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Tuesday, June 21, 2016 Vol. 11 No. 255

Bello also placing bounties on illegal recruiters’ heads

By Manuel T. Cayon | Mindanao Bureau Chief @awimailbox

avao City—In the Duterte administration, illegal recruiters would be hunted down much like drug lords—with bounties on their heads. This was announced by incoming Labor Secretary Silvestre H. Bello III on Monday, as part of his plan to curb human trafficking.

“I would put up a reward system for informers to pinpoint who and where these illegal recruiters are,” he said in an interview with

We will kill their business.”—Bello

dxRP Radyo ng Bayan here. Bello did not say where he would tap the funds for the bounty and how much would be the reward. Earlier, President-elect Rodrigo R. Duterte announced during his victory party that he will pay Continued on A12

INSIDE

‘DORY’ SWIMS TO BOX-OFFICE RECORDS

SHOW

Dominguez: P-Noy failed in inclusive-growth tack

inance Secretary-designate Carlos G. Dominguez III, who could be the face of macroeconomic-policy crafting when President-elect Rodrigo R. Duterte takes over in less than two weeks, downplayed the role played by the country’s macroeconomic underpinnings, saying while their role in helping build a stronger, more self-sustaining economy may not be denied, the policy choices under the vaunted straight-and-narrow path of President Aquino has not proven equitable either. He told those gathered at the Sulong Pilipinas Business Conference in Davao City on Monday new yardsticks to measure the economic impact of government programs needed to be applied. “The macroeconomic numbers, however, do not tell the whole story,” according to Dominguez. “We need new metrics to understand how economic expansion could be made more meaningful for the majority of Filipinos. It is not enough to say the economy is growing. We have to develop measures that will show us how that economic growth con-

SURVEY by Kaspersky Lab ZAO revealed children were given smartphones because their parents think not having a device would lead to isolation from peers.

(42 percent) have claimed that they are equally afraid to lose friends online and offline, and one in 10 (11 percent) are more afraid to lose friends online than offline. Use of modern communication platforms is a major online activity for young people, including social media (35 percent) and messaging apps (35 percent). The research also reveals that the older children get, the less likely they are to meet friends face to face, preferring to use instant messengers, social networks and SMS to communicate. About 76 percent of kids polled and who are between 8 years old and 10 years old prefer real world contact, as opposed to only 46 percent of teenagers aged 14 to 16. “Online communication has become such a substantial part of modern kids’ lives that parents should be paying extra attention to it,” Andrei Mochola, Kaspersky Lab Consumer Business head, was quoted in a statement as saying. “It’s important

UMBER cr unchers are urged to prepare for disruptive technologies, as member-countries of the Association of Southeast Asian Nations lurch forward to an Asean Economic Community (AEC). As Asean embraces the concept of an integrated smart region with the establishment of the AEC at the end of last year, t he rapid g row t h of mobi le,

a na ly t ics a nd c loud tec hnolo g ies w i l l br ing about a g reater interconnectedness among accou nt a nts in A sea n, a st ate me nt b y t he A s so c i at ion of C h a r tered Cer t i f ied A ccou ntants (Acca) sa id. T his w i l l see t he need for accou nt ing a nd f inance professiona ls to adopt new sk i l lsets in order to work sea m lessly ac ross borders. “Amid a wave of disruptive

LOUD collaboration requires careful consideration. Information technology (IT) procurement has historically been a long and complex process. Just setting requirements, conducting supplier reviews and doing proof of concepts could take months and even years.

that parents are as vigilant as possible to the threats and aware of what their k ids are doing on the Internet. It is also very

technological innovations expected to transform the accounting sector, larger firms may have the resources to make decisive moves to prepare for the future, but smaller firms may be grappling with resource challenges and are unable to do so,” Indranee Rajah said during the Acca meeting in Singapore on June 17. “Take small steps, and be open to embracing new technologies

important to talk to the child, explain online dangers and the advantages of communicating in the off line world.” Oliver Samson

and acquiring new skillsets,” Rajah, Singapore senior minister of state for law and finance, said during her keynote address. Acca’s meeting comes after the International Data Corp. said in April that financial services IT spending will reach almost $480 billion worldwide in 2016, with a five-year compound annual growth rate of 4.2 percent. Dennis D. Estopace

mmda to use oPen garden’s messaging aPP in disaster drill

PEN Garden Inc. (OGI) announced on June 16 the Metropolitan Manila Development Authority (MMDA) will use the San Francisco-based startup’s technology for the June 22 disaster drill. Called “FireChat,” the OGI said the technology allows users to send alert messages via handheld devices even with cellular networks down. “A lerts are transmitted directly from one smartphone to the next and reach people who

would otherwise be unreachable because networks are not available or because they don’t have load,” OGI’s statement said. According to OGI, the MMDA will be the first organization in the world to use FireChat Alerts, a messaging app for free download on Android or iOS devices. The disaster drill would simulate a scenario in an event of a of 7.2-magnitude earthquake along the West Valley Fault System that traverses the metropolis. In such

The Entrepreneur

Chris Chelliah

accountants urged to PrePare for disruPtive tech in aec bid

scenario, traditional communication networks will be rapidly congested and physical infrastructure may get severely damaged, making the dissemination of critical information extremely challenging and complicating rescue operations. “It’s a scientific reality that a major earthquake could hit Metro Manila and its 22 million inhabitants at any moment. In the event of a 7.2-magnitude earthquake coming from the West, there would

be at least 35,000 casualties and 100,000 people injured,” MMDA Chairman Emerson Carlos was quoted in the statement as saying. “We are very interested in exploring how FireChat Alerts can help maintain vital communication lines between the MMDA and the citizens of Metro Manila during an event of this scale.” Carlos added that deploying this technology during a preparedness drill “is the perfect way to understand its potential.” Rizal Raoul Reyes

One of the major attractions of cloud, therefore, is the rapid setup and deployment of services, made possible by the fact that organizations don’t need to select, buy and install individual hardware infrastructure. Instead, they are able to make purchasing decisions about a business outcome, based on a simple benefits and pricing models. This makes IT innovation much more flexible and agile, and less complicated and time-consuming to get up and running. You could be forgiven for thinking this means cloud computing is to enterprise technology what Tinder is to the dating world. If there isn’t a match, you can always swipe right to move on. But, as in life, selecting a partner is more complicated than that and not quite as easy as cutting ties in a relationship when things don’t work out. Making your choice and managing the subsequent relationship requires careful consideration. To start with, implementing cloud-based technologies isn’t as simple as pressing the “on” switch. It needs to be done in a way that supports existing business processes and legacy technology, while enabling new ways of working. If you start using the cloud without paying attention to what is already present in your organization and how the new service will interact with existing systems, the efficiency and flexibility benefits of cloud won’t be fully realized. The “wiring in” of new technology takes time and often requires d i f fe re nt c lou d p a r t ne r s a nd technolog y companies to work alongside each other to ensure ever ything functions in the way it should. A new cloud partner must therefore be w il ling and able to work in this way. And if your cloud implementation proves unsuccessful or your requirements or strategy change, there is the challenge of switching everything—from data through to workloads and applications—over to a new provider. This is a process that shouldn’t be taken lightly, given the strict regulations that govern the movement and location of data.Another key consideration when selecting a cloud partner is ensuring that

the provider supports the full range of different cloud services required across the different layers of cloud: infrastructure, platform and software. It is often the case that organizations dip their toe in the water with one cloud application, say, for HR, and as a result of the success, move other applications to the cloud, to support their sales or service departments or to manage finance and payroll. Often because of business processes, these applications need to interact with each other, and so it can be useful to work with organizations that offer a suite of applications that can easily integrate with each other. If you have cloud-based applications you might want to extend or customize them. W hile an early requirement might just be for compute and storage (infrastructure) to build on applications, you might decide to add new capabilities, such as mobile channels and data visualizations (available as platform services), in the future. Typically, working with the same company will bring greater efficiencies and more effective processes than cobbling technologies together from a range of sources, and make ongoing management of them a far simpler task. Another aspect to consider is that cloud computing is still relatively young in its lifecycle. It’s highly likely that there will be significant vendor consolidation over the next five years as the sector matures. It is therefore worth considering the likely longevity of your cloud provider, and product road map. This is a fast-moving space, where you expect new features and capabilities to be added in regular upgrade cycles. Like any human relationship, selecting the right cloud partner requires collaboration and a period of getting to know each other, in order to ensure you develop and grow together over time.

BELIEVELAND!

LeBron James and the Cavaliers achieve what is supposed to be improbable by beating the Golden State Warriors, 93-89, in Game Seven of the National Basketball Association Finals on the road on Sunday in Oakland. The Cavaliers did not only rise from a 1-3 hole in the best-ofseven Finals, but as important, ended a 52-year major sports championship drought in Cleveland. AP

Chris Chelliah is group vice president and chief architect, Core Technology and Cloud, Oracle Asia Pacific. The views expressed by Chelliah in this guest column do not necessarily express that of the BusinessMirror’s.

BMReports

aPPle iPhones violated chinese firm’s Patents, beijing bureau rules

the new iPhone se draws attention at the company’s product launch event at apple headquarters in cupertino, california, on march 21. KARl MONDON/BAY AREA NEWS GROuP/TNS

HINA is providing Apple with one of its most lucrative markets. It’s also giving the tech giant no shortage of headaches. In another hiccup with regulators, Beijing’s patent office has ordered Apple to stop selling its iPhone 6 and iPhone 6 Plus in the city because its design too closely resembles that of a Chinese phone. Apple is appealing the ruling, which m a r k s t h e l ate s t c h a l l e n g e to t h e Cupertino, California, company in its second-largest market after the Americas. The t wo iPhone models violated design patents held by Chinese device maker Shenzhen Baili because of similarities in ex ternal design with the company’s 100C phone, the Beijing Intellectual Property Office wrote in a statement on its web site.

Apple said in a statement it will continue to sell those iPhone models in Beijing as it appeals the decision. Because the ruling applies only to sales within the city of Beijing, analysts doubt the ruling will affect Apple’s bottom line. “We do not think the case will have any negative impact on Apple’s revenue and margin in China,” Amit Daryanani and Shawn Yuan, of RBC Capital Markets, wrote in a research report. Analyst Gene Munster of Piper Jaffray said the spat illustrates the ongoing “friction between Apple and the Chinese government.” “Even if they do get banned, they’ll come out with new phones and they’ll be selling those phones, Munster said. “It’s a little bit of a carnival going on between Apple and China.” Apple shares closed at $95.33, down

$2.22, or 2.3 percent. Angelo Zino, equity analyst at S&P Global Market Intelligence, said the market’s reaction shows investors aren’t greatly concerned about the patent issue itself. “Does it impact anything on the fundamentals today? No. Could it alarm investors of other issues that could potentially happen in the future?” he asked. “I think that’s why maybe you see the stock trading where it is.” Apple had to shut down its iBooks and iTunes Movies services in China in April because of violations of foreign publishing regulations. In May Apple lost the right to maintain exclusivity of the “iPhone” name, as a Beijing court ruled that an accessories maker could use it on a line of luxury leather goods. While Apple jousts with the Chinese government, Chinese consumers have

delighted in the company’s products. S a l e s i n G re at e r C h i n a — i n c l u d i n g mainland China, Hong Kong and Taiwan—amounted to 25 percent of Apple’s revenue in the second fiscal quar ter. Apple, which makes around two-thirds of its revenue from iPhone sales, has cashed in on the mobilephone boom in China, the world’s largest smartphone market. There, its iPhones have been seen as a status symbol. But the Chinese market has become increasingly competitive, with local rivals offering similar products at much lower prices. In March Apple responded to that pressure by unveiling a smaller, 4-inch version of the iPhone, called the iPhone SE, which will retail at $399. The iPhone 6 retails for $549, and the iPhone 6 Plus for $649. TNS

Digital life

K to 12 Whither Philippine education?

Not this time!

Sports

COLOMBIA’S Miguel Angel Lopez Moreno of Astana Pro Team celebrates his victory. AP

BusinessMirror

Eventful 0-0 draw in Euro 2016 clash

ILLE, France—Though teams often swap shirts with their opponents after a game, Switzerland’s players were forced to change their own ones several times in an eventful 0-0 draw with France at the European Championship on Sunday. Along with the four ripped shirts there was another unusual sight, as the ball burst in the second half of a draw that sealed Switzerland’s place in the last 16, alongside an alreadyqualified France. Granit Xhaka, who tore his shirt once in each half, joked that perhaps some shirt tugging from the French was involved, because “it’s the only way to stop a Swiss player.” But in reality, France was the stronger side and squandered several scoring chances— which it also did against Romania and Albania. The result ended up suiting both, with France taking first place in Group A and the Swiss advancing in second place. Tournament host France hit the crossbar twice, courtesy of spectacular strikes from Paul Pogba—from 25 meters—and substitute Dimitri Payet—with a volley on the run from Moussa Sissoko’s cross. Switzerland caught the eye more for torn shirts than attacking play. “It means there was a lot of fight on the pitch,” Switzerland goalkeeper Yann Sommer said. Switzerland midfielder Admir Mehmedi’s shirt was torn in the first half, forcing him to the sidelines for a backup. “We spoke with the referee about it,” Switzerland midfielder Valon Behrami said. “But he said: ‘it’s the fault of your shirt.’” Teenage striker Breel Embolo also slightly tore the back of his in the first half. “If a shirt is pulled, they can come apart,” Switzerland Coach Vladimir Petkovic said. “When you pull shirts they do actually break.” France Coach Deschamps preferred to turn his attention to the rough state of the pitch, which cut up in places. “It was better than the pitch we saw at Marseille [against Albania] but it’s annoying,” he said. “I don’t know who is responsible, but we are only in the group stage of the competition and having such a pitch is not a good thing.” Then there was the match ball, which also came in for punishment. As France pushed for a goal in the second half, forward Antoine Griezmann was dribbling when Switzerland midfielder Valon Behrami stepped in to tackle. The two converged on the ball and it burst, with Behrami picking showing it to Slovenian referee Damir Skomina.

Continued on A12

BusinessMirror

Tuesday, June 21, 2016

the best Parents induce kids Taking approach to cloud to use smartPhones

The Russian cyber-security firm said a commissioned research revealed over half of parents polled (52 percent) provide their children with mobile devices so that they can communicate with their peers. Likewise, one in four (27 percent) parents provide their children with connected devices because of concerns that their child would be treated as an outsider without them. Kids are increasingly using connected devices as an essential means of communicating with their friends and peer pressure is playing a role in pushing modern friendships online. The research revealed 44 percent of young people Kaspersky polled said they use a connected device because their friends do and one-third of kids (32 percent) keep in touch with their friends more often online than offline. The importance attributed to online friendships is as much as real world friendships for many children. Over two-fifths of kids

verts into a more livable life for our people. This is how change should be charted from hereon,” Dominguez reiterated. This pertained, for the most part, to the penchant of the economic planners under President Aquino to dwell, for instance, on inflation having slowed to only 1.6 percent at present from 3.8 percent in the year the outgoing Chief Executive first took the helm of the government. Interest rates on all maturities have also since scaled back from 4.034 percent at the time, compared to only 1.698 percent at present. Low and stable inflation indicates a degree of stability of prices that allow businesses and households to plan big-ticket purchases and expansion programs with greater certainty, while reasonably low-interest rates effectively encourage greater use of credit that help push the economy forward. Dominguez urged leaders of the business community to be part of the “coalition for change,” essentially an out-of-the-box public-private partnership seen to prolong the country’s economic growth.

PPP: Infra program or fiscal measure?

PARENTS INDUCE KIDS TO USE SMARTPHONES E2

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| Tuesday, June 21, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph

VICTORY FOR LOPEZ D

Just like in its previous games, France failed to turn possession into goals. “Everyone hopes we play better, the players do and so do I,” Deschamps said. “I’m not blind; I know we can do better.” Even with a new ball to strike, France’s shots lacked conviction, and Griezmann held his head in his hands when he placed his strike too close to Sommer after swapping passes with striker Andre-Pierre Gignac and bursting into the area. Pogba also went close twice early in the first half, drawing smart saves from Sommer. “Paul really was the driving force during the first half,” Deschamps said. “He was the heart and soul.” The Swiss threatened mainly on the break, using the 19-year-old Embolo’s pace, but France looked more likely to score as Payet shot just wide from outside the penalty area late on. In the other Group A match, Albania beat Romania, 1-0, and finished in third place with three points. Thanks to Pogba, it seemed like France’s midfield dominance might make the difference in the first half, but good situations were wasted. France’s main threat after the break was Sissoko, who made another powerful run and then fed the ball to Gignac, whose 53rdminute shot was easily saved by Sommer. He had also scuffed a first-half chance after Griezmann had set him up. French fans chanted for Payet. But having scored an 89th-minute winner against Romania in a 2-1 win and an injurytime strike in the 2-0 win against Albania, he could not repeat it this time. AP

AVOS, Switzerland—Claiming a career-best title, 22-year-old Miguel Angel Lopez won the nine-day Tour of Switzerland on Sunday by placing fourth in a shortened final stage. Lopez got the same time as his fellow Colombian, Jarlinson Pantano, who won a 57-kilometer stage to the Alpine resort of Davos that avoided a mountain pass due to severe weather.

