Jr.

Free fire Continued from A1

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o abolish slavery, the Americans divided and famously fought, said Oswald Spen-

annotations

EAGLE WATCH

ne of the priorities of the incoming Duterte administration is to ensure that each family is provided with food on the table; this means providing families with an affordable supply of agriculturally based items. Although rice has commanded the attention of policy-makers and academics during the past decades, sugar has been a key raw material in many of the food items that are purchased by households. While sugar comprises only less than 1 percent of total household budgets, it comprises 6 percent of all agricultural inputs in food-processing industries, and more than 10 percent of all inputs in the alcohol and beverage, and bakery and bakery products sectors.

gler, Hitler’s favorite historian, the first modern war in history—in scale, brutality, modern technology and continental strategy. In that sense, America pioneered the

Friday, June 17, 2016 A11

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alendar is man-made. The seasons that a calendar demarcates are not of nature, but culture; not of the gods, but of humankind.

A friend is elated that he is on a third summer leave from a Jesuit school, but his summer begins in June and ends in August. This is not the summer of our youth, of our generation. Summer years ago began in March and ended in May. The month of June was not summer anymore, because then it ushered in the rains, which were first welcomed

by May. Agua de Mayo was the first rainfall in May, auspicious and rare.

One anticipated the rain in May, because the months before it were usually dry and arid. The rains in May are used, they say, to fill those big conches at the entrance of churches.

They were very good for holy water.

They brought in graces and benefits.

But May was chosen because it is, at the end of that summer, the terminus of the dry spell, and the long hot days and nights.

There are still many schools that use the Philippine summer, which

we can call now the “old summer.”

This is the summer of circumcision for boys and flower festivals for girls.

Changing months for a season is disturbance. Things are never going to be the same again.

Heat and humidity, which are part of the experiences of March and April, are part of the social life of students and teachers. The months have not really altered; we are the ones who have moved, shifted in manners and good conduct in relation to these months.

The things we did last summer.

Which summer is this.

But certain songs will have more meaning for some people. I­‘ ll see you in September when summer is gone. Indeed, summer for some is not far off anymore; it follows August.

But something will happen to August. If May loses its beneficent water, August loses its sting. It is

the end of summer, and not the anomalous month that is neither here nor there.

Perhaps, it is best to go back to the wisdom of a poet. Conrad Aiken, in “Winter For a Moment Takes the Mind,” says: “What is the flower?/It is not a sigh of color/Suspiration of purple/ Sibilation of saffron/Nor aureate exhalation from the tomb/But it is these because you think of these.”

Aiken closes his fragrant thoughts with these: “What is the frost?/It is not the sparkle of death,/The flash of time/s wings, the seeds of eterni-

ty/Yet is there because you think of these/And you, because you think of these, are both/Frost and flower, the bright ambiguous syllable/Of which the meaning is both no and yes.”

Then we are all of these two summers, as we continue to reckon with time, which could be infinite, but could also be limited, demarcated by schedules of classes and measurement of the number of years needed to produce men and women for the globe.

E-mail: titovaliente@yahoo.com.

Close-Up and corporate social responsibility

The 30-second TVC has become a stepping stone of sorts for many advertising models who were lucky enough to have been chosen as endorsers of Close-Up, a toothpaste brand produced by Unilever. It has even boosted the celebrity stock of some newcomers to the country’s vibrant albeit flippant movie and TV industry.

The TVC also cemented CloseUp’s hold on the highly competitive toothpaste market by targeting the exuberance of the youth, thereby differentiating it from competing brands, which focused mainly on dental health.

After all, the health of its bottom line is the top priority of most consumer companies like Unilever, which, if recollection serves me right, has never experienced being in the red.

This is why the recent Close-Up Forever Summer concert tragedy, where five people died from drug overdose, must have jolted the brand from complacency. Probably, for the first time in its corporate life, the people behind the Close-Up brand must have felt extremely vulnerable, what with the victims’ families, the

public and the police closely keeping tabs on the company’s every move.

