Businessmirror june 29, 2016

NEW E-CLASS Auto Nation Group President Felix R. Ang (right), together with (from left) Auto Nation Group Chairman Gregorio T. Yu, German Ambassador to the Philippines Thomas Ossowski and Daimler Southeast Asia CEO and President Wolfgang Huppenbauer, leads the unveiling in the Philippine market of Mercedes-Benz’s latest showcase of technological innovation— the new E-Class. This extremely elegant automobile is armed with the best in driving features and adorned with top-of-the-line accessories for optimum comfort and drive. It boasts of the latest technological advancements that will surely set the industry’s bar to a higher level. ALYSA SALEN

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A broader look at today’s business n

Wednesday, June 29, 2016 Vol. 11 No. 263

POOR URBAN PLANNING BLAMED FOR TRAFFIC CONGESTION

Metro streets need remodeling–Palafox

By Lorenz S. Marasigan & David Cagahastian

INSIDE

A

@davecaga

remodeling of Metro Manila’s streets and development of new growth areas through the grant of incentives to investors could be the best routes to take in solving the chronic state of traffic congestion that Metro Manila has been experiencing, experts said.

menarco builds healthiest office tower

property

@lorenzmarasigan

2.1M

The estimated number of vehicles registered in Metro Manila as of 2013 Architect and Urban Planner Felino A. Palafox Jr. believes that Metro Manila’s streets are too congested that the only way to ease the flow of goods and services is to remodel them.

He explained that there is a “bias for

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A dash of common humanity

Teddy Locsin Jr.

T

free fire

ASH Aw, renowned and best-selling writer, writes in The New York Times of elderly people working in food courts and hawker centers in, of all places, super-rich and super-socially progressive Singapore.

Singapore has had almost full employment since Independence. The retirement age is among the oldest. Its retirement benefits the most generous. And its young population prides itself as being Asian, or rather Confucian, in caring for the old. But here were their old people working at menial jobs.

In Tash Aw’s words, the elderly Singaporeans were “diligently tidying away trays, scraping leftovers into bins, and wiping tables and floors with disinfectant.” Tash asked the elderly workers why they work, calling them “Auntie” or “Uncle,” like my daughter calls cab drivers in the Lion City.

Continued on A11

See “Metro streets,” A2

E1

Street art as a tool for revitalizing built communities

KEY SEA-ROW EVIDENCE Asian Institute of Journalism and Communication Chairman and Now Corp. CEO Mel V. Velarde (right) presents the first official life-size replica of the famed 1734 Fr. Pedro Murillo-Velarde Map, known as the Carta Hydrograpica y Chorograpica de las Filipinas, to Northern Luzon Command Lt. Gen. Romeo Tanalgo. Story on A3.

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E2

new f.e.u. campus to rise in the south

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Tales of inaugurals past: By the numbers

By Fil V. Elefante

W

E2

@elefantefil

Conclusion

hen the numbers and events after the May 9 presidential elections are crunched together, we can see that President-elect Rodrigo R. Duterte scores a number of firsts.

Among the most obvious firsts involv ing t he incoming President is how his inauguration will be conducted.

PESO exchange rates n US 47.0730

Social media

The most notable first is how the Duterte administration is using social media for the Presidentelect’s inauguration.

“A not her h i stor ic e vent i n Duterte’s inauguration will be the live streaming of the gathering via the popular social-media platform Facebook,” according to a media advisory released by the Philippine Information Agency (PIA).

After meeting with Facebook Asia-

Pacific executives, incoming Communications Secretary Martin M. Andanar announced that Duterte’s inauguration marks a first for Asia.

“Duterte is poised to become the very first president in Asia whose inauguration will be broadcast by the world’s largest social network,” the PIA reported.

“We talked about how Facebook can help us technically in streaming the entire inauguration. We also Continued on A2

n japan 0.4616 n UK 62.2305 n HK 6.0656 n CHINA 7.0696 n singapore 34.5541 n australia 34.4669 n EU 51.9215 n SAUDI arabia 12.5612

Source: BSP (28 June 2016 )

A2 Wednesday, June 29, 2016

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Tales of inaugurals past: By the numbers Continued from A1

talked about how important this is for the Filipino people,” the PIA quoted Andanar as saying.