The US Golf Association wound up giving Dustin Johnson the penalty shot after it was over, so he closed with a one-under 69 for a threeshot victory over Shane Lowry, Scott Piercy and Jim Furyk, a runnerup at Oakmont for the second straight US Open.

NOT THIS TIME!

By Doug Ferguson The Associated Press

SWISS fans pose on the stands before the Euro 2016 Group A match between Switzerland and France at the Pierre Mauroy Stadium in Villeneuve d’Ascq, Lille, on Sunday. AP

DUSTIN JOHNSON shows the mettle—and yes, the wits—to finally win a major championship. AP

Pantano, riding for Swiss team IAM Cycling, out-sprinted Sergei Chernetckii of Russia and third-placed Jon Izaguirre of Spain. Lopez was the first Colombian rider to win the Swiss race, 12 seconds overall ahead of Izagirre and 18 clear of Frenchman Warren Barguil in third. Earlier in the race, Lopez was named alongside Nairo Quintana, the two-time Tour de France runner-up, in Colombia’s team for the Rio de Janeiro Olympic road race in August. AP

AKMONT, Pennsylvania—Dustin Johnson had everything going his way on Sunday in the US Open. He was playing the best golf on the toughest course. He had a two-shot lead on the back nine at Oakmont. He even got a huge break on a ruling that allowed him to escape deep rough, the kind of breaks that usually go to major champions. That’s when he saw two US Golf Association (USGA) officials approach him on the 12th tee. They told him he might get a one-shot penalty for his ball moving on the fifth green. They wouldn’t know until after his round. Try playing the back nine of a US Open with that kind of confusion. “It’s nothing new at this point,” said Johnson, who has had major mishaps for the last six years. “It’s happened so many times I kind of expect it now.” The difference was the outcome. Johnson showed the mettle—and yes, the wits—to finally win a major championship. “For it to not affect the outcome is fantastic,” he said. “It just shows how well I played.” No one knew if he was leading, tied or one shot behind, and neither did Johnson. He didn’t look at a board the rest of the day, taking on each shot regardless of the score and coming up with all the right shots—the 10-foot par save on the 16th, a cautious bunker shot on the 17th, and a 6-iron that settled the score. It dropped down 5 feet from the hole for a birdie that wrapped up a US Open that was overdue. The USGA wound up giving him the penalty shot after it was over, so Johnson closed with a one-under 69 for a three-shot victory over Shane Lowry, Scott Piercy and Jim Furyk, a runner-up at Oakmont for the second straight US Open. “I still didn’t want the penalty. I didn’t think that I did anything to cause the ball to move,” Johnson said. “But at the end of the day, it didn’t affect what happened. So it doesn’t bother me at all.” Finally, he’s a major champion. Johnson scooped up 18-month son Tatum into his arms on Father’s Day and raised the silver trophy for all to see. “I’ve been here a bunch of times and haven’t quite got it done,” Johnson said. “But today, I did. And it feels really good.” He saluted a Pittsburgh crowd that was on his

side even amid all the uncertainty. The grandstands were raucous, with one fan shouting, “What’s the call, USGA?” At the trophy presentation, when Fox Sports announcer Joe Buck brought up the penalty situation, the crowd booed. Johnson finished at four-under 276, the lowest winning score in nine US Opens at Oakmont. The lingering question was whether the toughest test in golf was tougher than it needed to be. Johnson had a short par putt on the fifth hole, took a few practice strokes and as he placed the putter behind the ball, it moved slightly—backward. Johnson stepped back and called over the rules official, told him he didn’t cause it to move. He tapped in for par. Jeff Hall, senior director of rules and open championships for the USGA, said a staff member said on the radio that it might be worth another look. The USGA thought Johnson should know that his score might be one shot worse than it was, so it told him on the 12th tee. “After looking at video, the actions he took could have caused the ball to move,” Hall said. “We asked if there was some other reason the ball could have moved. He didn’t state a reason.” But it led to confusion over the entire back nine—for Johnson and for the guys trying to catch him. Lowry, who began the final round with a four-shot lead that he lost on the front nine, tied him when Johnson made bogey on the 14th. Were they tied? Was Johnson trailing by one? Jack Nicklaus, who won the first of his 18 majors at Oakmont in 1962, said if the USGA thought it might be a one-shot penalty, it should have done it right there and “let him get on with the job.” That’s what he did, scrambling for pars, keeping his cool, thinking only the major that kept eluding him. Johnson said he couldn’t help but wonder if he was in for more bad luck at a major that he was poised to win. “Just one more thing to add to the list, right?” he said. The most painful was last year in the US Open at Chambers Bay, when Johnson had a 12-foot eagle putt to win and three-putted for par to lose by one to Jordan Spieth. There also was that two-shot penalty at Whistling Straits that kept him out of a playoff in the 2010 PGA Championship, when Johnson grounded his club in sand without realizing it was a bunker. He was chasing down Darren Clarke in the 2011 British Open when he hit a 2-iron out-of-bounds on the 14th hole. He lost a three-shot lead at Pebble Beach in the 2010 US Open by closing with an 82. Not this time. Lowry became the first player since Payne Stewart at Olympic Club in 1998 to lose a four-shot lead in the final round of the US Open. He made birdie after being told of the potential Johnson penalty, but the Irishman lost his putting touch with three-putt bogeys on three straight holes. He closed with a 76. Lowry and all the other players on the course were informed that Johnson might get penalized after his round. “It didn’t affect the way I played,” Lowry said. “If anything, I credit Dustin for playing the way he played on the way in, having that hanging over him, because I probably would have wanted to know straightaway if it was me.”

Sports

By Dennis D. Estopace @DennisEstopace

Second of three parts

Commission on Higher Education (CHEd) report in July last year said the K to 12 Program has been long in coming. Before the war of imperialist countries in the 1940s, Filipinos

PESO exchange rates n US 46.4180

studied until Grade 7 and four years of high school before going to college. From 1945 and until last year, elementary education took only six years. For threefourths of a century, beginning at the Commonwealth era, it took only a decade before a student goes to college. After the full K to 12 program implementation, this year onward,

a student must hurdle four years of junior high school and two years of senior high school (SHS) before he or she goes to college. According to the CHEd, the K to 12 Program would “provide sufficient time for mastery of concepts and skills.” The CHEd report provided to the BusinessMirror explained the

Manuel Manny B. B. Villar Villar

n 2014 the national government posted a budget deficit of P73.1 billion, less than half the P164-billion deficit incurred in 2013. The reason: revenues grew faster than expenditures. In December 2014 alone, the Department of Finance said the deficit dropped by 12 percent to P46.3 billion, from P52.6 billion in 2013, because revenues increased by nearly twice the pace of spending. Continued on A10

Continued on A2

n japan 0.4436 n UK 67.1993 n HK 5.9817 n CHINA 7.0437 n singapore 34.4910 n australia 34.4886 n EU 52.6148 n SAUDI arabia 12.3778

Source: BSP (17 June 2016 )

A2 Tuesday, June 21, 2016

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K to 12

Whither Philippine education? Continued from A1

additional two years of SHS decongests the curriculum and focuses on mastery, while minimizing need to review basic subjects in college.” According to the CHEd, SHS students, or those in Grades 11 and 12, will be offered four major tracks: Academic, Sports, Arts and Design, and Technical-Vocational and Livelihood. The Academic Track includes the following: General Academic Strand; Humanities and Social Science; Accountancy, Business and Management; and, Science, Technology, Engineering and Mathematics. According to Luis Alberto A. Anastacio, president and CEO of work force solutions provider Servicio Filipino Inc., these tracks are not enough.

Well-rounded

ACCORDING to Anastacio, there’s some myopia in how the Philippines view education. For him, the education system should be viewed on the future needs of the economy. “What’s the global economy gonna look by 2020?” Anastacio told the BusinessMirror. “That’s the way that I’m gonna break it [education system] down; to look at it from the global, Asean, Asian and prespective and then break it down to let say the Philippine economic output and then, perhaps, going down to the actual region or even the province.” Anastacio said the reforms in the education system should have been viewed based on evidence. We should be able to determine future trends and learn from studies, like by the World Bank and the International Monetary Fund, he explained.

By doing so, Anastacio said education officials can determine the top industries or the key employment and economic generators. “And then [we need to identify] the talent requirements because each industry has a need for talent.” The problem, Anastacio said, is when officials could not forecast the future of an industry. “When you don’t know that, the schools won’t even know what kind of people to produce, what to teach, what skills to provide,” he explained. “Thus, there is this miscommunication between industry and education sectors. There’s finger-pointing that’s happening ever since.”

Future perfect

ANASTACIO, whose company searches for talents, said the interest of the education and industry sectors should be bridged. Such is a tall order as he said the issues are more than supply and demand. However, owners of the schools have said employability is not their responsibility, according to him. “Basta binigyan kita ng knowledge tapos binigyan kita ng diploma. E kung magtratrabaho itong mga batang ’yun, sa kanila [industry] na ’yan.” But A nastacio pointed to Japan’s shūkatsu program, which is a job-hunting system coordinated by companies and universities. He explained the job-hunting season in Japan starts for students in their third year of college life. Anastacio said based on his experience, the shūkatsu is “really big to support the entire university.” “Lahat kami required to talk to the career counselor and guidance counselor to tell them which companies ang pupuntahan

Audelyn Saliksik, a senior high-school student of Parañaque National High School Main, gets instructions from her professor, Johnmar Capili, on how to use an electrical tester. She is one of the 44 students currently taking up vocational classes under the Department of Education’s K to 12 Program. NONIE REYES

namin for interview, etc.” He explained the number of students hired by a company lends credibility to the university. “The brand of the school is how good your students are because even before they graduate, the top companies are getting you.” Anastacio said implementing such system requires a study of the industry needs in the future and the curriculum that would help build the talents required by the industry in that future. “But are the schools willing to fund it? Should the government now fund it?” he asked. “But if we are to champion something,

I’d like to convince [schools] they should have a mission [to make their students] employable.” Anastacio said schools should have a notion that the institution’s brand is to make the student employable.

Employability ills

ACCORDING to the CHEd report last year, the K to 12 Program will impact college programs, as some courses were moved to the SHS level. This move has led to revisions in the General Education (GE) curriculum and in policies, standards and guidelines of college programs. The GE Curriculum courses have been reduced to 36 units, composed of

24 units under the GE Core, nine units of Electives and three units of Life of Rizal. There are eight subjects under the GE Core, three under Electives and one subject under the Life of Rizal. Anastacio said the curriculum should follow the “outcome-based” principle laid out in the K to 12 Program. “Ang tinuturo kasi sa school academics, body of knowledge so, for example, kung ako management, tinuro sa akin puro management concepts, pero hindi sa akin inexplain d’un sa course ng management, principles of accounting. Tinuturuan ka ng applied math, critical thinking, logic and other skills,” he said. “’Yung mga bata hindi knowledgeable doon sa mga skills na ’yon na kailangan pala ng industriya.” Anastacio explained it seems industry only assumed the country’s work force already have these skills they require. “But these were never measured” because before K to 12 it was not outcome-based. Anastacio explained the outcome is measured based on the global skills requirement. “Before it was only about giving a diploma; today kailangan ’yung diploma na ’yun equates to you having these skills and competencies, this body of knowledge, hindi lang knowledge,” he said. “So engineer ka nga, pero magaling ka ba mag-plano? Magaling ka ba mag-communicate? Hahanapin ’yan [ng mga employers].” Another problem that Anastacio sees in the K to 12 Program involves teachers. “Bihira ang teacher natin na meron talagang experience doon sa industry na ginagalawan n’ya,” he said, citing as example architecture. “In industrialized countries, the best minds are taught by people who really had experience of going to work.” To be continued

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Tuesday, June 21, 2016

New DTI chief to retain CARS Program

By Catherine N. Pillas

c_pillas29

he Department of Trade and Industry (DTI) will continue to implement the P27-billion stimulus program for local car makers under the Duterte administration, according to its next chief. I ncom i ng Trade Sec ret a r y Ramon Lopez has assured car makers that he has no plans of scrapping the Comprehensive Automotive Resurgence Strategy (CARS) Program. “We will continue the implementation of the CARS Program under the new government and ensure that its goals are effectively realized by working together closely with auto parts makers and assemblers,” Lopez

told the BusinessMirror. “We will also pursue strong coordination among government representatives of the interagency committee of the CARS Program,” he added. Lopez made the pronouncement after Toyota Motor Philippines Cor p. (TMPC) and Mitsubishi Motor Philippines Corp. (MMPC) appealed to the new administration to assure the continuit y of the P27-billion

stimu lus prog ram. “ The program has already been settled and if there will be changes, that is something that the new ad ministrat ion shou ld t hin k about, because it will involve the local companies and, of course, our principals,” MMPC First Vice President Froilan Dytianquin said earlier. “The Mitsubishi president has already brought in the Japanese suppliers. The program should be honored, we don’t want a government that will cut off policies, it should be a continuing policy throughout,” Dytianquin added. For his part, TMPC First Vice President Rommel Gutierrez expressed hope that the new administration would support the implementation of the program. “We hope the new administration would honor and give more support to CARS. Our hope is that the program will be implemented as planned,” Gutierrez said earlier.

MMPC is investing P4.3 billion to qua lif y for perks under C A R S. Of the amount, P2 billion w il l be spent for a stamping /press plant that recent ly broke ground. The production of pressed metal parts is required under the program to bump up a vehicle’s local content, according to Trade Undersecretar y Ceferino S. Rodolfo. Participating car makers are required to loca lize the production of body shell and large plastic parts and components. Currently, large body parts and components are imported. Based on their application, MMPC is eyeing to produce 200,000 units of the Mirage and Mirage G4. MMPC President Yoshia ko K ato said the company ex pects their direct work force to double from the cur rent 950 employees to 1,832 by the time the program ends. The figure excludes the significant boost in employment to be

generated by their partner parts makers. Parts making under the CARS Program are expected to generate P18 billion in fresh investments for the country. As for TMPC, the company is expected to invest P4 billion to produce 230,000 units of the A ll-New Vios. The C ARS program is a government stimulus program aimed at reviving the countr y’s declining manufacturing sector by specifically targeting the auto industr y, given

its strong linkages to other industries and its so-called multiplier effect. The program provides for a government support fund of P27 billion, or a budget of P9 billion for each enrolled vehicle model. The incentives will be given in the form of taxpayment certificates to offset any tax and duty obligations of CARS participants to the national government, which include excise tax, income tax, import duties and value-added tax.

We will continue the implementation of the CARS Program under the new government and ensure that its goals are effectively realized by working together closely with auto parts makers and assemblers.”—Lopez

PHL needs fast Internet to fuel economic growth By Mia Mallari @MiaRosienna

he country’s top financial executives are banking on the incoming administration’s support to modernize the Philippine telecommunications infrastructure to fuel economic growth. George S. Chua, Finex president, told the BusinessMirror on the sidelines of the group’s general membership meeting that advanced telecom infrastructure remains a vital part of growth, not only for the country’s economy but for its financial institutions, as well. “Actually, the impact [of infrastructure upgrade] is, of course, on businesses, because if there’s no connectivity, you cannot have efficient point-of-sale services for companies, and you cannot have good ATM connections and things like that,” he said. The digitization of monetary transactions requires better Internet connection, especially for the booming online businesses. Telecommunication companies, like Smart and Globe, are beginning to address the country’s connectivity challenges and are doing their part to improve telecommunication infrastructure that will support stronger broadband connections. “The creation of the Internet superhighway is mostly private sector-led. There is no government support in terms of building the infrastructure that we need for fast Internet. More than that, we know that we have no national broadband network, unlike Singapore or Malaysia that can show they are in the top echelon when it comes to Internet speed,” said Yolanda C. Crisanto, SVP of Corporate Communications for Globe Telecom Inc. In her presentation, Crisanto explained that a huge factor of the connectivity challenge facing the country is its geography. An archipelago composed of 7,107 islands, the Philippines needs to adopt a different means or approach to efficient connections through terrestrial, aerial and

underwater cables. “These are all the things that we need to connect all the islands in the country, and submarinal cables are not cheap,” she said. Ramon R. Isberto, head of Public Affairs for Smart Communications Inc., said countries like Singapore and South Korea have more solid broadband connections because of their inherent advantage as landmass countries in Asia. “We need better actors, better policies to garner infrastructure that will support communication,” he added. Isberto said telecommunication companies should reinforce substantial fiber cables across the country for optimum connection. “A centralized system or a standard procedure that will ease the tedious process of setting up cellular sites in different local government units is, likewise, needed,” he added. “Currently, 35 permits are needed before we can build a cell cite. Imagine the time and the cost the process brings,” he said. Over 90 percent of Internet content come from overseas, with a huge bulk coming in from America because of social-networking sites. Ironically, 80 percentto 90 percent of Filipinos are still using old access modes, 3G phones, which affect the growth of smartphone adoption. Out of the country’s smartphone users, only 10 percent to 20 percent are running on 4G connections, the fastest available in the market. Isberto said handset manufacturers should produce more affordable lines of smartphones that run on 4G, which provides faster connection and downloads. He added that, however, affordable the data plan price is for the Philippines compared to other countries, it is fitting that the country must step up its Internet capacity to support the growing business-process outsourcing sector. Regardless of the infrastructure challenges the country has to hurdle, Chua remains bullish on the performance this year of the country’s financial institutions.