The National Bureau of Investigation said an autopsy indicated that all of the victims died within hours (between the afternoon of May 21 and the early hours of May 22 of this year) after ingesting a concoction of prohibited drugs. The National Capital Region Police Office, for its part, confirmed that the five casualties were among the 14,000 people who attended the 12-hour concert at the Mall of Asia parking area.

Just how effectively is the company handling this crisis? Is Unilever attuned to the new corporate order of the triple bottom line: people, planet and revenue? How sensitive is it to corporate social responsibility (CSR)?

Sometimes called corporate ethics, corporate citizenship or accountable business, CSR has evolved from self-regulation into a unified business model. CSR acts as an internal device with which companies monitor and certify their active acquiescence to the spirit of the law, moral values and national or international norms.

Some companies go beyond com-

pliance and involve themselves in actions that seem to uphold social good, well beyond their interests but still within the essence of the law. Of course, the aim is still to get as much long-term profit and shareholder trust. This, they accomplish via positive public relations and high ethical standards to minimize business and legal risk by taking responsibility for corporate actions. Through CSR, the company is encouraged to make a constructive impact on the environment and stakeholders, including consumers, employees, investors and communities, among others.

There are still those, however, who remain unconvinced. They scoff at the “lofty” and occasionally “impracticable hopes” in CSR. They aver that CSR is merely icing on the cake, or an effort to preempt the government’s role of being a watchdog over powerful transnational corporations.

For instance, was Close-Up “giving back” to its market when it staged the Forever Summer concert?

Was it purely an altruistic act where it wished to make its youthful consumers happy through “heart-pounding” song-and-dance numbers?

The fact that tickets were sold for hefty sums may raise doubts about the concert being a way of giving back to its consumers for their continued patronage. It’s also a clever marketing tact to convince noncustomers to switch to Close-Up. Lest I be misunderstood, I am not saying that this is a bad thing. But because Close-Up is the producer, it must bear a heavier accountability over the 14,000 or so souls that it herded à la Pied Piper to the suffocating environment of its concert venue.

Although the concert is coordinated through other agencies, such

first and second World Wars.

But it was the Catholic Church, with less ambivalence than Lincoln, that doctrinally condemned slavery on the ground that we are all descended from Adam and Eve; and all are promised salvation by Christ. But it was the British who first waged war to abolish slavery.

The British navy captured slave ships and bombarded slave markets. At the Congress of Vienna for the division of the spoils of victory over Napoleon, Britain

offered territory conquered with British blood in exchange for a European commitment to abolish slavery worldwide.

And, finally, it was earlier in history and in the rest of the world that women were raised to the highest and most powerful positions in the land, from Egyptian queens to Chinese empresses, English queens to Russian czarinas. And Filipino presidents—two already in just 30 years. But last week the Americans nominated, but have yet

to elect, the first woman presidential candidate in its entire history.

It was British women not American who were the first suffragettes. And French women attained political equality way before anybody else: By killing their king and queen, While knitting at the foot of the guillotine.

My rhyme. The Philippines was the first and the only country to officially offer refuge to the Jews before World War II. And we broke the tie to create the Jewish state

Val A. Villanueva

Businesswise

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staple television commercial (TVC) during my growingup years featured a handsome young man and an equally stunning girl confidently flashing their shiny white teeth and getting close enough to smell each other’s minty fresh breath.

Through the decades, the commercial models have changed but the concept remained basically unchanged.

as Eventscape Manila (engaged by Close-Up to primarily handle the stage production and the Technical set-up of the show) and Activations Advertising (tasked by Close-Up, to handle event ticketing), CloseUp, as the main proponent, should shoulder the full responsibility of this tragedy.

In fact, the Sangguniang Panlungsod of Pasay City has absolved Eventscape of any liability. It finds that the “only involvement of Eventscape was merely the securing of permit from the city government and the setting up of the stage to be used by the guest performers…they have, in any way, no participation in the security of the event.”