The PIA media advisory said that, aside from the live streaming, nine national broadcast companies will still cover the inauguration inside Malacañang. However, their news crews will only be allowed inside the Palace grounds of Gate 4.

“Other media members may monitor the event inside the New Executive Building press briefing room, where big screens will be provided,” the PIA media advisory said.

This development is expected to benefit millions of Filipinos abroad by giving them an opportunity to view Duterte’s inauguration through live streaming via Facebook.

Duterte also holds the distinction of being the most-discussed presidential candidate in Facebook during the campaign trail.

Separate inaugurations

This coming June 30 holds another first in the country’s history of Presidential inaugurations.

The day marks the first time the President-elect and Vice President-elect will hold separate inauguration rites.

Duterte’s inauguration will be held at the Rizal Hall of Malacañang, while Vice President-elect Maria Leonor G. Robredo’s inauguration will be held at the Quezon City Reception House.

Though the two will have separate inaugurations, there is a good chance that the tradition of having the Vice President-elect sworn into office first will be continued.

For this to happen, Robredo’s inauguration must start on schedule.

Based on details released during the last several days, Robredo’s inauguration will start at 9 a.m. and end at 10 a.m., while Duterte’s inauguration will start at10:30 a.m. and end at 3 p.m.

Traditionally, the Vice President-elect

Metro streets. . .

Continued from A1

automobiles” in the city that pedestrians are the ones given lesser priority when it comes to access to roads.

On a daily basis, there are about 500,000

is sworn into office first to maintain the line of succession to the presidency, in accordance with Article 7 of the Constitution.

Section 7 of the said article has three specific provisions on the crucial role the Vice President-elect plays at the beginning of a new administration.

One provision states that “if the President-elect fails to qualify, the Vice President-elect shall act as President, until the President-elect shall have qualified.”

The second provision calls on the Vice President-elect to act as President in the event a President shall have not been chosen. However, the Vice President-elect relinquishes the presidency once a President have been chosen and qualified.

The third provision involves a permanent transition for the Vice President-elect. This provision states that “if at the beginning of the term of the President, the Presidentelect shall have died or shall have become permanently disabled, the Vice Presidentelect shall become President.”

Supreme Court Associate Justice Bienvenido L. Reyes will administer the oath of office to Duterte, while Robredo will be sworn into office by two barangay captains, namely, Rolando Coner of Barangay Punta Tarawal, a village in the Third District of Camarines Sur; and Regina Celeste of Barangay Mariana in Quezon City.

Inaugural address

Presidents of the Philippines and Their Inaugural Addresses,” by J. Eduardo Malaya and Jonathan E. Malaya. This article can be found at the Presidential Museum and Library.

“The speeches of Carlos P. Garcia and Diosdado P. Macapagal described priority programs and specific projects,” the article explained.” In contrast, those of Ramon F. Magsaysay and Ferdinand E. Marcos, particularly the latter’s second inaugural, emphasized vision and larger purposes.”

For Duterte, the last several weeks after election day has been full of what he intends to do once he assumes the presidency.

Among them is a no-nonsense campaign against illegal drugs and corruption in government. According to one incoming Cabinet secretary, backroom deals are a thing from the past under the Duterte administration.

Duterte has also made known his intention to reinstate national programs on family planning as part of his administration’s efforts to reduce poverty.

“I will be harsh on drugs, and I will be strict on laws,” Duterte told Davao City government employees, when he bid them farewell. “Yet, I will use all resources of government for the hopeless, the helpless and the defenseless.”

The numbers

Even before Duterte takes his oath of office, much is expected from him, especially after the manner he won in the May 9 presidential elections.

The answer on how he will meet those expectations may be known in his inaugural address.