A centralized system or a standard procedure that will ease the tedious process of setting up cellular sites in different local government units is needed.” —Isberto

IMPRESSIVE Bosch Philippines on Monday reported a 35-percent growth in 2015 sales

to $50 million during a news conference attended by (from left) Rowena Bonifacio, Security Systems Country manager of Bosch; Andrew Powell, managing director of Bosch Philippines; and Erick Velasquez, Automotive Aftermarket officer of Bosch Philippines. NONIE REYES

Villar’s graveyard company first to test market in Duterte admin T

he first Philippine company to test the share market since the presidential victory of Rodrigo R. Duterte runs cemeteries. Golden Haven Memorial Park Inc., which says on its web site that it aspires to be the leader in professional death care, started marketing P778 million ($17 million) of shares on Thursday in an offer that runs through June 22. It’s controlled by Manuel Villar, a former senator who is a political ally of Duterte. Mark Villar, Manuel’s son, is the incoming public works and highways secretary. With six themed memorial parks throughout the Philippines, Golden Haven will test demand in a market that’s climbed 9 percent since the May 9 election amid optimism Duterte can boost economic growth. It will be the first initial public offering (IPO) of a cemetery company since 1991 in a country where underwriters are reluctant to take them to market due to beliefs surrounding death that are prevalent among the Chinese-Filipino business elite. “Nobody wants to get into it because it’s about the dead,” said Jomar Lacson, deputy head of research at BPI Securities Corp. in Manila. “But it’s a service that somebody has to perform and people are willing to pay for it,” he said, adding that he expected

₧778M The value of shares being marketed by Golden Haven Memorial Park

there would be sufficient demand for the shares. The company is offering 74.1 mi l l ion new shares at P10.5 apiece, amounting to a 15-percent stake, through Asian Alliance Investment Corp., the sole underwriter. It will use the proceeds to fund land acquisition and expansion of existing cemeteries, columbarium facilities and funeral homes, it says in the sale prospectus. Golden Haven is targeting a listing on June 29, a day before Duterte takes office. The offering is “way oversubscribed,” said Jose Antonio Lichauco, president of Asian Alliance Investment, declining to give further details before completion of the sale.

IPO timing

The timing of the IPO has nothing to do with Duterte’s election win, said Roy Joseph Fernandez, Golden Haven’s chief financial officer. “We’ve been planning this for

a long time,” he said. “There’s no relation at all with the elections. Demand is strong because the issue size is small and the market is doing really well.” Villar controls Golden Haven through Fine Properties Inc., a holding and investment company that’s also the majority shareholder of Vista Land & Lifescapes Inc., a residential property developer. Vista’s share price has risen 14 percent since Duterte’s election win. Villar’s alliance with Duterte “is viewed positively by some investors,” said James Lago, head of research at PCCI Securities Brokers Corp. in Manila. A spokesman for Manuel Villar said he was out of the country and couldn’t be contacted. Duterte gained international notoriety during the presidential campaign with foul-mouthed rants and threats to kill criminals. Since his win, he’s impressed investors, with economists from Goldman Sachs Group Inc. saying last week his mandate of boosting infrastructure spending, cutting red tape and investing more in farming could lift the country’s potential growth rate. Strong demand for Golden Haven’s IPO could bode well for companies, such as Cemex Holdings Philippines Inc. and Pilipinas Shell Petroleum Corp., that are also looking to raise capital

this year. “In the first half of the year, issuers and investors said let’s wait for the elections,” said Eduardo Francisco, president of BDO Capital & Investment Corp., a unit of the Philippines’s biggest lender. “After they saw the results, they’re saying, OK let’s proceed.”

‘Steady business’

Under President Aquino, the Philippines enjoyed the fastest growth in Asia apart from China, leading to a swelling middle class that can afford plots at cemeteries, like those run by Golden Haven. Demand will be supported as the proportion of Filipinos over 60 will rise from 7.3 percent in 2015 to 14 percent in 2050, United Nations population projections show. Golden Haven’s revenue increased 16.5 percent to P692.8 million last year and net income rose 4.5 percent to P151.1 million, according to its prospectus. Based on those numbers, the offer price is about 34 times its earnings per share, said Lexter Azurin, head of research at Unicapital Securities Inc. in Manila. That compares with a price to earnings ratio of 18.6 for the Philippines benchmark index. “Death is a steady business,” Azurin said. “A lot of people are dying every day.” Bloomberg News

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Mariano outlines agrarian-reform priorities

By Jonathan L. Mayuga

@jonlmayuga

afael V. Mariano, the incoming secretary of the Department of Agrarian Reform (DAR), on Monday said he will coordinate with the judiciary for the immediate turnover or transfer of agrarian-related cases filed in various courts against farmers to the DAR. The move, he said, aims to boost the agrarian legal services (ALS) provided by the DAR to agrarianreform beneficiaries. Under Republic Act 6657, or the Comprehensive Agrarian Reform Law (CARL), the DAR is vested with the primary jurisdiction to determine and adjudicate reform matters, and to extend free legal assistance to farmer-beneficiaries affected by agrarian cases. ALS is complemented by two other programs, namely, agrarian legal assistance under the Bureau of Agrarian Legal Assistance and the adjudication of agrarian cases under the DAR’s Adjudication Board. Some agrarian-related cases, however, end up in trial-court braches and state prosecutors. Mariano said he wants to review these cases to determine if they are agrarian-related. As such, he said, the cases should be turned over or transferred to the DAR, which has jurisdiction over the cases. “Many of the cases filed against agrarian-reform beneficiaries are trumped-up charges. These cases should be referred to the DAR,” Mariano, who spoke in Tagalog, told the BusinessMirror in an interview. Agrarian cases, he said, are often “criminalized” by landowners to harass farmers. “If the cases filed against farmers are agrarian-related cases, these cases should be referred to the DAR,” he said. The process, Mariano said, is for state prosecutors or judicial court to refer the case to the DAR, which, in turn, will issue certification before taking cognizance of the case. A farmer-leader who once led the militant Kilusang Magbubukid ng Pilipinas, Mariano said many farmers who are fighting for lands under the Comprehensive Agrarian Reform Program (CARP) have been charged in court, and some have spent time or are still in jail for claiming their right to a piece of land promised under CARP. “I’ve heard of farmers being charged for qualified theft for harvesting coconuts or mangoes from a land they are occupying as ten-

ants. But, actually, the charges are fabricated to harass the farmers,” he lamented. Mariano said that, at the Cojuangco-owned Hacienda Luisita alone, a good number of farmers who are fighting for land distribution were slapped with trumped-up charges. In an earlier interview, Mariano recalled that one of the cases filed against a group of farmers was even initiated by the DAR when, in fact, the DAR should be the one mediating between the landowners and the farmers. He added that once he assumes the position as agrarian-reform secretary, he will closely coordinate with the judiciary, as well as the Department of Justice (DOJ), to help address the problem. Mariano added that he and his team had already received the transition report from the team of outgoing DAR chief Virgilio de los Reyes. “We are now looking into the report. There will be a few more meetings to discuss important matters before we officially take over,” he said. Mariano is expected to bring in his own team to the DAR when he officially assumes the position on July 1, but said he will leave to the discretion of incoming President Rodrigo R. Duterte to appoint an undersecretary and assistant secretary for the department. “We are looking at a smooth transition. Members of the transition team will not be automatically be appointed,” he said. The implementation of CARP, Mariano said, will be a priority for his team. An inventory of the agrarian reform’s land-transfer program or land acquisition and distribution from 1972 up to 2016, he said, will be conducted. “We want to know how many hectares have been distributed, how many landless farmers were awarded with lands, and how many of them have actually been able to pay amortization or completed payments,” he said. Mariano added that the review will cover an inventory of cases in-

Cemex plans to seek up to $526 million in IPO

emex Holdings Philippines Inc. plans to seek as much as P24.4 billion ($526 million) in what could become the country’s biggest initial public offering (IPO) in more than two years, people with knowledge of the matter said. The building material producer, a unit of the largest cement maker in the Americas, plans to offer 2.03 billion new shares at P10.50 to P12 apiece, the people said. Cornerstone investors have agreed to buy more than $100 million of shares in the IPO, according to the people, who asked not to be identified as the information is private. At the top end of the range, the Cemex IPO would be the largest IPO in the Philippines since supermarket operator Robinsons Retail Holdings Inc.’s $621-million share sale in October 2013, data compiled by Bloomberg show. More companies in the country may revive their plans for equity offerings after President-elect Rodrigo R. Duterte said current economic policies will continue, BDO Capital & Investment Corp. said last month.

Cornerstone investors in the Cemex Philippines IPO are mostly foreign institutions, the people said. The company plans to start taking investor orders on Tuesday, according to the people. Citigroup Inc., HSBC Holdings Plc. and JPMorgan Chase & Co. are managing the offering, together with domestic lead underwriter BDO Capital. Proceeds from the offering will be used to repay debt, according to a regulatory filing this month. Paul Vincent Arcenas, vice president for strategic planning at Cemex Philippines, didn’t reply to calls and mobile-phone messages seeking comment. IFR reported the price range earlier Monday in Manila, citing unidentified people. Cemex SAB, based in Monterrey, Mexico, said last year it may sell as much as $1.5 billion of asset as it seeks to restore an investmentgrade capital structure. The company agreed to sell $400 million of US properties in May, following a $53-million agreement to dispose of its Bangladesh and Thailand operations announced in March. Bloomberg News

A farmer and his family head home after a hard day’s work in the field. NONIE REYES

Many of the cases filed against agrarian-reform beneficiaries are trumped-up charges.”—Mariano volving land conversion, exemption and reversals rendered from the time agrarian reform was implemented. “I want to stop the reversals and the circumvention of the law. The existing agrarian-reform law has many loopholes that is why I am pushing for the enactment of a genuine agrarian-reform law that will distribute lands for free,” he said. Mariano added that he looks forward to productive discussions to clarify questions on matters concerning the DAR’s important divi-

sions or sectors, such as legal affairs, field operations, finance, planning and foreign-assisted projects. Mariano, likewise, said he will recommend to Duterte the reconvening of the Presidential Agrarian Reform Council (PARC) and the PARC Executive Committee. PARC is headed by the President of the Philippines as chairman, the DAR secretary as vice chairman and the secretaries of departments of Agriculture, Environment and Natural Resources, Budget and Manage-

ment, Interior and Local Government, Public Works and Highways, Trade, Finance and of Labor, and the National Economic and Development Authority, president of the Land Bank of the Philippines, administrator of the National Irrigation Administration, and three representatives of affected landowners to represent Luzon, the Visayas and Mindanao, six representatives of agrarian-reform beneficiaries with two each from Luzon, the Visayas and Mindanao, provided that one of them shall be from the cultural communities, as members. On the other hand, the executive committee of PARC is composed of the secretary of the DAR as chairman, and such other members as the President may designate.

The PARC and the DAR have the power to issue rules and regulations, whether substantive or procedural, to carry out the objects and purposes of CARL. “I really want to convene PARC to sit down and talk important matters. The outgoing administration, as far as I know, never convened PARC. This is important to tackle land conversions and other cases, such as cancellations, exemptions, or reversals,” Mariano said. Under his leadership in the DAR, Mariano said he will oppose the massive land conversion that is causing the country’s agricultural lands to shrink, thereby affecting the country’s food-production capacity. “Land conversion should really be stopped,” he said.

Philippines, Malaysia, Indonesia agree on trilateral maritime patrols By Rene Acosta @reneacostaBM

HE Philippines, Malaysia and Indonesia have initially agreed to conduct trilateral patrols in their common borders in order to address both maritime threats and crimes, including kidnapping and piracy. The conduct of trilateral patrols was agreed in principle during the meeting on Monday between Defense Secretary Voltaire T. Gazmin, Malaysian Defense Minister Dato’ Seri Hishammuddin Tun Hussein and their Indonesian counterpart Gen. Ryamizard Ryacudu. During their meeting in Manila hosted by Gazmin, the three defense

chiefs agreed to conduct trilateral air and maritime patrols within their borders and establish joint military command posts at “designated locations, including ad hoc military liaisons on board.” The initial agreement followed the meetings last month in Indonesia and during the recent Asean Defense Ministers Meeting in Lao People’s Democratic Republic, where they agreed to work together in addressing crimes in the waters within their borders. In their latest meeting, the three raised concerns over the recent spate of kidnappings and armed robbery at sea in the maritime areas of common concern, and reaffirmed the need, commitment and their collective

responsibility to address the threats. In order to get the air and maritime patrols moving, Gazmin and his counterparts agreed to set up a Trilateral Maritime Patrol Working Group, which would set the operational directions on the conduct of the trilateral maritime patrol. Maritime Command Centers, which have overall responsibility for the tasking and deployment of each country’s respective assets, would be established for the patrols. Gazmin said they have also agreed to identify a transit corridor within the borders of the three countries, which should serve as “designated sea lanes for mariners entering the maritime area of common concern.”

The trilateral patrols should usher information and intelligence sharing along with a database sharing mechanism, Gazmin said. The joint border patrols were earlier proposed by Indonesia, in the aftermath of the kidnapping of 14 Indonesian and Malaysian crewmen of a tugboat sailing in the waters between Tawi-tawi and Sabah. The kidnapped crewmen have since been released after ransom was reportedly paid to the Abu Sayyaf Group. The kidnapping followed the abduction of another set of Malaysian crewmen in Sabah, who were taken to Sulu, wherein they were freed after a ransom money was also paid to the kidnappers.

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Paddy fields are Najib’s battlefield to woo voters

tanding near paddy fields that stretched to the horizon, Malaysian Prime Minister Najib Razak had one message for voters of the rural district of Sungai Besar: My government will take care of you. Fairuzita Mohamad Amir, who was in the crowd Najib addressed earlier this month in the state of Selangor, voted on Saturday in a by-election that saw his United Malays National Organisation (Umno) crush the competition. The 51-yearold widow grows rice on 2.5 acres of land with the help of subsidies plus access to fertilizers and pesticides, for which she credits Umno. “I learned to say Umno along with my ABCs,” Fairuzita said. “Over the years, they have helped me a lot. I need their support and they have mine.” Najib needs to keep smallholders, like Fairuzita, happy as he seeks the votes of rural and semiurban areas to retain power in the next general election due by 2018. Farmers—many of them ethnic Malays—are a linchpin for his party, which leads one of the world’s longest-ruling coalitions. Their votes have a higher weighting than their work, which contributes to less than a tenth of gross domestic product.

Najib scandals

“Even as Malaysia becomes more developed, the importance of the farmers and the rural voters remains intact,” said Khor Yu Leng, an analyst who has published papers on Malaysia’s political economy, including voting trends in the 2013 election. “The concentration of seats in farming areas is quite big for Malaysia, and Umno will want to strengthen that.” At stake for Umno is the unbroken rule of its Barisan Nasional coalition since independence in 1957. The party is watching Najib’s

$47.5M The amount of monetary handouts pledged by Najib for rubber farmers this month ability to shake off a year of political turmoil and focus on bolstering a slowing economy. Umno’s victories with bigger majorities in Sungai Besar and a northern state on Saturday indicate Najib passed the first test of public support on peninsular Malaysia since the scandals broke. Cabinet ministers made daily trips to the districts before election day, shaking hands and, at times, handing out bags of rice to the poor. An opposition in disarray, which fielded multiple candidates in each seat, also assisted Umno. Malaysian farmers have been hit by falling commodity prices, rising living costs and a stock investment that hasn’t always delivered what was promised. Najib has responded by pledging bigger subsidies for rubber planters and rice farmers in the 2016 budget. He announced monetary handouts this month for rubber farmers totaling 194 million ringgit ($47.5 million).