To be fair, Close-Up did not wish for the tragedy to happen, and there are reports that the victims consumed the prohibited drugs outside of the venue. Strictly speaking, it is the menace of the ever-growing drug trade that our law-enforcement authorities should really focus on.

But then again, from where do the victims’ families get the justice and closure that they so deserve? I believe that Close-Up should take all the necessary steps to help the victims of this tragedy.

Nobody loses in doing communally accountable initiatives. At the very least, it will paint your company in a positive light for being a socially accountable enterprise. By being transparent, honest and responsive, a company will be able to earn and keep the public’s trust and the consumer’s loyalty. Escaping or shirking from responsibility would only leave a bad taste in a Close-Upcleaned mouth.

For comments and suggestions, e-mail me at mvala.v@gmail.com.

of Israel. The Philippines was the first—after Boudicca, the warrior queen who beat a Roman tyranny—to pick a woman to beat a native one.

Like Hillary Clinton might do, Cory beat a misogynist who dismissed her as “an inexperienced housewife.” She pleaded guilty to the charge of having no experience whatsoever in killing, stealing and cheating. But, as they say, better late than never. Congratulations, America.

2nd Front Page BusinessMirror

A12 Friday, June 17, 2016

www.businessmirror.com.ph

Groups: Geothermal expansion project threatens Negros Oriental’s Mt. Talinis

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By Jonathan Mayuga

@jonlmayuga

ause-oriented groups in Negros Oriental are up in arms against the reported expansion activities being undertaken by the Energy Development Corp.’s Southern Negros Geothermal Project (EDCSNGP) in Mount Talinis.

Notwithstanding the consent of concerned government agencies, the groups said the expansion activities threaten the old growth forests within the 23,565-hectare Mount Talinis range.

The group also chided officials of the Department of Environment and Natural Resources (DENR) for allegedly showing its bias for the proponent of the “destructive” project.

The area targeted for clearing represents the remaining 1 percent of Negros Oriental’s virgin forest, Zeph Repollo, coordinator of 350 Pilipinas, a national grassroots climate action network, told the BusinessMirror in an interview.

“In their proposal to the DENR, they intend to use 30 hectares,

but the permit they are seeking covers 5,000 hectares. This is the remaining forest in Negros Oriental. We consider it our last frontier,” Repollo says.

Early last year, the EDC-SNGP allegedly felled a total of 576 trees, most of which are century-old trees within its geothermal plant.

“We learned only about this recently. After we learned from communities that they are again starting to clear more areas, we decided to call the attention of the DENR,” Repollo said.

She lamented, however, that instead of meeting with the complainants, officials of the DENR from the Environmental Management Bureau (EMB) office in Manila and Negros province allegedly went directly to meet with of-

ficials of EDC-SNGP. She suspects that the ongoing expansion activities, like the previous expansion that resulted in the felling of 576 trees, is being conducted without the benefit of an environmental compliance certificate (ECC), which, she said, should had been enough to stop the ongoing expansion project.

“The destruction right before our own eyes is not permissible by any ECC or [any] permits. At whatever level of EDC’s operation that brought our trees down must already be stopped. We do not believe that we have to sacrifice our natural forest for geothermal energy when we know for a fact that it is not the only source of renewable energy in the province,” she added.

Mount Talinis, Repollo explained, provides water security to 16 towns and cities in the province. “There are watersheds in Mount Talinis, which we need to survive because it is our water source. Besides, there are communities that will be displaced by the expansion project.” Repollo said, adding that more century-old trees will soon be cut down if the DENR fails to step into the picture.

350 Pilipinas’s campaign to stop the expansion of the geothermal project in Negros is supported by 350 Negros, Save Mount Talinis Movement and Fardec Inc., which

brought the issue to the DENR-EMB in April. The Kalikasan-People’s Network for the Environment, a network of environmental groups, also issued a solidarity statement in support of the campaign to protect Mount Talinis.