“Inaugural addresses usually project, as a theme, the philosophy or priorities of the incoming administration and, at times, inaugurate what the new leadership believes is a significant new chapter in the nation’s life,” according to an article, entitled “So Help Us God: The

Ba sed on the records compi led by the Presidential Museum and Library, Duterte won by a plurality of 38.6 percent under elections held, according to the 1987 Constitution.

This ranks him in fourth place, with Benigno Aquino III at first (42.08 percent), Gloria Macapagal-Arroyo at second (39.99 percent), and Joseph E. Estrada at third (39.86 percent).

Fidel V. Ramos won the presidency with the smallest plurality (23.58 percent).

Though Duterte may be fourth in terms of plurality among presidents, he scores a number of firsts on his own. Duterte

vehicles running along Edsa, the metropolis’ main highway, but Palafox suspects that double that number are cars traveling through the streets of Metro Manila.

The University of the Philippines said data from the Land Transportation Office (LTO) showed there were about 7,690,038 registered motor vehicles in the country

in 2013. Of the total, 868,148 are cars; 1,794,572 utility vehicles; 346,396 sportutility vehicles; 358,445 trucks; 31,665 buses; 4,250,667 motorcycles or tricycles; and 40,145 trailers. The LTO lists a total of 2,101,148 motor vehicles registered in Metro Manila, or 27 percent of the country’s total.

Clogged arteries

Car sales have been growing on a steady basis annually. Data from the Chamber of Automotive Manufacturers of the Philippines Inc. showed that car sales reached 72,871 in 2012, then ballooned to 102,209 units by 2013, doubled in 2014 and increased by another 30 percent last year to 288,609 units.

This led to too many vehicles on the streets, clogging the arteries of Metro Manila. “There is a need to redesign the streets and urban transport corridors of Metro Manila to accommodate more mass-transit and public transport, as most citizens use this,” Palafox said.

With this, he encouraged the government to pattern the plan to cities around the globe that promote biking and walking.

‘Walkable, bikeable’

“There are several best practices elsewhere in the world showing that making the streets walkable and bikeable does not only promote health, but actually lessens traffic congestion and increases land values,” Palafox added.

Aside from the growing number of vehicles in the Philippines, the culprit behind the everyday turmoil that commuters have to face on a daily basis is poor urban planning.

“Housing in the cities of Makati and Quezon has become too expensive for its laborers, pushing them to live as far as Laguna, Rizal and Bulacan,” he said.

Such long hours of travel time from home to work, he described, are “unbearable.”

‘Obsolete’

“A 10-kilometer ride becomes a twoto three-hour travel. Six hours of family time a day is robbed because of unbearable systemic traffic congestion,” Palafox lamented. “Quality education and health care are mostly incomparable by standards in Imperial Manila to other regions, except for a handful.”

He also said the urban-planning principles, land-use zoning and deed restriction that Metro Manila uses are “obsolete.”

“And I fear that cities in other regions

holds the distinction in Philippine history as the first person from Mindanao to win the presidency.

This is in stark contrast to the historical record, which showed 12 presidents coming from Luzon: Emilio F. Aguinaldo (Cavite), Manuel L. Quezon (Tayabas), Jose P. Laurel (Batangas), Elpidio R. Quirino (Ilocos Sur), Magsaysay (Zambales), Macapagal (Pampanga), Marcos (Ilocos Norte), Corazon C. Aquino (Tarlac), Ramos (Pangasinan), Estrada (San Juan, Metro Manila), Arroyo (Pampanga) and Aquino (Tarlac).

The Visayas region has produced three presidents, namely, Sergio S. Osmeña (Cebu), Manuel A. Roxas (Capiz) and Garcia (Bohol).

Duterte, who, at 71 years old, is the oldest person to be president, is also the first city mayor to win the highest public office in the land.

The files of the Presidential Museum and Library also showed that Duterte is the first city prosecutor to become president.