Farmers, fishermen

Najib, 62, has battled graft accusations since July, and denies wrongdoing. He was cleared by the attorney

In this May 3, 2013, file photo, a Malaysian ethnic Chinese woman rides past a billboard of Malaysia’s ruling National Front coalition with a portrait of Prime Minister Najib Razak, which translates “I vote for National Front coalition,” ahead of the upcoming general elections in Klang, outside Kuala Lumpur. The party of Malaysia’s scandal-tainted prime minister has won two parliamentary by-elections in a landslide, further strengthening his rule despite corruption allegations. AP

general this year over revelations that $681 million appeared in his accounts before the last election in 2013. The money was a donation from the Saudi royal family and most was later returned, the government said. The premier has also been embroiled in probes into the finances of troubled state fund 1Malaysia Development Bhd (1MDB), while former leader Mahathir Mohamad and opposition groups sought to whip up anger over a goods and services tax that was imposed in 2015. “Farmers and fishermen are from the mainstream Malay heartlands and those heartlands are key to Barisan Nasional regardless of any issue, whether it’s about GST or 1MDB,” said Ahmad Martadha Mohamed, dean of the college of law, government and international studies at

Universiti Utara Malaysia. “If the prime minister continues to provide support to these groups, they will continue to support him in the future.”

Electoral map

The importance of rural voters can be seen in Malaysia’s electoral map. Settlers under Malaysia’s Federal Land Development Authority—a government agency known as Felda formed in 1956 with World Bank funding to help steer the rural poor out of poverty by providing them with land to plant—are backbone voters in over 50 districts, according to the Merdeka Center for Opinion Research. In the last general election, there were 125 rural seats and 54 semiurban ones, of a total of 222, Khor said. “State assistance touches every

aspect of their lives—an education grant for their children, an entrepreneurial grant, a house, or do they want to choose to go on their own,” Khor said of smallholder farmers, who number more than 600,000. “It might appear illogical to vote for the opposition because what if you get punished?”

‘All because’

Still, some farmers have expressed unhappiness over a decline in the value of their shares in Felda, while others have criticized management’s investment decisions. Shares in Felda Global Ventures Holdings Bhd. have fallen 67 percent since its listing in 2012. “They make investment decisions without thinking them through and we are the ones paying a price,” said Saifuddin, a Felda settler who would

give only a partial name. “I understand there’s nothing they can do about the price of palm oil because that’s world prices. But that doesn’t explain enough why the shares are doing badly.” Najib in March asked second- and third-generation settlers to continue backing the government, saying he wants the group to be a “political powerhouse” and without that influence, Felda could cease to exist. The Felda leadership has backed Umno’s claims of its role in helping settlers out of poverty. “No one thinks about the Malays except Umno, we must remember that,” Felda Global Chairman Mohd Isa Abdul Samad said last month. “Our successes are not because of our own cleverness. Many Malays forget. It’s all because of Umno.” At the next election, Najib will probably further target the bottom 40 percent of the population who can swing votes in tight races. Isman Abdul Karim, who grows palm oil on a 5-acre plot of land near Sungai Besar, won a manual oil palm roll picker at an event organized by the Ministry of Plantation Industries and Commodities in the days before the by-election. Other prizes included bags of fertilizer and a motorized palm oil fruit cutter. The father of nine settled on the land in the early 1960s, and says his life has improved over the years. One child received a government scholarship to study in the US and is now a computer engineer. Independent smallholders like him make up about 13 percent of palm oil planters, according to the Economic Planning Unit. “I’ve been an Umno supporter from way back,” the 78-year-old said, resting in a shed at his plantation. He works the land alone though gets help to pick oil palm fruits. “We used to get a lot of support for the land, but now not so much. But there is no other party but Umno for me.” Bloomberg News

Thailand’s winning mix: Cheap Vietnam stocks to rebound on investor confidence oil, Leicester City and tourism V

hen it comes to hefty trade surpluses, the likes of China, Japan, Germany and South Korea make the list of usual suspects. But without much fanfare, Thailand—best known for its beaches, food, military coups and, more recent, the football heroes Leicester City—has run up the biggest currentaccount surplus among major emerging markets. T h e c u r r e nt - a c c o u nt surplus in the first quarter ballooned to an annualized 10.2 percent of GDP, an improvement that Richard Iley, chief economist for Asia at BNP Paribas, describes as “phenomenal.” Much of the buffer is down to a steep fall in oil prices— Thailand relies on crude imports for more than 80 percent of its energy needs—and a surge in tourism fueled by Chinese shoppers. The nation attracted 7.9 million visitors from China last year, a 70-percent increase from 2014. Thailand has been using the windfall to replenish its foreign-exchange reserves by about $20 billion this year, providing a key bulwark if it faces a sudden surge in capital outflows or foreign-exchange market volatility. The increase in reserves has been the fastest of any other emerging market, according to BNP. “This is not only one of the largest short-run spikes in Thailand’s reserves in the last

Buddhist monks receive offerings from devotees outside Grand Palace during the 70th anniversary celebrations of Thai King Bhumibol Adulyadej’s accession to the throne in Bangkok. King Bhumibol is the world’s longest-reigning monarch. AP

20 years but, like the current account itself, leaves Thailand an outlier in the broader emerging market universe.” It’s not all good news though. The current-account data also reflects a reluctance by companies and households to spend the dividend from cheaper energy, indicating a deeper malaise in the economy. Thailand remains under military rule two years after a coup and political uncertainty has eroded confidence. Qu ic kTa ke T h a i l a nd ’s Troubled Democracy Savings rates soared to 33 percent of GDP in the first quarter, while investment has slid, according to BNP. “ This unsavor y pincer

7.9M

The number of Chinese visitors attracted by Thailand last year

movement is a private-sector phenomenon with depressed animal spirits leaving corporations unwilling to expand investment and households to increase spending, despite the boost to real incomes produced by lower commodity prices,” Iley said. Bloomberg News

ietnamese shares may bounce back this week, as exchange traded funds (ETFs) completed reviewing their investment portfolios, and oil prices had a strong recovery on Friday, to bolster investor confidence. The benchmark VN Index on the HCM Stock Exchange fell 0.9 percent on Friday, to finish the week at 619.25 points. The southern market index closed down 1.7 percent from the previous week. Further, the HNX Index on the Hà Nôi Stock Exchange edged down 0.3 percent to end Friday at 83.92 points. The northern market index lost 1.1 percent during the past five trading days. “The ETFs have finished reviewing their second-quarter investment portfolios, and that may help improve investor confidence this week,” said Đào Hõng Duong, PetroVietnam Securities Inc. head of Investment Division. Investors may find opportunities to purchase stocks that declined strongly during the ETFs’ review of the second quarter, BIDV Securities Corp. wrote in a report. Last week investors on global stock markets were cautious ahead of the US central bank’s meeting, on expectations that the US central bank would keep interest rates unchanged and signal fewer rate increases this year. While the US central bank’s decision had little impact on Vietnam’s stock markets, it was the ETFs, with their review of second-quarter investment plans, that weighed on investor confidence in Vietnamese stocks. Foreign investors last week recorded total net sales of 571.5 billion Vietnamese Dong ($25.4 million), which was a large drawback, compared to a total net buying of 408.8 billion Vietnamese Dong in the previous week, as ETFs sold and removed some local stocks from their investment portfolios. Almost all stocks that were removed and sold by the ETFs declined. Property and retail firm Vingroup JSC (VIC) slumped 3.7 percent during the week, HHS

lost 4 percent and Sài Gòn Securities Inc. (SSI) declined 6.8 percent. ETFs also bought some local stocks, such as consumer goods producer Masan Group (MSN), GTN Foods JSC and IB Securities JSC (VIX). MSN rose 1.4 percent last week, GTN surged 16 per cent and VIX jumped 4.2 percent. Additionally, a strong rebound in oil prices may help bolster investor confidence, Duong said, the analyst from PetroVietnam Securities Inc. Global crude prices recovered strongly on Friday to end a six-day decrease, as the US dollar weakened on global exchanges. US crude West Texas Intermediate jumped 3.8 percent and London-traded Brent crude jumped 3.8 percent and 4.2 percent to close at nearly $48 and $49 per barrel, respectively, after falling some 11 percent during the previous six days. Local energy stocks may benefit from that strong rebound, especially large-cap stocks, such as PetroVietnam Gas Corp (GAS), PetroVietnam Drilling and Well Service Corp (PVD), PetroVietnam Technical Service Corp (PVS) and PetroVietnam Coating Corp (PVB). GAS was down 1.7 percent during the past five days, PVD lost nearly 12 percent, PVS slumped 9.1 percent and PVB declined 6 percent. Investors last week exchanged nearly 173 million shares each session, worth 2.8 trillion Vietnamese Dong. These figures were down 7.2 percent and 8.2 percent from those made in the previous week. Meanwhile, the Ministry of Industry and Trade (MOIT) and the United Nations Industrial Development Organization (Unido) have launched a project to support the Vietnamese government in building industrial strategies. The project aims to improve the quality of industrial-development strategies and policies to increase the local industry’s competitiveness, thus, contributing to reducing poverty and improving gender equality by generating new production activities and jobs.

The three-year project, with a total investment of nearly $1.1 million, includes $980,000 from the South Korea’s Official Development Fund (ODA) through Unido, and a corresponding fund of $100,000 will be covered by Vietnam . Speaking at the launch ceremony, the head of the International Cooperation Department under the MOIT, Lê Huu Phúc, said the ministry pledged to do its utmost to support the work, adding that Vietnam would see its industry sector grow, thanks to the project. Vietnam enjoyed high-industrial growth, but added values and technology application rates remained low, he said, noting that reasonable and feasible policies would be crucial for the country to develop its industrial sector with higher added values and competiveness. South Korean Consul General to Vietnam Park Sang-shik said his country would share its experience in technological development with Vietnam and provide full support for the Southeast Asian country to implement the project.

Industrial development report

ON the same day, Unido released the Industrial Development Report 2016, which focuses on the role of technology and innovation in sustainable industrial development. The report highlights the urgent need for international cooperation to boost technological changes and attain inclusive and sustainable industrial development. It underlines the role of technology and innovation in industrialization and modernization and affirms the inevitability of industrialization during development. Additionally, technology is able to foster all three aspects of sustainable development: economy, society and environment. However, the technological application in developing the economy and solving social problems in Vietnam is still limited, participants at the launch said. PNA

The W

Business

A6 Tuesday, June 21, 2016 • Editor: Lyn Resurreccion

Japan exports declined for 8th month in May J

New-home prices climbed in 60 cities in May, down from 65 in April, among the 70 tracked. Bloomberg News

China’s housing market in flux

he recovery in China’s housing market that helped underpin the economy in the first half is showing signs of tapering off.

New-home prices, excluding government-subsidized housing, climbed in 60 cities in May, down from 65 in April, among the 70 tracked, the National Bureau of Statistics said on Saturday. With less of a boost from a recovering property market likely in the second half, the government will need to find other drivers, such as infrastructure investment, to meet its growth goal of at least 6.5 percent this year, according to Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. “ The housing market is in f lux,” Shen said. “ The government is likely to step up policies to encourage home-buying in places where demand is weak and inventories of unsold housing are still high, as the destocking policy didn’t yield the expected results.” Faced with a massive pile of unsold homes in smaller cities, the government and central bank since late 2014 had unleashed a range of measures aimed at improving demand for homes to clear the overhang. While inventory levels may

6.5%

The amount of tax paid by London in 2015

not have budged much, mortgage demand has, rising to a record last month, according to the latest data from the central bank. Still, the recovery in home prices last month abated, as local governments put curbs in top economic centers, like Shanghai and Shenzhen, where prices have been surging, while they deployed home-buying stimulus in smaller cities to clear the glut of unsold residences. “This market rebound since last May has been fueled by credit and easing measures, making it unsustainable in some regions,” said Xia Dan, a Shanghai-based analyst at Bank of Communications Co. “Now the recovery is almost hitting the ceiling.”

Growth abates

Out of 60 cities with price gains last month, 36 had slower increases than in April, leading overall growth to “abate,” according to the statistics bureau. The average new-home price rose 0.84 percent in May from April, down from 1.03 percent in the previous month and slowing for the first time since October, according to Bloomberg calculations based on government data. Price gains slowed in some of the largest cities, indicating tightening measures have started to take effect. Values rose 2.3 percent in Shanghai, a slower pace than in April, while Shenzhen saw a gain of 0.5 percent, down from 2.3 percent the previous month. The two cities, where residential-price gains topped the nation earlier this year, tightened buying criteria for nonresident homebuyers, raised down-payment requirements for some second homes and banned unregulated lending. Housing policy will show more divergence in the second half, according to Niu Li, economist at the State Information Center affiliated to the National Development and Reform Commission. “The question in big cities for officials will be how to curb prices, while in some of the smaller places prices are too high for inventory to come down,” he said. The port city of Xiamen in the

southern province of Fujian led gains in May, with prices climbing 5.5 percent from April and 28.3 percent from a year earlier. Hefei, the capital of the eastern province of Anhui, saw a gain of 5.1 percent from the prior month and 23.3 percent from a year earlier.

Second tier

While stoking sales in smaller cities to reduce an oversupply, polic y-makers are a lso being vigilant about the threat of financial instability in the housing market, an unwelcome risk for an economy that last year saw the slowest economic growth in a quarter century. Central bank Governor Zhou Xiaochuan told banks in March to reduce risk by better assessing customer creditworthiness in mortgage lending and said unauthorized loans by real-estate agents increase the chance of bad debts. Existing-home prices rose in 49 cities in May from a month ago, compared with 51 in April. They dropped in 13 and were unchanged in eight. Prices in May gained in 74 cities among the 100 tracked by SouFun Holdings Ltd., the owner of China’s biggest property web site, compared with increases in 71 the previous month. Average new-home prices rose 1.7 percent, a slower pace than increases of 1.45 percent seen in March. Bloomberg News

apan’s exports fell for an eighth consecutive month in May as shipments to China, the US and Europe slumped, undermining Prime Minister Shinzo Abe’s efforts to revive the economy. Overseas shipments declined 11.3 percent in May from a year earlier, the Ministry of Finance said on Monday. The median estimate of economists surveyed by Bloomberg was for a 10-percent drop. Imports fell 13.8 percent, leaving a trade deficit of ¥40.7 billion ($389 million). Japan’s modest economic gains this year are at risk as a slowdown in overseas demand and the yen’s surge make the nation’s products less appealing overseas and hurts the earnings of exporters. Finance Minister Taro Aso escalated his concern the yen on Friday, calling for coordination with his overseas counterparts to address what he described as disorderly moves in the currency market. “Ex por ts are stil l wea k as overseas demand remains dull a nd t he ef fects of t he wea k yen last year are dissipating,” Atsushi Takeda, an economist at Itochu Corp. in Tokyo, said before the report was released. “With the Brexit [Britain exit from Europe] vote coming up and expectations over Fed rate hikes weakening, the yen’s appreciation could be prolonged,

municipal ser vices, especially strike-plagued mass transit, street repairs and trash collection, deteriorated to Romans’ exasperation. “I will work to bring legality and transparency” to Rome’s administration, Raggi told supporters early on Monday. Declaring that “the citizens of Rome won,” she also pledged that “with us a new era begins.” W hi le R ag g i ’s v ictor y was widely expected, Renzi ’s clout took a surprise beating in Turin, where incumbent Mayor Piero Fassino, a Democratic Party veteran, conceded defeat to another female Five Star candidate, Chiara Appendino. Fassino blamed his loss on right-w ing forces, who, after faring poorly in the first-round balloting, joined up with Five Star supporters to defeat the center-left Democrats. Although Renzi had insisted

that the local voting would not reflect on his two-year-old national government, the premier has little to cheer about from the runoff results. Renzi had no immediate comment early on Monday. His big consolation came in Milan, where he had heavily backed Giuseppe Sala, who appeared headed to a close victory over his center-right challenger, Stefano Parisi. Sala had successfully managed Milan’s Expo event, a point of pride for Renzi. Another embarrassment for Renzi could be the new Rome’s mayor’s opposition to the city’s bid to host the Olympics in 2024. Renzi has campaigned for the Italian capital to clinch the bid, but Raggi has insisted that until corruption is cleansed from Rome’s City Hall machinery, construction and other preparations for the Games risk inviting more kickbacks and payoffs. AP

Bloomberg News

Ryan stands by Trump —despite reservations

A SH I NGT ON — Pau l Ryan said he has a responsibility as US House Speaker to back Donald Trump and prevent a Democratic win in November, promising to challenge the presumptive Republican presidential nominee if he doesn’t abide by conservative principles. “I have certain responsibilities, as not just Congressman Paul Ryan from the first district of Wisconsin, but as Speaker of the House,” Ryan said in an interview recorded for Sunday’s Meet the Press on NBC. “Imagine the speaker of the House not supporting the duly elected nominee of our party, therefore, creating a chasm in our party to split us in half,” Ryan said, according to a transcript of the interview. Still, Ryan added that he would speak out against Trump if the candidate puts a bad label on conservatism. “I’m going to speak out on it as I have, and I will continue to do, and I hope I don’t have to keep doing,” he said. Ryan has backed Trump despite

Rome has its 1st woman mayor OME—An antiestablishment newcomer, capitalizing on anger over political corruption and deteriorating city services, trounced Premier Matteo Renzi’s candidate in Rome’s mayoral runoff on Sunday to become the first woman to head City Hall in the Italian capital. With more than 80 percent of ballots counted from Sunday’s election, Virginia Raggi of the Five Star Movement led by a 2-to-1 margin. Her rival, Democrat Roberto Giachetti, who was backed by Renzi, conceded defeat less than an hour after polls closed. Giachetti said he had called Raggi to wish her luck. Dozens of people, including local politicians from the Democrats, right-wing parties and other political forces, have been implicated in corruption probes of city contracts. W h i le R ome’s est abl i shed parties’ power bases imploded,

increasing dow nside r isks to Japan’s economy.” While the yen slipped 3.8 percent in May, it’s jumped 15 percent this year against the dollar. The yen rallied to the strongest level since August 2014 last week after the Bank of Japan left monetary policy unchanged. The currency traded at 104.68 against the dollar at 9:21 a.m. in Tokyo, 0.5 percent lower. The Topix index of stocks was up 2.3 percent after dropping for the last three weeks. Aso said on June 17 that he was “very concerned” about one-sided, abrupt, and speculative moves in the currency market. Toyota Motor Corp. has warned that annual net income will probably decline for the first time in five years, due to the stronger currency. Monday’s report also shows that exports to the US fell 10.7 percent in May from a year earlier, while shipments to the European Union declined 4 percent. Exports to China, Japan’s largest trading partner, dropped 14.9 percent. A 24-percent decline in the value of steel exports was the biggest drag on shipments, followed by a 20-percent decline in the value of semiconductor parts. The biggest contribution to lower imports was from oil and natural gas, whose prices have fallen in Japan as the currency strengthens this year.