Also known as Cuernos de Negros, Mount Talinis is a complex volcano. At about 1,903 meters above sea level, it’s the secondhighest mountain on Negros Island, next to another active volcano, Mount Kanlaon.

The EDC-SNGP generates 192.5 megawatts. Mount Talinis is near the Balinsasayao Twin Lakes Natural Park (BTLNP), a national park established on November 21, 2000,

by Proclamation 414.

It is a most visited park of which the twin crater lakes of Balinsasayao and Danao are located. Together with Lake Kabalin-an, a smaller lake, the three lakes within the Guintabon Caldera are the most visited sites in the province.

Mount Talinis has a rich biodiversity but is also threatened by illegal-logging activities.

The lakes around Mount Talinis contain freshwater shrimp, snails, carp and tilapia, and its forest is home to endemic and rare wildlife, including the ciritically endangered tarictic hornbills, Philippine spotted deers, Visayan warty pigs, Philippine tube-nosed fruit bats and Negros bleeding hearts.

The destruction right before our own eyes is not permissible by any ECC or [any] permits. At whatever level of EDC’s operation that brought our trees down must already be stopped. We do not believe that we have to sacrifice our natural forest for geothermal energy when we know for a fact that it is not the only source of renewable energy in the province.”—Repollo

Interconnection. . .

“This is a welcome development, one that we’ve been waiting for, for years now.

The two telcos are doing now, in the span of a few months, what they couldn’t or didn’t want to do over the past decade,” Mary Grace Mirandilla-Santos, an independent researcher on information and communications technology and telecommunications policies, told the BusinessMirror.

International Data Corp. (IDC) Philippines Analyst Alon Anthony D. Rejano agreed, explaining that this would result in better Internet experience in the Philippines.

“We could think that this should have been done a long time ago. But the development of the two telco giants forging an alliance for peering practices can help speed up Internet connection and provide better Web experience to consumers, which is good because it benefits every Internet user,” he told the BusinessMirror.

Globe has been pushing for the interconnection of its network with that of PLDT since 2010, but PLDT was reluctant with the idea, citing the imbalance in network users.

On Thursday the two companies, in yet another surprising and unusual turn of events, agreed to the proposal.

According to PLDT Inc. EVP Eric R. Alberto, his company signed the memorandum of agreement with its rival after reaching mutually beneficial commercial terms.

“That imbalance in Internet traffic is being addressed commercially. We now know how to commercially analyze and address the imbalance,” he said.

Never too late

Ramon R. Isberto, the spokesman of the telco giant, added it took the two telcos a couple of years before reaching an agreement due to commercial reasons.

“We were finally able to work out mutually acceptable formula to approaching this. Otherwise, we would have struck a deal earlier,” he added. Globe Chief Technology and Information Officer Gil B. Genio, for his part, explained that the agreement signed on Thursday is just a prelude to two more steps.

“A formal peering agreement is set to be signed by both companies within three months,” he said, referring to the second step.

The third tranche of the agreement is for both companies to agree to publicize and make available their autonomous system numbers for domestic peering.

With an effective domestic Internet peering in place, Globe customers will gain direct access

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to content and applications hosted by PLDT data centers and vice-versa. Under the agreement, Globe will put in a 10-Gbps link and port for domestic peering between the two companies.

The bilateral domestic peering will cover PLDT-managed networks such as Smart, Sun and Digitel and the Globe networks that include Globe mobile, Bayantel, Ayalaport and Globe data center.

The agreement, however, does not cover the Vitro Internet Exchange, which houses PLDT’s data centers as Globe already has an existing peering arrangement with Vitro involving a 10-Gbps link.

“We are confident that this agreement will redound to a better experience on Internet services benefitting customers of both parties and the country as a whole,” Genio said.