“He was special counsel for the City Prosecution Office of Davao City [19771979], Fourth Assistant City Prosecutor [1979-1981], Third Assistant City Prosecutor [1981- 1983] and Second Assistant City Prosecutor [1983-1986],” the records revealed. “He was, however, the third fiscal elected to the presidency. Quezon served as provincial fiscal of Mindoro in 1903 and provincial fiscal of Tayabas in 1904. Osmeña was provincial fiscal of Cebu from 1904 to 1905.”

The files also showed that Duterte and Robredo form the “first geographically balanced [North-South or Luzon-Visayas/ Mindanao] President and Vice President in the Fifth Republic.”

Duterte, who is from Davao City, represents the South, while Robredo, a native of Camarines Sur, represents the North.

The last geographically balanced pair was the Nacionalista Party ticket of Marcos (Ilocos Norte) and Fernando H. Lopez (Iloilo) in 1965.

Other trivia

are copying the urban laboratory of ‘how not to do it.’ Complaints get stuck with analysis-paralysis,” he said.

Incentives, discipline

New growth centers

This highlights the need for a more inclusive plan. It is imperative, he said, for the government to develop urban growth centers outside Manila, as centralized cities induce unsustainable in-land migration and city density, and unnecessary traffic congestion.

“The urban centers in the north, such as Clark, Pampanga; Zambales; and Bulacan, and in the South, such as Laguna, Batangas and Cavite, will act as counter magnets to the already congested Manila,” Palafox said.

The architect noted that the quickest way to do this is to give incentives to businesses in the said “counter-magnet” areas.

“One of the fastest ways to develop new growth centers is by establishing more special economic zones and tourism zone in nearby cities of Metro Manila. This will greatly encourage more investments outside Metro Manila, as lesser taxes will be charged,” he said.

Palafox added: “Of course, these zones will be rendered useless if people will not be able to access these sites. That is why it is important to extend and develop highspeed railway systems going to these areas.”

Leave the capital

“The idea is not to improve Metro Manila, but to convince people to locate outside of Metro Manila,” said Roque Magno, an engineer by profession and a professor at the University of the Philippines’s School of Urban and Regional Planning.

Magno recalled that, since the time of the late-President Ferdinand E. Marcos, many proposals from urban and regional planners were submitted to Malacañang to prevent a traffic gridlock. However, most of these proposals were left unheeded by the succeeding administrations, ultimately leading to the so-called carmageddon in the streets of Metro Manila in 2015.

The original plans involved enticing more businesses and investors to locate in Batangas province, where there is a seaport, to create a so-called Metro Batangas; and in Clark, Pampanga, where there is now an international airport, to create a “Metro Clark.”

“Now that the President-elect is from Davao, then they should develop Davao as the main city in Mindanao, while the other cities there could also be top destinations for investments. That goes hand in hand with the proposal to shift toward federalism,” Magno said.

The records reveal more trivia about the incoming President.

Duterte, a resident of Davao City, is the second nonresident of Metro Manila to be President.

“The first was Aguinaldo, who never resided in Provincia de Manila [Metro Manila area], having been occupied by the Americans since the early days of the American Colonial Period in 1898,” the files said. “All the other presidents actually lived in Metro Manila.”

He is the fourth president to have a March birthday (March 28.) The other three were Laurel (March 9), Ramos (March 18) and Aguinaldo (March 22).

“Two presidents were born in January: Roxas [January 1] and Mrs. Aquino [January 25]; one in February: Aquino III [February 8]; two in April: Arroyo [April 5] and Estrada [April 19]; two in August: Quezon [August 19] and Magsaysay [August 31]; three in September: Osmeña [September 9], Marcos [September 11] and Macapagal [September 28]; two in November: Garcia [November 4] and Quirino [November 16],” according to the Presidential Museum and Library.

He is the fifth President that the Ateneo school system has produced. The other Presidents who studied in Ateneo were Ramos (Master in Business Administration, 1980); Estrada (Ateneo de Manila High School, attended until 1953); Arroyo (Master of Arts in Economics, 1978); and Aquino III (Bachelor of Arts in Economics, 1981). Duterte attended the Ateneo de Davao University High School.