FIVE Star Movement candidate as Rome’s mayor, Virginia Raggi, poses for photographers as she casts her ballot in polling station in Rome on Sunday. She won in the runoff. AP/Fabio Frustaci

rebuking the candidate for questioning the impartiality of a federal judge of Mexican heritage. He has also opposed Trump’s plans to temporarily ban Muslims from entering the country and deport millions of undocumented immigrants. His main motivation, he said, is to prevent “another Democrat in the White House.” “I know Hillary Clinton won’t agree with anything we want to do,” Ryan said of the presumptive Democratic presidential nominee, adding that the former secretary of state would “put a bad judge on the Supreme Court.” Separately, Ryan said lawmakers shouldn’t “rush to judgment” with new restrictions on gun purchases after the attack on a nightclub in Orlando, Florida. The Orlando gunman legally bought an AR-15-style semiautomatic rifle this month, days before the attack on the club. “People have a constitutional right to bear arms,” Ryan said. “People have a constitutional right to have semiautomatic rifles.” Bloomberg News/TNS

World

sMirror ‘Big Bang’ to Brexit

www.businessmirror.com.ph | Tuesday, June 21, 2016

London fears end to Golden Age G ooses don’t come much more golden than the City of London. The narrow lanes of the Square Mile, lined with handsome neoclassical stone and gleaming modern glass, are at the heart of a British financial sector that paid £66 billion ($94 billion) in tax last year and employs more than 2 million people nationwide. It is oft-resented, has helped push the capital’s house prices out of reach for many, and required a bailout of more than £100 billion from taxpayers less than a decade ago.

It is also without a doubt the country’s most lucrative industry. Yet, ahead of a June 23 referendum on European Union (EU) membership, many of the city’s leading lights are deeply worried about its future. Since almost exactly 30 years ago, when Conservative Prime Minister Margaret Thatcher liberalized finance through a package of reforms so dramatic they were dubbed the “Big Bang,” London has become the undisputed financial capital of a united Europe—a status that now hangs in the balance. “Just because the city is strong at the moment doesn’t mean that it has a perpetual right to remain so,” said Marcus Agius, 69, the chairman of Barclays Plc. during the 2008 global financial crisis. “Brexit would be an act of supreme folly. In the future we would look back and wonder: ‘Why the hell did we do that? What were we thinking?’” City proponents of a Brexit see it as a way of making the financial industry more globally competitive by potentially unshackling it from some EU rules, like bonus caps. But while the 1980s Big Bang attracted international firms, the leaders of global banks say a “Leave” vote would drive them away. They employ the lion’s share of the 400,000 workers in the financial district and have been clear about their intentions. JPMorgan Chase and Co. CEO Jamie Dimon has 16,000 employees in London and other British cities, and this month told staff a vote to leave could mean a quarter of those jobs might be cut.

$94B

The Big Ben, as the Great Bell of the clock is popularly known, at the north end of the Palace of Westminster in London. Bloomberg News

Executives at Citigroup Inc., Goldman Sachs Group Inc. and HSBC Holdings Plc. have all issued similar warnings. On Wednesday Deutsche Bank AG Chairman Paul Achleitner said Brexit would be “an economic disaster for the UK,” where the lender employs more than 8,000 people. It doesn’t help that it’s also a delicate time for bankers in general; worries about the outlook for the global economy coupled with a slump in commodities markets have depressed trading while low interest rates have squeezed revenue. Central to the Brexit concern is the issue of “passporting.” Under EU law, a bank incorporated in any one-member state can sell its products and services in all 28, thus, accessing a $19-trillion integrated economy with more than 500 million citizens. It’s a regime that allows even the largest banks to get by with only satellite offices in hubs, like Paris and Madrid, and none at all in many other EU countries, keeping the overwhelming bulk of staff in London.

no guarantees it would remain in place. The same would be true of the ability of London trading f loors to continue euro-denominated trading and settlement without restriction. “It’s an illusion that passporting will continue if we leave,” said Peter Sands, 54, who ran Standard Chartered Plc. from 2006 until last year. “It’s therefore i ncont rove r t ible t h at ba n k s that ser ve Europe from London will have to move significant numbers of people.” Immigration law would be another worry; London banks are thick with French, Spanish and Italian citizens who’ve never had to apply for a British visa thanks to the EU’s free-movement laws, and whose future status would be unclear. Talks to clarify those questions would take years, and the bloc’s political leaders say they aren’t likely to grant any special favors. Last week Germany’s deputy finance minister emphasized that “there has to be a difference between being part of the family or just a neighbor.” Without a clear distinction, Jens Spahn told ARD Television, “it doesn’t make sense to say that there’s added value to being a member of the European Union.”

Up for negotiation

Acrimonious debate

The amount of tax paid by London in 2015

Like every other aspect of the EU’s relationship with the UK after a Brexit vote, passporting would be up for negotiation with

“The real problem we have in this is, nobody has a clue what ‘Out’ looks like,” said Alistair Darling, 62, the former Chancellor of the

Exchequer who oversaw the rescue of Royal Bank of Scotland Group Plc. and other lenders. “We do not know what the consequences would be. The referendum is just the beginning of the process.” The “Leave” campaign, fronted by for mer Cit y commodities brok e r t u r ne d U K I nd e p e n dence Par t y leader Nigel Farage and previous London Mayor Bor is Johnson, has arg ued the UK w il l be in a strong position to w in rapid concessions from the EU because of the size of its economy. W hen it comes to t he f i n a nc i a l i ndu st r y, t he y say, Br itain wou ld be able to reg u late itself as it sees fit. With polls showing the vote will come down to the wire, their contest with the “Remain” side got increasingly bitter last week. Chancel lor of t he Exchequer George Osborne was accused of economic scaremongering, while Bank of England Governor Mark Carney hit back against claims he sacrificed his independence to support the government. Campaigning was then suspended following the murder of Labour lawmaker Jo Cox, an advocate for remaining in the EU, in her Yorkshire electoral district.

Liquid lunches

The transformation of the city into a dynamo capable of driving much of the British economy has been stark. Before the Big Bang, when the UK’s financial markets

were heavily protected from foreign competition, it was staid to the point of sedation. The bankers were overwhelmingly British, the workdays short, and the lunches often liquid. Determined to shake up the ma rkets, T hatc her abol ished fixed commissions, allowed large banks to take over brokerages, and opened the London Stock Exchange to overseas players. The subsequent boom made many bankers and traders rich, not without substantial bitterness from those left out—especially since their prosperity coincided with the collapse of Britain’s heav y industr y in the poorer north, though some big banks since have set up back office operations outside London. Backers of Brexit within finance, who include Shore Capital founder Howard Shore and hedge-f und manager Cr ispin Odey, say a more independent City would be better positioned to chase global opportunities, while retaining access to the European market through a generous post-departure settlement. The architect of the Big Bang agrees with them. “The real threat to the city comes from not leaving,” because of expanding EU regulations that will hold back British finance, said Nigel Lawson, 84, who served as chancellor under Thatcher. “I don’t think EU membership has had a huge impact on the city’s success.”

London’s allure

To be sure, many of London’s advantages aren’t at all connected to its EU status. The English language, a respected court system, good universities and transparent government are all draws for financial firms. So too are the pleasures of living in one of the world’s great cosmopolitan cities—which many bankers might be loath to trade for the more modest charms of, say, Frankfurt. While Brexit would certainly be disruptive, “factors that are intrinsic to London” mean it will remain an attractive destination for finance whatever happens on June 23, said Mohamed El-Erian, the chief economic adviser at Allianz SE and a Bloomberg View columnist. But the City’s success is closely bound up with EU membership, argues Peter Mandelson, a former Labour Party minister and European trade commissioner. Under former Prime Minister Tony Blair in the 1990s, he was instrumental in rebranding labour as a champion of the city, making its prosperity a bipartisan priority for the first time. “London has grown as Europe’s financial center because we are part of the EU single market, because we’re part of the action,” said Mandelson, 62. If Britain leaves the EU, London “won’t end as a financial center, it will just be second-tier,” he said. “The golden goose will be maimed. The question is, how much?” Bloomberg News

Cameron accuses pro-Brexit campaigners of deceiving voters

rime Minister David Cameron entered the final week of campaigning ahead of the UK’s referendum on European Union (EU) membership with an accusation that his opponents are trying to deceive people into voting to leave. After two-and-a-half days when campaigning was suspended following the murder of Labour lawmaker Jo Cox, Sunday saw both sides return to the fray. The prime minister, taking audience questions on a BBC television special, criticized his opponents both over the tone of some of their anti-immigration messages and specific claims they’ve made. He singled out their assertions that Turkey is joining the EU; that Britain would have to sign up to a European army; and that EU membership costs Britain £350 million ($500 million) a week as examples of lies by his opponents. “I’m sure there are arguments for leaving, but those three, which

are the three leading things on their leaflets, are simply not true,” a visibly riled Cameron said. “It would be a tragedy if we damaged our economy and wrecked job prospects in our country on the basis of three things that are completely untrue.” The referendum on June 23 is being watched by governments and investors all around the world amid worries that a so-called Brexit would spark a wave of turmoil across global markets. Polls suggest the result is still too close to call. The pound soared to its strongest level against the dollar since June 7 in Monday trading in Asian markets and sterling volatility retreated to a one-week low, following polls published on Sunday showing “Remain” regaining the lead that it had lost in recent weeks. Elsewhere in the campaign: n Ten Nobel-winning economists wrote to the Guardian newspaper saying Britain is better off inside the EU.

n German Finance Minister Wolfgang Schaeuble said EU policymakers have safeguards in place to avoid “chaotic developments” should Britons vote to leave. n The pressure group Migration Watch said migrants cost the UK as much as £17 billion a year, without explaining how it arrived at the figure. n Former Conservative Party Chairman Sayeeda Warsi told The Times newspaper she has switched to “Remain” from “Leave” over the campaign’s anti-immigration rhetoric In his BBC appearance, Cameron repeated his message that departing the EU would be a risk, and that most economists warn it would damage the economy. “When I’m thinking of buying a house, I listen to an expert,” he said. “When I’m thinking of getting into a car, I listen to the mechanic. If I want to build a bridge, I want an engineer. People in the ‘Leave’ campaign are asking you to trust in

just a sense that it’s going to be OK. I don’t think that’s good enough.”

‘Didn’t quit’

It was when an audience member suggested to the prime minister that he resembled Neville Chamberlain, who appeased Adolf Hitler before World War II, that Cameron became most passionate. “At my office I sit 2 yards away from the Cabinet Room where Winston Churchill decided in May 1940 to fight on against Hitler—the best and greatest decision anyone has made in our country,” Cameron said. “He didn’t want to be alone, he wanted to be fighting with the French and with the Poles and with the others, but he didn’t quit. He didn’t quit on Europe, he didn’t quit on European democracy, he didn’t quit on European freedom.” The program opened with Cameron remembering Cox. “The most important thing for the politicians is to remember what she was all about, which was service, commu-

nity, tolerance,” he said. “Wherever we see intolerance, hatred, division, we should try and drive it out of our communities, out of our public life.”

‘Been a victim’

Ea r lier on Sunday, leading “Leave” campaigners were challenged in their own television appearances about the tone of the language they’d used in the Brexit debate. Asked if he had stoked up hatred, UK Independence Party leader Nigel Farage rejected the charge. “I think I have been a politician who has been a victim of it, to be honest with you,” he told ITV. “When you challenge the establishment in this country, they come after you, they call you all sorts of things.” Thomas Mair, charged with Cox’s murder, gave his name as “death to traitors, freedom for Britain” in a court appearance on Saturday. Farage suggested the killing has hurt the “Leave” campaign.

“We did have momentum until this terrible tragedy,” he said. “It’s had an impact on the whole campaign for everybody.” The probability of a vote to leave declined to just over 30 percent on Sunday from almost 40 percent on Wednesday, according to bookmaker odds processed by the Oddschecker web site. It’s the biggest drop in almost two weeks.

‘I shuddered’

Justice Secretary Michael Gove, one of the leaders of the official “Leave” campaign, sought to distance himself from Farage. He attacked a poster Farage unveiled last week showing queues of refugees coming into the EU. “When I saw that poster I shuddered,” Gove told the BBC. “I thought it was the wrong thing to do.” Later on Monday, Parliament will be recalled to allow Cox’s fellow lawmakers to pay tribute to her. That’s likely to mute some of the public campaigning. Bloomberg News

The World BusinessMirror

Tuesday, June 21, 2016

www.businessmirror.com.ph

briefs

Police, teachers clash in Mexico; six dead

OAXACA, Mexico—Violent clashes between police and unionized teachers who were blockading roads and burning vehicles in southern Mexico left at least six people dead on Sunday, according to union and state officials. The teachers from the radical National Coordinator of Education Workers are opposed to the mandatory testing of teachers as part of Mexico’s education reform and are also protesting the arrest of union leaders on money laundering and other charges. Sunday’s clashes in several municipalities in Oaxaca state involved federal and state police. Associated Press journalists saw riot police firing on protesters in Nochixtlan, where officials said the protests were strongest. AP

Taliban suicide bombing kills 14 Nepalese guards in Kabul

KABUL, Afghanistan—A Taliban suicide bomber killed 14 Nepalese security guards in an attack on Monday on their minibus in the Afghan capital, Kabul, the Interior Ministry and an Afghan security official said. The Nepalese were on their way to the Canadian Embassy where they work as guards, according to another Nepalese guard who was wounded in the attack. The attack was the latest by the Taliban, who have stepped up assaults, including in the Afghan capital, as part of their summer offensive. The insurgent attacks frequently target government employees and Afghan security forces across the country. The bomber was on foot when he struck the minibus, said Gen. Abdul Rahman Rahimi, the Kabul police chief. The minibus belonged to the employees of an unnamed foreign security company, he said. AP

UN: 65M people displaced in 2015

ENEVA—The UN refugee agency says persecution and conflict in places like Syria and Afghanistan raised the total number of refugees and internally displaced people worldwide to a record 65.3 million at the end of last year. The previous year, 2014, had already seen the highest number of refugees worldwide since World War II, with 60 million displaced people. But last year—when Europe staggered under the arrival of large numbers of migrants—topped that record by nearly 10 percent, the United Nations High Commissioner for Refugees (UNHCR) said on Monday in unveiling its annual Global Trends Report. The Geneva-based agency urged leaders from Europe and elsewhere to do more to end the wars that are fanning the exodus of people from their homelands. “I hope that the message carried by those forcibly displaced reaches the leaderships: ‘We need action, political action, to stop conflicts,’” said Filippo Grandi, the UN High Commissioner for Refugees. “The message that they have carried is: ‘If you don’t solve problems, problems will come to you.’” With stark detail, the UNHCR said that on average, 24 people had been displaced every minute of every day last year—or 34,000 people a day—up from six every minute in 2005. Global displacement has roughly doubled since 1997, and risen by 50 percent since 2011 alone—when the Syria war began. More than half of all refugees came from three countries: Syria, Afghanistan and Somalia. Turkey was the “top host” country for the second year running, taking in 2.5 million people— nearly all from neighboring Syria. Afghan neighbor Pakistan had 1.6 million, while Lebanon, next to Syria, hosted 1.1 million. Grandi said policy-makers and advocacy groups admittedly face daunting challenges helping the largest subset of displaced people: Some 40.8 million internally displaced in countries in conflict. Another 21.3 million were refugees and some 3.2 million more were seeking asylum. AP

Internally displaced civilians from Fallujah flee their homes during fighting between Iraqi security forces and Islamic State group during a military operation to regain control of the city, outside Fallujah, 65 kilometers west of Baghdad, Iraq, on Thursday. AP

AMID CLASHES

Thousands of Iraqis leave Fallujah

AGHDAD—Thousands of civilians are fleeing Fallujah after the city was declared liberated from the Islamic State (IS) group, the United Nations said, while an Iraqi commander reported fierce clashes as elite counterterrorism forces pushed to clear out the remaining militants.