Essentially, the peering of Internet protocols (IPs), allows the exchange of Internet traffic among data service providers, making it faster for the transfer of information from one point to another.

To do this, Internet service providers (ISPs) have to be linked via an Internet exchange.

Without IP peering, local in-country Internet traffic need to travel out of Philippine borders and be exchanged abroad before reaching its local destination.

Enterprises that are IP peered will have cost savings, as local in-country Internet traffic exchanged through an exchange will not count against the use of international network links or backhaul usage.

As local in-country Internet traffic will not need to transit abroad, service providers will exchange with each other lower latency—that is, better response times—and deliver this lower latency for the enjoyment of consumers.

Lower latency for consumers means a faster, more reliable, and more stable Internet connectivity experience, particularly for e-commerce transactions with businesses, financial institutions, and government frontline services.

Simply put, IP peering allows consumers to enjoy “more robust, fault- and attack-resistant network infrastructure, which is personally important to consumers in their transactions through the Internet, such as tax filing, banking, e-commerce, Skype conversations with family and friends overseas, among the many uses of fast, reliable, and inexpensive Internet.”

Because of this, IDC’s Rejano believes that the peering practice would also mean better productivity and efficiency for Internetenabled enterprises.

DFA fingers China for failure of Asean to issue statement

By Recto Mercene @rectomercene

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HE Department of Foreign Affairs (DFA) cited China for wielding its influence on leaders of the Association of Southeast Asian Nations (Asean) for the failure to issue a common statement on the South China Sea (SCS).

“The meeting at Kunming was a retreat style, but China was able to intervene and influence the members,” Foreign Spokesman Charles C. Jose said. “That is why Asean failed to issue a statement.”

Jose spoke to reporters on June 16, the day the DFA issued an official statement after the Special Asean-China Foreign Ministers’meeting in Kunming, Yunnan Province, China, on June 14.

Issuing separate statements that day were four other member-countries—revealing cracks in unity of a regional grouping claiming to move toward one Asean community.

While citing the foreign ministers of the countries represented in the Kunming meeting as agreeing “to enhance Asean-China cooperation on the basis of the principles of equality, mutual benefit and shared responsibility in the interest of achieving national and regional prosperity,” the DFA statement showed a divided grouping unable to come together on the issue of the SCS. A purported Asean-China statement was released to the media but was later retracted, apparently because China did not agree to the strongly worded message concerning the Communist Party-led country’s military buildup at the SCS. According to Jose, other countries that have shown solidarity with the Philippines’s stand in the SCS included Indonesia, Malaysia, Vietnam and Singapore.

However, after the meeting’s host Lao PDR withdrew from a communiqué, Indonesia, Malaysia, Myanmar and Thailand followed.

These countries, according to Jose, have huge economic ties with China.

Jose said there was an initial consensus among the participants to issue an Asean agreement and have agreed to its content.

However, he said that, when the foreign ministers, including Foreign Secretary Jose Rene D. Almendras, left the meeting, they did not know what happened next.

Jose said the retracted statement was “an Asean statement and not China’s.” Jose added he is not aware if another Asean-China joint communique would be issued. Jose said the first communiqué had been circulating in the Internet.

The earlier communiqué reads in part: “We expressed our serious concerns over recent and ongoing developments, which have eroded trust and confidence, increased tensions and which may have the potential to undermine peace, security and stability in the [SCS].”

The nation that was eroding “trust and confidence”in the strategic waterway was unnamed.

But China, which has embarked on an ambitious island-building campaign in disputed waters, and has blamed the United States for masterminding any regional conflict, was mentioned elsewhere in the statement.

“We also cannot ignore what is happening in the South China Sea,” the communiqué read, “as it is an important issue in the relations and cooperation between Asean and China.”

While the statement seems harmless, it hinted at a rebuke to China’s preferred approach of negotiating bilaterally with each rival claimant, rather than facing the united front of a regional body, pundits were quoted in reports as saying.