10,000 The number of families who have fled Fallujah

IS fighters launched missiles, detonated a suicide car bomb and deployed snipers against Iraqi forces, Brig. Gen. Haider al-Obeidi said. “Iraqi forces are still advancing despite the strong clashes,” he said. O ver t he past t hree d ays, the UN says that nearly 10,000

families have f led Fallujah amid the heav y fighting. More than 80,000 civilians have f led Fallujah and its surrounding areas since the operation to retake the city from IS was announced last month, according to the UN. “Agencies are scrambling to respond to the rapidly evolving situation and we are bracing ourselves for another large exodus in the next few days as we estimate that thousands more people remain trapped in Fallujah,” said Bruno Geddo, the representative for the UN’s refugee agency in Iraq, in a statement on Sunday. Iraqi Prime Minister Haider al-Abadi declared v ictor y for Iraq on Fr id ay a f ter spec i a l forces recaptured most of the city after weeks of fighting. This leaves Mosul, Iraq’s second-largest city, as the only remaining

urban stronghold for IS militants in the country. The Norwegian Refugee Council says the civilian exodus has overwhelmed camps run by the Iraqi government and humanitarian groups, leaving thousands without shelter or proper sanitation. “Right now as we speak there a r e t h o u s a n d s w it h o ut a n y tents, without any shelter, they have slept overnight out in the open,” said Karl Schembri with the Norwegian Refugee Council, an international humanitarian organization that does extensive work in Anbar province, which surrounds Fallujah. Schembri said the humanitarian situation in Anbar province following the Fallujah operation is potentia l ly “catastrophic.” Those f leeing the city also spoke of a retreat by the extremists, Schembri, regional media advi-

sor for the Norwegian Refugee Council, added. “ The displaced people we’ve spoken to said that yesterday, early morning, they noticed that the ISIS [Islamic State in Iraq and Syria] fighters were withdrawing from key checkpoints around the city,” Schembri said in a telephone inter view from Baghdad on Friday. Their withdrawal, he said, emboldened thousands of civilians to flee Fallujah and risk being killed by explosive devices left behind by the extremist group. “Between yesterday and today, an estimated 20,000 people have left,” Schembri said. “It’s a tidal wave of the displaced coming to the camps.” The conflict that erupted in Iraq after IS blitzed across the country in the summer of 2014 has forced more than 3.4 million people to flee their homes. AP and TNS

In Jordan camp, Syrian refugees prepare for long exile

AATARI REFUGEE CAMP, Jordan—Salam Ashara and his family left Syria in early 2013, when no one expected the civil war in their country to rage for years with no signs of relenting and create the worst refugee crisis since World War II. The Asharas were among the first families to settle in Zaatari, Jordan’s first and now its largest refugee camp, with 80,000 residents. Zaatari has grown up around them as they forged new lives among the dust and dirt, preparing for years in exile. They are part of the mass displacement of Syrians—more than 4.8 million have fled their homeland since 2011, including 655,000 who have settled in Jordan. Refugees’ conditions have worsened. Many scratch out a living in exile close to home or risk their lives crossing deserts and seas. Some learn new languages and others face rising hostility toward the displaced in the Middle East, Europe and North America.

The UN refugee agency, marking World Refugee Day on Monday, says persecution and conflict in places like Syria and Afghanistan have raised the total number of refugees and internally displaced people worldwide to a record 65.3 million by the end of 2015. The previous year, 2014, had already seen the highest number since World War II, with 60 million displaced people. Meanwhile, aid agencies lament chronic funding shortages. A UNled aid appeal seeks $4.55 billion for Syrian refugees and host communities this year, but by April less than a quarter of the money had been received. Donor countries are shifting the emphasis from humanitarian aid to long-term development in the regional host countries. It is part of efforts to discourage refugees from migrating to Europe, but education and work programs take time to kick in. In Zaatari, the eight-member Ashara family—Salam, his wife

Hoda and their six children—is trying to make a new home. They live in two pre-fab trailers that they have connected with a tarpaulin canopy. They have two bedrooms, a living room, a bathroom and a kitchen—relative luxury for a refugee camp. Ashara owns a housing goods store in Zaatari’s bustling market and once served as a community policeman in the camp. After hours, the 43-year-old writes poetry and uses his verses to keep the memory of Syria alive for his children. One is titled, “Sixth Year,” a reference to the duration of the Syria conflict. “We entered our sixth year saddened and in pain. Every day my son asks me, ‘How long, my father, until we return? I miss the children of our street, I miss the taste of our water and the weather of our gorgeous country,’” he sings to his sons Ayman, 13, and Saeb, 11. A l l of h is c h i ld ren, e xcept 2-yea r- old Moha mmad, were bor n in Sy r i a, a nd he hopes

h i s poet r y c a n se c u re t he i r memor ies of home. A sh a ra’s a r t once l a nded h im in ja i l. In 2012, as t he conf l ict was intensif y ing , members of Sy r ia’s fea red pa ra m i l it a r y g roup, t he shabiha, abducted A sha ra from his family home in Sy r ia’s sout her n Dera a prov ince. Ashara says he was taken because he had published songs and poems protesting against the government of Syrian President Bashar al-Assad. W hen Ashara was released four months later, an air strike d e v a s t at e d t he i r ne i g h b or ’s home. The Asharas decided it was time to leave Syria. They packed bags and headed to Jordan, paying smugglers to take them past checkpoints. T hey walked the final 3 kilometers laden with their heavy belongings. At the time, thousands were escaping Sy ria, heading to Turkey, Lebanon and Jordan. Zaatari, which before the war was less than an hour’s drive

from Deraa, was established in the summer of 2012. It quickly swelled from a few tents to a defacto city of over 100,000 people. The population dropped when Jordan’s second-largest camp, Azraq, opened in 2014. Ashara doesn’t expect to return home soon. He hopes his children stay in school, marry well and prosper in the camp. “If the regime fell tomorrow, we couldn’t return for another 10 years,” he says. “Ten years. Because what we will face in Syria will be much worse than what the people are now facing in Libya. In Libya it won’t be another 10 to 20 years until it returns to half of what it was. With Syria I believe the dark times will be much, much worse.” He sits down, takes out his notebook, and begins reciting. His sons lean in on his right and left, Ayman looking at the words, Saeb focused on his father’s face. “Hear the voice of our village, and ask your loved ones about the conditions of exile,” he sings. AP

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Iran officials disrupted ‘biggest terrorist plot’

EHRAN, Iran—Iranian intelligence officials have broken up “the biggest terrorist plot” to ever target Tehran and other provinces in the Islamic Republic, the country’s state television reported on Monday.

An anchor on state television read off a statement attributing the information to Iran’s Intelligence Ministry. Officials could not be immediately reached for comment to elaborate. Several suspects have been arrested and are under interrogation over the plot, after agents seized ammunition and bombs, the state TV said. The semi-official Fars news agency quoted A li Shamkhani, the secretar y of Iran’s Supreme National Security Council, as saying the attack was timed to hit during the Muslim holy month of Ramadan. The report didn’t identify those arrested, though it called them takfiris, a derogatory term in both Arabic and Farsi referring to Muslims who accuse others of being “nonbelievers.” Iranian authorities often refer to followers of the Sunni militant Islamic State (IS) group as takfiris, though it isn’t clear if this case involved the extremist group that holds territory in Iraq and Syria. Shiite-power Iran has been helping both the Syrian and the Iraqi government in their battles against the IS group. It has warned of possible militant attacks targeting the country, which largely hasn’t seen such attacks since the

immediate aftermath of its 1979 Islamic Revolution. Iran’s staterun Irna news agency also carried a similar report about the disrupted attack citing the Intelligence Ministry, though it called those involved Wahhabi takfiris. Wahhabism is an ultraconservative school of Islam practiced predominantly in Saudi Arabia. Relations between Iran and Saudi Arabia have frayed following the kingdom’s execution of a prominent Shiite cleric in January and subsequent attacks by protesters on Saudi diplomatic posts in Iran. The kingdom cut diplomatic relations with Tehran following those attacks. Iran recently announced it would not be sending pilgrims to Saudi Arabia for the annual hajj pilgrimage, as it said the kingdom did not meet Iran’s requests for better security for Iranian pilgrims. The hajj pilgrimage is required of all able-bodied Muslims once in their lifetime. In May Iran’s Intelligence Minister Mahmoud Alavi announced that 20 “terrorist groups” that planned to detonate bombs and cause insecurity across the country had been dismantled. It’s unclear whether that included the plot announced on Monday by state television. AP

China restricts TV shows based on foreign formats

Juvenile lifers await chance for parole Trump proposes: US should

EIJING—China is restricting TV s h o w s t h at u s e f o r m at s f ro m abroad, such as The Voice of China, which is based on a Dutch talent show, in a move it says is intended to lead to more innovation and original programming among Chinese TV channels. The State Administration of Press, Publication, Radio, Film and Television has issued similar orders in the past to satellite TV channels, limiting variety shows, reality programs and, most recently, programs that employ celebrities’ children. The directive, the text of which was published last week on China.com, a news portal run by the Cabinet’s information office, said that some channels were “still too dependent on broadcasting foreign programs” and had few original ideas. The directive called on broadcasters to heed President Xi Jinping’s call “to establish cultural self-confidence” and “make quality programs with Chinese cultural characteristics.” Authorities are keen for China’s film and TV industry to make products capable of attracting a global audience. They are also keen to wrest back Communist Party control over cultural industries to make sure they still have the power to dictate public opinion. In the published directive, satellite TV channels who want to broadcast programs with foreign rights must submit them for examination to provincial broadcasting regulators. Satellite TV channels are only allowed to broadcast two programs with formats from abroad during evening prime time each year. Only one such program being shown in China for the first time may be broadcast in a year, and not during the 7:30 to 10:30 p.m. prime time. Channels that broadcast newly imported TV programs without approval will be banned from showing any foreigninspired programs for one year. The national regulator has frequently criticized reality shows and earlier this year banned the children of celebrities from appearing on such shows, taking the sail out of the wings of Where Are We Going, Dad?—a South Korean-inspired show that was such a hit in China that one episode was shown in cinemas. AP

HILADELPHIA—It’s been six months since the US Supreme Court ruled that some 2,500 “juvenile lifers” could seek a chance at parole for their childhood crimes, but only a few aging inmates have walked out of prison. Public defenders fear many will need the blessing of a judge, a parole board and, perhaps, the victim’s family, even after Justice A nthony Kennedy w rote that only the “rarest of children” are so “incorrigible” they should never go free. At least one judge in rural Pennsylvania decided this month that 46 years was punishment enough for a foster child sent away at age 15 for killing a girlfriend while rabbit hunting in 1969. Jackie Lee Thompson, 61, appears to be the first of the state’s 500 or so juvenile lifers released since the Supreme Court ruling. “At 15, you really can’t know the impact,” said Thompson, who is living with a niece in Wellsboro, in north-central Pennsylvania, near where the crime occurred. “In the later part of the 1970s, it really slapped me in the face and made me rea l ly starting thinking about what I did,” he told The Associated Press in a phone interview on Wednesday. “It’s not just the victim that got affected here. It’s the whole community. It’s your family.” The Supreme Court in 2012 outlawed mandatory life without parole sentences for juvenile defendants and this year said the ruling should be retroactive. That has left some states to devise a review process, and new sentencing grid, for people given the sentence as minors in adult court. States with the highest caseloads include Pennsylvania, with more than 500; Michigan, Louisiana and California, with more than 300 apiece; and Florida, with more than 200. For victims’ families, the new court hearings can mean another round of grief. “How do you go back 26 years and have

Iranian women perform their noon prayers in a mosque at the shrine of Shiite Saint Abdulazim during the Muslim holy fasting month of Ramadan in Shahr-e-Ray, south of Tehran, Iran, on Sunday. AP/Vahid Salemi

2,500 The number of juvenile life termers seeking parole for crimes committed during childhood

a fair proceeding?” said Jennifer Bishop-Jenkins, of Northfield, Illinois, whose pregnant sister and brother-in-law were fatally shot by a 16-year-old in 1990. She leads the National Organization of Victims of Juvenile Murderers. “Nobody in our group thinks that all juveniles should have the books thrown at them for the most minor of offenses...but there are some that can be very, very dangerous even as teenagers,” she said. In Thompson’s case, the victim’s sister and elderly father joined about 30 people in court for his June 6 resentencing hearing and attended the welcome-home picnic held the next day. He had done everything he could to better himself in prison, earning an associate’s degree and mastering several trades, supporters said. “This is precisely the type of case that the Supreme Court of the United States is talking about,” said Thomas Walrath, the juvenile defender who represented him. “[He] is a completely different person than the juvenile who committed this act.” Neither of the inmates named in the two Supreme Court cases— Evan Miller, of Alabama, and Herbert Montgomery, of Louisiana— have been resentenced, despite the court finding their no-parole sentences unconstitutional. “It’s really remarkable, just how difficult it is, even with the clear guidance from the Supreme Court,” said Joshua Rovner, who has researched the issue for The Sentencing Project.

In Philadelphia, with 300 of the state’s juvenile-lifer caseload, the review process could take several years. Authorities are trying to prioritize the oldest cases, like that of 79-year-old Joe Ligon, who has served 63 years for killing two people when he was 15. “They want him to go before a parole board. I mean, seriously?” asked Marsha Levick, cofounder of the Juvenile Law Center. “It’s pointless to keep him in prison.” District Attorney Seth Williams believes the law requires the parole board to make the final decision. He said he can’t wave “a magic wand ” and let people out of prison. One of the two Philadelphia men resentenced so far, Tyrone Jones, is eligible for parole after receiving a new sentence of 35 years to life. Jones, 59, has also pursued innocence claims over the years, saying his confession in a 1973 gang-related shooting was coerced. That could be a Catch-22 if the parole board wants to hear remorse. “You can’t apologize for something you didn’t do,” said lawyer Hayes Hunt, who has worked the case pro bono for years. “We are confident and hopeful the parole board will understand.” About 100 of the juvenile lifers from Philadelphia have been locked up for more than a quartercentury, sentenced when judges had only two choices for first- or second-degree murder: the death penalty or life without parole. That meant a life sentence for teens like 17-year-old Earl Rice Jr., sentenced after a woman whose purse he snatched in West Chester in 1973 died from the resulting fall. Rice is now 60. The victim’s family opposes his release. In Michigan about 360 juvenile lifers await resentencing, but the courts still routinely hand out life-without-parole sentences in new juvenile cases, something Williams, in Philadelphia, said he will no longer pursue. AP

consider profiling Muslims

ASHINGTON—Donald Trump suggested on Sunday that the United States should “seriously” consider profiling Muslims inside the country as a terrorism-fighting tool, the latest example of the Republican presidential nominee-in-waiting increasingly backing positions that could single out a group based on their religion. “We really have to look at profiling,” Trump said in an interview broadcast on Sunday on CBS’s Face the Nation. “It’s not the worst thing to do.” The presumptive Republican presidential nominee added that he “hate[s] the concept of profiling, but we have to use common sense” over “political correctness.” Trump’s proposal runs counter to Justice Department policy, which explicitly prohibits profiling on the basis of race, religion, ethnicity and national origin. That profiling ban applies not only to federal agents but also to local lawenforcement officers who participate in federal task forces. Trump’s increasing embrace of policies that could isolate Muslims in America is extraordinary for a candidate assured of his party’s presidential nomination. The proposals have been roundly dismissed and criticized by many Republican leaders, including House Speaker Paul Ryan. Civil libertarians, Muslims and others also have strongly disagreed, arguing that profiling is unconstitutional and often constitutes unlawful discrimination based on race, religion and other factors. Law enforcement should remain allied with groups that might have helpful information, Attorney General Loretta Lynch said in an interview that aired on Sunday. “It is very important for to us maintain our contacts within the Muslim community, because, often, ind iv idua ls, if they’re

f rom t hat communit y and they’re being radicalized, their friends and family members will see it first. They will see activity first. And we want that information to come to us,” Lynch said on CNN’s State of Union. Trump’s statements are consistent with his other, long-expressed views on how to stop terrorism in the United States, including a temporary ban on foreign Muslims from entering the country until the US can figure out “what is going on.” He has intensified his approach since Omar Mateen carried out the worst mass shooting in modern American history on June 12 at a gay club in Orlando, Florida. Fortynine people were killed in the attack, which stoked a mix of fears about terrorism, guns and violence against gays. Mateen’s motive isn’t clear, but a letter from the chairman of the Senate Homeland Security Committee, Republican Ron Johnson of Wisconsin, said Mateen wrote on Facebook that “real Muslims will never accept the filthy ways of the West.” He also pledged allegiance to the Islamic State (IS) group, his ex-wife said he was mentally ill and his father suggested that gays had angered him. Trump’s response to the tragedy was, in part, a pointed confrontation with Muslims, whom he singled out for knowing where terrorists are and not turning them into authorities. In the same speech, he also expanded his ban on Muslim immigration to include people from regions with a history of terrorism. On Sunday Trump also said the government should investigate mosques in the US in much the same way the New York Police Department’s (NYPD) Demographics Unit spied on Muslims and mosques around the city with help from the Central Intelligence Agency. AP

A10 Tuesday, June 21, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

Does anyone trust the government?

t is interesting to think about how humans created “government.” We can look at some societies that are not that far removed from the governing structures that their ancestors followed countless generations ago.

The governments seemed to center on some sort of a “Council of Elders” type of system. Decisions affecting the whole and the settling of disputes were given to those—usually but not always—men who were older and, supposedly, had more knowledge and experience. There was probably a practical aspect to this, as the senior citizens might not have been able to contribute, as well, to basic survival, like hunting, for example. The wisdom of these elders was trusted, probably, until grave mistakes were made and then an “impeachment” process took over. We talk about the people’s approval of how government leaders and agencies are doing their jobs and how much we trust them to do what is right. The Philippine Trust Rating is a proprietary survey made since 2011 by the private EON The Stakeholder Relations Group. Trust is a tricky intellectual emotion. By definition, it means to have confidence or a firm belief in the “reliability, truth, ability, or strength of someone or something.” Can you trust someone who is reliable and has high ability but has problems with telling the truth? Further, how does a person answering the question rate and balance each of those characteristics? EON reports that these are the top drivers for trust in the Philippine government: ensures peace and security; helps the poor; improves the economy, disaster preparedness; and provides good job opportunities. However, if those are the important considerations, then it would appear that confidence in reliability and competence is what people mean by “trust.” Leaders come and go so, therefore, trust in the institution may be more important than who is in charge. Here, the numbers are startling and depressing. While this is not directly applicable to the Philippines as the survey was made in the United States, it may give an insight into what people generally think about governments worldwide. Americans have been asked since 1958 if they trust the government to do what is right all or most of the time. More than 70 percent said “yes” in 1958. Today, only 19 percent give the same answer. John F. Kennedy had a 68-percent trust rating in 1960; trust in Barack Obama is at 21 percent. What has happened in a generation to create this lack of trust in government? Has there been a declining trend of quality of leadership? Are the people more demanding or less trustful, in general, today than before? No study has been able to give a reasonable and universal explanation. However, if a business saw its trust rating fall like this, the company would be in serious danger of closing down and all those in management would immediately be terminated. Maybe that is exactly what is going on in global politics.

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THE Entrepreneur Continued from A1

hat’s good news, from the perspective of the finance people, whose goal is to keep the amount the government spends as close as possible to the amount it earns in terms of taxes. The bad news: the country and the people must pay the price in the form of slow economic growth, which affects the lives of Filipino families. In contrast to the government’s healthier fiscal condition, the economy grew by a disappointing 6.1 percent in terms of GDP in 2014, down from the record-high 7.2 percent posted in 2013 and short of the official GDP growth target of 6.5 percent to 7.5 percent for 2014. Even before the official report on the economy came out, analysts were predicting a lower-than-target performance, mainly because of underspending by the government. The Asian Development Bank (ADB) also blamed weak public spending as a contributor to the dismal GDP growth. Underspending continued in 2015, as a result of

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which GDP growth further slowed down to 5.8 percent, the slowest pace in four years. Among the programs adopted by the government to reduce the deficit is the Public-Private Partnership (PPP) Program. The PPP is supposed to be the flagship program to accelerate infrastructure development, but it was also used to rein in the fiscal deficit by spending less and keeping government borrowings low. Thus, the outgoing administration has succeeded in establishing a healthy financial record for the government, but has failed to sustain GDP growth at the 7-percent pace, which is what is needed to spread

The PPP Program will help accelerate infrastructure development, but the government should not rely on it heavily because the profit motivation of private-sector participants will mean more costly services to the public. the benefits of economic gains down to the socioeconomic ladder. With the incoming administration’s commitment to pursue infrastructure development, I believe it is time to review the PPP Program. The primary objective of the government is to provide free basic services, such as roads, to the people. If that’s not possible, at least provide the services at the lowest possible cost. The new administration has to decide whether to use PPP as a means to raise money for the government or to achieve its primary objective. The PPP Program will help accelerate infrastructure development, but the government should not rely on it heavily because the profit motivation of private-sector participants will mean more costly services to the public. According to the PPP in Infrastructure Resource Center (PPPIRC) of the World Bank, the

Taxes: Jail the pusher or the user?

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PPP: Infra program or fiscal measure?

John Mangun

OUTSIDE THE BOX

n the law-enforcement battle against illegal drugs, there has always been a debate about whether the emphasis should be on stopping the pusher of the drugs or the user. The drug dealer is supposedly the “big fish” and is often protected by the powerful and wealthy. But if you take out the pusher, there are no drugs for the user. The user is sometimes characterized as a victim of illegal drugs. Law enforcement can more easily catch the user, but there are many more of them, which is both an advantage and a disadvantage. Yet, without buyers and users, the illegal-drug business goes away. But this is not a discussion of illegal drugs. This is about taxes. A “tax” is a forced contribution to state revenue and there are two kinds of taxes. Income tax is money taken from you when you earn. A consumption (or sales) tax is money taken from you when you spend. In the battle of government to take your money, there has always been

a debate about whether the emphasis should be on taking your money first or later. Going after the drug pusher could be dangerous, as high-ranking government officials might be involved, and hundreds if not thousands are being paid off to look the other way. The Mexican drug cartels and American organized crime are good examples. It is safer to go after the little guy—the users. If the government relies on consumption taxes, it is like concentrating on arresting the pushers. The government has to wait to get its revenue and has no certain idea of how much it is going to collect. Big

If crazed druggies are running wild in the streets, you jail the users. If drug abuse is a growing problem for the future, jail the pusher. If the government is desperate for money just to keep its doors open, more income tax. If the government has a sound financial position and is looking for long-term economic investment, more consumption tax. The Philippines is the latter.

business and others that depend on government contracts are going to be very unhappy and complain. If the government relies on income taxes, it is like concentrating on arresting the users. It gets immediate results and revenue, and the little fish are probably not going to rise up in revolt. The feeding trough of government-generated business is guaranteed. Now we can release the ugly demons that are the “experts” as they decide the economic truth of which tax—income or consumption— is better for the economy and the people. “Government experts” favor income tax; consumption taxes are

development, bidding and ongoing costs in PPP projects are likely to be more than for traditional government procurement processes, so the government must determine whether the greater costs involved are justified. The PPPIRC also points out that there is cost attached to debt, referring to loans that PPP proponents will incur to finance their projects. “While private sector can make it easier to get finance, finance will only be available where the operating cash flows of the project company are expected to provide a return on investment [i.e., the cost has to be borne either by the customers or the government through subsidies, etc.],” the PPPIRC says. Another problem with up-fronting all the big projects is that it limits the playing field to a few, the two or three biggest players, to the exclusion of the midsize players. Thus, it is creating an oligopoly, which I think runs counter to President Rodrigo R. Duterte’s promise to level the playing field for businessmen. That’s the problem when the government allows the finance people to run the infrastructure program. For comments, e-mail mbv.secretariat@gmail. com or visit www.mannyvillar.com.ph.

favored by most “economic experts.” But like a discussion on the death penalty, it depends on who is doing the talking. Singapore has the lowest percentage of illegal-drug use in the world, according to the United Nations. But the question is, does capital punishment account for that? Income tax has the most positive results in the short term, providing immediate funding for governmentprovided infrastructure and the like. Consumption tax has the most beneficial long-term benefits, encouraging people to save money and for businesses to spend more for capital expenditures. If crazed druggies are running wild in the streets, you jail the users. If drug abuse is a growing problem for the future, jail the pusher. If the government is desperate for money just to keep its doors open, more income tax. If the government has a sound financial position and is looking for long-term economic investment, more consumption tax. The Philippines is the latter. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.

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Rapid industrialization is the key to what South Korea is today Cecilio T. Arillo

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EOUL, South Korea—A member of the Organisation for Economic Co-operation and Development (OECD) and the Groupof-20 major economies, this country ranks today as the world’s 11th-largest economy by nominal GDP and 13th by purchasing power parity (PPP) based on the world’s economic ranking. According to Investopedia, “PPP is determined in each country based on its relative cost of living and inflation rates. Purchasing power plus parity ultimately means equalizing the purchasing power of two differing currencies by accounting for differences in inflation rates and cost of living.” Having pursued an industrialization policy, this leading tiger economy in East Asia rose at an annual average economic growth of 10 percent for 30 years onward beginning with the Saemaul Undong Movement (Park Chung-hee,1962-1966) that rapidly transformed the country into a high-income economy, known as the “Miracle on the Han River.” It has an advanced trimodal (airland-water) transportation system that cohere with one another, making movements of people and commerce faster and easier from any point of the country, with this city as the hub. Busan or the Port of Busan, the second-largest city, where this writer toured the other day, is now one of the world’s shipbuilders of any size. By train, it’s only three hours from here, a route travelers will surely not find a dull moment to watch a modern countryside scenery with rolling mountains, modern farming communities, industrial enclaves, highrise residences and concrete bridges over clean rivers and streams. With OECD’s third-largest budget surplus, the world’s fifth-largest exporter and the seventh-largest importer, this country now is one of Asia’s most advanced economy and democracy with fundamental rights protected by the most developed rule of law in this part of the world. Because of its fully developed educational system, universal health care, freedom of religion and high civil liberties, the country saw the fast rise of a globally influential and multidimensional culture that included K-pop and K-drama, a highly fashionable style known as the “Korean Wave.” Home to the United Nations Green Climate Fund, it is a leader in low-carbon green growth, committed to helping developing countries as a major contributor in the UN Development Index, having had a high level of social cohesion and is rated highly in peaceful tolerance and inclusion of minorities. In the Human Development Index, it is East Asia’s most developed country and the world’s eighth-highest median household, the highest in Asia, and the country’s singles, in particular, earn more than all Groupof-Seven nations. Globally, it ranks highly in personal safety, job security and ease of doing business. As a leading OECD nation in graduates in science and engineering, this country is home to Samsung, the world’s leading smartphone and TV maker, LG and Hyundai-Kia; and is named by the Bloomberg Innovative Index as the globe’s most innovative country in economic research and development intensity and patents filed per GDP. In cyber-technology ratings, it has the world’s fastest Internet speed and highest smartphone ownership, ranking first in information and communication technologies development, e-government and 4G LTE coverage, thus, becoming the globe’s first country to fully transition to high-speed Internet and

South Korea, also known as Koryŏ, is now a highly urbanized country at 92 percent, with a distinctive urban lifestyle, half of its population live in modern condominiums concentrated in this capital with 25 million people, making it the world’s sixth leading city. Threequarters of this country is mountainous, making it a popular winter-sport destination in Asia, and chosen to be the host of the 2018 Winter Olympics. the world’s first mobile TV broadcast with 97 percent of cell phones already having Internet access. Its rigorous educational system and the establishment of a highly motivated and educated populace is largely responsible for spurring the country’s high technology boom and rapid economic development. Having almost no natural resources and always suffering from overpopulation in its small territory, which deterred continued population growth and the formation of a large internal consumer market, it adopted an export-oriented economic strategy to fuel its growth, and, thus, became the only developed country included in the group of Next Eleven. Born out of the ancient Kingdom of Goguryeo, South Korea, also known as Koryŏ, is now a highly urbanized country at 92 percent, with a distinctive urban lifestyle, half of them live in modern condominiums concentrated in this capital with 25 million people, making it the world’s sixth leading city. Three-quarters of this country is mountainous, making it a popular winter-sport destination in Asia, and chosen to be the host of the 2018 Winter Olympics. This country is one of the world’s oldest civilizations as shown by earliest Korean pottery dating back to 8000 B.C., with three kingdoms flourishing at first-century B.C. One of them, Goguryeo, ruled Northeast China, parts of Russia and Mongolia under Gwanggaeto the Great. Since their unification into Silla and Balhae in the seventh century, Korea enjoyed over a millennium of relative tranquility under long lasting dynasties with innovations, like Hangul, the unique alphabet created by Sejong the Great in 1446, enabling anyone to easily learn to read and write. Its rich and vibrant culture left 17 United Nations Educational, Scientific and Cultural Organization Intangible Cultural Heritages of Humanity, the thirdlargest in the world, along with 12 World Heritage Sites. Then Imperial Japan annexed this country in 1910 due to its strategic and central location, and after its surrender in 1945, it was divided into North and South Korea. A North Korean invasion led to the Korean War from 1950 to 1953. Peace has since then continued to prevail, after the countries agreed to discuss unification. This country, though, has the world’s 10th-largest defense budget to make sure it can defend itself from any threat. To reach the writer, e-mail cecilio.arillo@ gmail.com.

Faster, cheaper Internet Ernesto M. Hilario

ABOUT TOWN

onsider the numbers: The Philippines has an average household download speed of 3.64 megabytes per second (Mbps), thus, putting it 176th among 202 countries in last year’s survey by the Internet metrics provider Ookla. This is eight times slower than the global average broadband download speed of 23.3 Mbps. In Asia the Philippines has the second-slowest Internet speed. Among 22 Asian countries surveyed by Ookla, the Philippines has a download speed just a bit faster than cellar dweller Afghanistan. Despite our slow Internet service, it is very expensive at $18.19 per Mbps compared with the global average of $5.21. But Internet users can look forward to change in the horizon because of the recent P70-billion acquisition by the country’s leading telecommunications companies—Philippine Long Distance Telephone (PLDT)-Smart and Globe Telecoms—of the radio frequencies in the 700-megahertz spectrum from San Miguel Corp. (SMC). The joint use agreement between the two telcos, said Manuel V. Pangilinan, the chairman and president of PLDT and Smart, will make the goal of providing “Internet for all” a reality. Close on the heels of the deal, PLDT/Smart and Globe separately announced their initial plans for the high-speed mobile infrastructure in their respective wireless-and fixedbroadband networks. Globe recently set up its first site near the Hardin ng Bougainvillea at the University of the Philippines campus in Diliman, Quezon City,

with a download speed of 66 Mbps to 100 Mbps. For its part, Smart has deployed its first 700-MHz base station in Tanay, Rizal. It then set up its second MHz cell site in Matina, Davao City. Both sites have a download speed of 101 Mbps. According to PLDT, before the year is over, 360 cell sites in Manila, Cebu and Davao would be outfitted with equipment using the 700-MHz spectrum, while Globe would roll out the 700-MHz band in 200 sites before end-2016. The two telcos have already put up a total of 15,000 cell sites across the country. After rolling out their first LTE cell sites, PLDT and Globe moved closer to faster and affordable Internet services by signing a bilateral Internet protocol (IP) peering agreement on sharing each other’s online content. Under this IP memorandum of agreement signed on June 16, PLDT-hosted content and applications will be treated as local content, thereby removing the need for such content to be routed overseas, which entails additional transit costs and slower data transmission. The IP peering arrangement would allow Internet subscribers to download and upload local content faster and cheaper. Under this IP peering deal, PLDT and Globe will both provide their

Lead us not Teddy Locsin Jr.

Free fire

LREADY, Rodrigo R. Duterte’s finance guys are saying that there will be no tax relief. They refer to tax relief as Noynoy’s tax relief, which Noynoy did not push across six years. That discredits tax breaks by, No. 1, associating it with Noynoy, whose administration was roundly repudiated in the last election. And, No. 2, by attributing it to Noynoy, who must have considered it impractical. Because he did not push it, tax relief must be wrong. Or, No. 3, Noynoy thought his term extended beyond six years. This suggests that something wasn’t right with him; a suggestion I find deplorable. Always respect your predecessor, even if this one did not. It is true that only Jejomar C.

Binay promised tax relief for individuals and businesses, including tax-rate cuts, increasing tax exemptions and ending harassment of Chinatown by the Bureau of Internal Revenue. Duterte did not. He did initially, but changed his mind. But Duterte did

Tuesday, June 21, 2016 A11

PLDT and Globe moved closer to faster and affordable Internet services by signing a bilateral Internet protocol peering agreement on sharing each other’s online content. Under this IP pact, PLDT-hosted content and applications will be treated as local content, thereby removing the need for such content to be routed overseas, which entails additional transit costs and slower data transmission. subscribers with a 3 gigabits per second speed (Gbps) per month free traffic threshold. Apart from this IP arrangement with Globe, PLDT will also undertake a “complementary effective measure” on local caching, wh ich will allow the telco to work with global players, like Facebook, Google and YouTube, on storing popular Internet content in the Philippines so Filipinos can access these online data more quickly. What the joint acquisition by PLDT and Globe of SMC’s radio frequencies seeks to achieve is to resolve the unbalanced distribution of frequency bands essential to upgrading the country’s Internet backbone. The 700-MHz band will let the two telcos expand their mobile broadband networks to the countryside, enabling them to cut capital and network costs and, thus, lower prices for customers. Capitalizing on their new radiofrequency acquisitions, PLDT and Globe are increasing their capital expenditures to build on their respective fixed- and mobile-broadband networks with their newly acquired 700-MHz frequencies, which are cheaper and more efficient to use than operating under higher frequency bands. PLDT’s Smart intends to fire

Duterte said that, if nothing else, his would be an honest government; but as we all know from the Lord’s Prayer the greatest threat to integrity is temptation from which we pray the Lord not to lead us. promise to make life materially better if elected, since he has no spiritual aspirations whatsoever. Indeed, he listens to Apollo C. Quiboloy, who comes 2,000 years too late to be taken for an apostle after the resurrection of Our Lord Jesus Christ. Indeed, Duterte got the majority vote of the rich, of most of the middle class and almost all the lower classes. Still, Duterte did not promise tax relief. But if he does not extend tax relief; if he does not cut tax rates so more people can keep more of what they earn instead of giving a lot of it

A victim of his own negligence MAIL

Please e-mail your letters to the editor to oped@businessmirror. com.ph. Letters chosen for publication in this section are edited for brevity and clarity. This refers to the two-part article ‘Extortion and deportation at the hands of the Philippine Bureau of Immigration’ by Michael Brown, which was published in the BusinessMirror on June 13 and June 15, respectively. As my name was mentioned a number of times in the articles, allow me to clarify and air my side of the story. Deportation orders are deliberated upon and issued by the

Board of Commissioners, headed by the commissioner as chairman, and the two associate commissioners as members. At the time when Michael Brown’s deportation order was issued in October 2014, the Board was composed of myself and Associate Commissioners Abdullah Mangotara and Ronaldo Ledesma (OIC), all of whom are lawyers. The complaint against Brown was filed by a certain Mylene Murillo, who alleged, among others, that Brown worked at the Metropolitan Manila Development Authority (MMDA) as a traffic-management consultant. The complaint was previously dismissed, but was timely revived by a motion for reconsideration. In his answer, Brown said he did not need to secure the necessary work permit as he only did volunteer work for MMDA and was not paid for his services. MMDA, in a certification, admitted that Brown did volunteer work for the agency and was not paid

for services rendered. Upon deliberation, the Board came to a conclusion that Brown violated immigration laws by working without the necessary permit (despite voluntarily and without pay). The Board likened the volunteer work to missionary and charity work, which, likewise, required permits and visas. While Brown’s narrations make it appear that he is a victim of an unfair process, I say otherwise. At best, Brown was a victim of his own negligence. The deportation case was extensively deliberated upon by the Board, with the participation of the Board of Special Inquiry—a separate body designated to conduct deportation hearings. I find it unfair that Brown only remembers my name and blames me for all the misfortunes in his life. It could have helped if he had identified the people whom he dealt with, who, most probably, just used my name to get him to cooperate in their dealings—I cannot really say

up 360 cell sites with 700-MHz technology by the end of this year, while Globe plans to deploy 200 cell sites. PLDT will spend an extra $100 million—or almost P5 billion—for this LTE upgrade on top of its 2016 capex of P43 billion. At the same time, the PLDT/ Smart-Globe-SMC contract provides for the return of a substantial amount of frequencies to the government. This would keep the door open for a new player in the telecoms industry, thus, complying with the provisions of the anticompetition law—and belying fears that the joint use would, in effect, shut the door to the entry of a third player that could challenge PLDT/Smart and Globe in the domestic market. However, the goal of faster and cheaper Internet for Filipinos may encounter an unexpected obstacle with the recent statement by the newly organized antitrust body Philippine Competition Commission (PCC) that the PLDT-Globe deal would not be approved until after a comprehensive review. “A comprehensive review includes a determination of the relevant market, whether there will be substantial changes to the market structure, and the potential impact of the transaction on public welfare,” the PCC said. To this, PLDT honcho Pangilinan said last week the government should not meddle too much and even “get out of the way.” MVP explained that PLDT is pouring billions of pesos for the shift to digital, and that no government funds were involved in the company’s investment. “Whose money is being spent? It’s the private sector’s. There is no guarantee from the government, no government fund is involved, so get out of the way, period,” Pangilinan said.

E-mail: ernhil@yahoo.com

to the government only to be stolen and wasted, then how is he gonna help the people to a better life? To be sure, he did say he would keep Noynoy’s gargantuan Conditional Cash Transfer (CCT), which failed to get Noynoy’s picked successor elected; but more CCT only means that we all have to become dirt poor first before we can start small with CCT to get back to where we are now. For most of us, this is far from enough. Duterte said that, if nothing else, his would be an honest government; but as we all know from the Lord’s Prayer the greatest threat to integrity is temptation from which we pray the Lord not to lead us. So unless the President removes from his officials the temptation to steal taxes by leaving them less taxes to pocket, we cannot expect any change for the better in the honesty department. The Lord be with us and keep us—well.

if these were true or not, because I never participated nor condoned any form of illegal and irregular transactions. Brown could have helped the Bureau and himself by communicating with me directly. My office was always open for everyone who wanted an audience with me. I can also be reached through my telephone, or through letters. These he never even attempted to do. However, he took the crooked path of engaging in shady transactions and putting all the blame on me. I challenge him to lay down his evidence against me, if he actually has one. On my part, I can say that the processes involving him were above board. Remedies are afforded to him by the law. He just has to take it, and avoid the shortcuts that he is used to taking. I hope this clears the issue once and for all. Siegfred Bueno Mison, Esq.

2nd Front Page BusinessMirror

A12 Tuesday, June 21, 2016

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‘Law needed in South China Sea’ W ith nonmilitary actors, like coast guards, increasingly active in the disputed South China Sea, former US Coast Guard Commandant Thad Allen said international law was becoming even more important to keeping a lid on tensions.

Describing the region, including the Strait of Malacca and the Java Sea, as one of the world’s most visible maritime choke points, the retired admiral expressed the need to maintain freedom of movement through the waters. An international court is expected to rule within months on a Philippine challenge to China’s claims to more than 80 percent of the South China Sea, through which more than $5 trillion of trade passes each year. “These issues need to be decided by an independent third party,” Allen said in an interview on Friday in Singapore. “We’d all be well-reasoned to wait for that to happen and see what the results are.” The region was “very critical to commerce not only for the US, but a number of countries,” he said. In recent years, China has reclaimed more than 3,000 acres (1,200 hectares) in the waters and beefed up its military presence, causing the US to increase its own naval activity in the West Pacific. The buildup has put the 10-member Association of Southeast Asian Nations grouping on edge. “Making a claim is not the same as having it adjudicated at a UN forum, in a tribunal,” Allen said. “And that’s the place to have that decision made, not just a de-facto action taken unilaterally by any one country.” China has deployed its coast guard to assert its claims in the

You need to protect your exclusive economic zone.”—Allen South China Sea, which crisscross those of countries like Malaysia, the Philippines and Vietnam. Increasingly, China’s coast guard vessels resemble naval vessels in weapons and other capabilities, and the country has been accused by its neighbors of harassing fishing and military boats, chasing them from disputed waters. Allen, who retired in 2010 and is now an executive vice president at Booz A llen Hamilton, said coast guard services would play an more important role in securing national fish stocks and other economic assets, such as oil, gas and mineral deposits. “I believe there is an ascendancy right now of coast guard-like agencies,” Allen said. “Unless you are trying to project power across the globe—and there are very few countries trying to do that—you need to protect your exclusive economic zone.”

Other regions

Friction at the intersection of

ENABLING SUCCESS Eric Alberto, PLDT executive vice president and ePLDT president and CEO, tries a virtual-reality headset during the Philippine ICT Leadership Convention 2016, hosted by PLDT and research firm International Data Corp., to help enterprises sustain their growth in the digital era. Also in photo is Nerisse Ramos, ePLDT chief operating officer. NONIE REYES land and sea boundaries wasn’t restricted to the South China Sea, Allen said. It was also visible in the Caribbean, West Africa’s Gulf of Guinea and off the Horn of Africa, including Eritrea, Ethiopia and Somalia. “That’s the reason, I think, you are seeing China use that as an engagement tool of choice,” he said, referring to the coast guard. “In some cases, a coast guard agency appears to be less provocative than a naval force.” Allen said any nation that intentionally violated or ignored interna-

tional rulings on sovereignty claims would be taking a significant risk. “You’re begging the question of whether they’re challenging a global regime on how to govern the oceans,” Allen said. “That is not a very stable way of managing the oceans in the future, and any action that would be taken to contravene an international forum should be done very cautiously.”

Unprecedented complexity

Allen said one bright spot in international maritime relations was that countries were getting

China tops global supercomputer speed list for 7th year

EIJING—A Chinese supercomputer has topped a list of the world’s fastest computers for the seventh straight year— and for the first time the winner uses only Chinese-designed processors instead of US technology. The announcement on Monday is a new milestone for Chinese supercomputer development and a further erosion of past US dominance of the field. Last year’s Chinese winner in the TOP500 ranking maintained by researchers in the United States and Germany slipped to No. 2, followed by a computer at the US government’s Oak Ridge National Laboratory in Tennessee. Also this year, China displaced the US for the first time as the country with the most supercomputers in the top500. China had 167 systems and the United States

had 165. Japan was a distant No. 3 with 29 systems. Supercomputers are one of a series of technologies targeted by China’s ruling Communist Party for development and have received heavy financial support. Such systems are used for weather forecasting, designing nuclear weapons, analyzing oilfields and other specialized purposes. “Considering that just 10 years ago, China claimed a mere 28 systems on the list, with none ranked in the top 30, the nation has come further and faster than any other country in the history of supercomputing,” the TOP500 organizers said in a statement. This year’s champion is the Sunway TaihuLight at the National Supercomputing Center in Wuxi, west of Shanghai, according to TOP500. It was developed by

China’s National Research Center of Parallel Computer Engineering and Technology using entirely Chinese-designed processors. The TaihuLight is capable of 93 petaflops, or quadrillion calculations per second, according to TOP500. It is intended for use in engineering and research, including climate, weather, life sciences, advanced manufacturing and data analytics. Its top speed is about five times that of Oak Ridge’s Titan, which uses Cray, NVIDIA and Opteron technology. Other countries with computers in the top 10 were Japan, Switzerland, Germany and Saudi Arabia. The TaihuLight is due to be introduced on Tuesday at the International Supercomputing Conference in Frankfurt by the director of the Wuxi center, Guangwen Yang.

“As the first No. 1 system of China that is completely based on homegrown processors, the Sunway TaihuLight system demonstrates the significant progress that China has made in the domain of designing and manufacturing large-scale computation systems,” Yang was quoted as saying in the TOP500 statement. The TaihuLight uses Chinesedeveloped ShenWei processors, “ending any remaining speculation that China would have to rely on Western technology to compete effectively in the upper echelons of supercomputing,” TOP500 said in a statement. The second-fastest computer, the Tianhe-2 at the National Supercomputer Center in the southern city of Guangzhou, is capable of 33 petaflops. It uses chips made by Intel Corp. AP

Bello also placing bounties on illegal recruiters’ heads Continued from A1

a bounty of P5 million for every drug lord killed, a slightly lower reward of P4.99 million for every drug lord arrested; P2 million for a drug distributor killed and P50,000 for small-time peddlers. The bounties would come from his unsued campaign funds. Just like Duterte’s warning to drug dealers, Bello also warned illegal recruiters to stop their trade now “because we will kill their business.” He issued the warning as he

reiterated the Department of Labor and Employment’s (DOLE) thrust to stop contractualization as the main form of hiring of workers. Inorisa Elento, executive director of the Davao City-based Mindanao Migrants Center for Empowering Action, told the BusinessMirror she was elated by Bello’s announcement of cracking the whip against illegal recruitment “anchored on stopping human trafficking.” She added that the DOLE here has actually formed a Center Against

Illegal Recruitment after consulting with other organizations. “The DOLE even came out with a manual of operating procedures and primer. Unfortunately, it never took off. Instead, it passed on the thrust to the Interagency Council Against Trafficking,” she said. “I hope, that with the labor secretary, himself, announcing it, he would push its regional offices to really act on it as its own mandate,” she added. Elento said Bello should also look into similar functions already

assumed by agencies, such as the Philippine Overseas Employment Administration, which, she said, has the mandate against human trafficking abroad. “It would be better that the incoming administration would sew all these same functions of other government agencies,” she said. “And what about the incoming President’s announcement that he would create a Department of Overseas Filipino Workers? What would be its make up and its mandate?” she asked.

at better at cooperating when it came to disaster management in the face of unprecedented and growing complexities. “In my mind, there are two things that countries rarely argue about: search-and-rescue and oilspill response,” Allen said. Recent experiences of nations working together in response to disasters, he said, showed that such actions can take place independent of national security issues that may be going on. “Those things are generally not in question, that you want to do a job

if there is an event and you want to help each other, it becomes a basis for cooperation and engagement. It’s hard to do on the defense side.” The greater the level of information sharing, and the more intensive the efforts to build preexisting relationships, Allen said the more success nations would have in reducing risk from things, such as piracy, virus outbreaks, drug trafficking and illegal migration. “What we are starting to see are complex challenges that don’t have any precedent,” Allen said.

Dominguez: P-Noy failed in inclusive-growth tack Continued from A1

Such a coalition will benefit the majority of the Filipino people, especially the marginalized citizens of the country, he said. Dominguez also said the government and the private sector need to join hand to build inclusive growth for the country. “[We need] to change the way we do things as a nation. It is a patriotic call to start building a truly 21st century society, where citizens trust their institutions and consumers trust producers. It is a society of shared values where each one benefits from the excellence of the other,” Dominguez said. He said further, while the country enjoys a sound macroeconomic environment, poverty still needs to be addressed. He, likewise, said Filipinos did not vote for the new Chief Executive on the basis of good macroeconomic figures, but on the belief that change was forthcoming as promised by Duterte. “Our people did not vote for change on May 9 because the macroeconomic numbers are good. They voted for change because the good macroeconomic numbers did not translate into a good life for all,” Dominguez explained. He d id note D uter te w i l l cont inue t he macroeconomic policies the current administration has implemented since this helped sustain the countr y’s economic expansion.

“An environment that would be good for business, among others, [would be] leveling the playing field, carrying out investor-friendly initiatives, ridding the bureaucracy of graft and inertia and freeing government agencies from ‘regulatory capture,’” Dominguez noted. Dominguez also said the incoming administration will push forward with the challenging task of bureaucratic reforms. He, likewise, vowed to improve the ease of doing business in the country to encourage the entry of investors and the entrepreneurial set. He also talked of developing rural areas to help generate job opportunities as a priority area under Duterte. Ag r icu lture moder nization and the push for agribusinesses to generate higher value-added products and generate more jobs for those living in the countryside also rank high in the to-do list bared by Dominguez. “Our economy can move to a higher growth plane,” he said. “To achieve that, we need a bolder pump-priming plan that will initially involve allowing more headroom for deficit spending. Two decades of fiscal consolidation finds us with a manageable debt service level and investment grade ratings. “There is room for more audacious economic policy-making,” Dominguez added. Rea Cu