Duterte is the sixth President who does not smoke. “The other nonsmoking Presidents were Osmeña, Quirino, Magsaysay, Marcos and Mrs. Aquino,” said an article published by the Presidential Museum and Library. “Presidents Quezon, Roxas, Garcia, Estrada and Aquino were public smokers, while Presidents Aguinaldo, Laurel, Ramos, Macapagal and Arroyo were occasional smokers.” With Manuel T. Cayon

To entice investors to locate outside Metro Manila, investments in infrastructure, both from the public and private sectors, are needed. According to incoming Budget Secretary Benjamin E. Diokno, the Duterte administration plans to spend an amount equivalent to at least 7 percent of GDP annually for infrastructure projects.

But Magno said that, even before the Duterte administration gets preoccupied with infrastructure, one of the easiest ways to ease traffic immediately is to instill discipline among the citizenry.

He said the barangays should take the lead in enforcing discipline in their respective jurisdictions—clearing sidewalks of vendors, removing unserviceable vehicles parked on the streets and enforcing traffic rules.

“Discipline will go a long way in helping our country, not only in solving traffic but also in the fight against crime, corruption and drugs. It is a long-term solution, and not a single centavo is needed for this,” he said.

Losses from congestion

Metro Manila loses roughly P2.4 billion in traffic daily, estimates from the Japan International Cooperation Agency (Jica) showed. This is expected to balloon to P6 billion by 2030. To avert this, the Aquino administration adopted the Jica’s Roadmap for Transport Infrastructure Development for Metro Manila and its Surrounding Areas, otherwise known as the Dream Plan.

The P4.67-trillion road map calls for the establishment of a modern, well-integrated, coordinated and affordable transport system for Metro Manila and the adjacent areas of Bulacan, Pampanga, Cavite and Batangas.

The system will consist of expressways, new roads elevated and on ground, railways elevated and on ground, subways, airports and seaports. Near-term components are for completion by 2016, while medium- and longer-term components are for completion by 2020 and 2030, respectively.

When completed, the plan will accomplish at least three objectives: the reduction of traffic congestion in the metropolitan area; the diminution of air pollution in the metropolitan area and its environs; and the reduction of transportation costs to the urban population, especially the poor and other low-income groups. At the level of the individual, completion will result in the reduction of the average travel fare of commuters from the current P42 to P24, and also the lowering of the current average travel time of 80 minutes to 31 minutes.

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Wednesday, June 29, 2016 A3

Mitsubishi Motors eyes Montero regaining No.1 position by 2017 O

By Dennis D. Estopace

@DennisEstopace

KAZAKI, Japan—Mitsubishi Motors Philippines Corp.

(MMPC) eyes regaining the top position in sales of its Montero model as the company addresses the sudden unintended acceleration (SUA) issue.

MMPC First Vice President Yosuke Nishi said they initially targeted to sell 2,000 units a month of the new Montero.

Nishi told reporters on the platform of a Shinkansen train from Tokyo that MMPC sold about 1,500 units a month since launching the 2.4-liter engine Montero in January.

Including the sale of the old Montero, the company sold a total of 5,600 units as of end-May. Sales of the new Montero, which sells for P1.5 million, hit 3,400 as of end-May. Nishi admitted the SUA issue did affect sales of the Montero, which was a best seller for five

3,400 The number of Mitsubishi Montero units sold as of end-May

years since 2009.

“Next year we want to be No. 1 again,” he said, adding that MMPC expects to meet sales target by August.

Sales usually hit the high point of the curve after the launch of a model, then declines and maintains a regularity, Nishi said.

Nishi added that global sales of

the Montero is 400,000 accumulated. Out of the global total, Mitsubishi Motors Corp. (MMC) only observed four to five SUA cases.

“In all cases, we have determined the cause of SUA. In the Philippines we can’t determine the cause that is why we got a third party,” Kato said.

The first Montero that Mitsubishi sold in the market was in 2008.

MMPC parent MMC wants to move on from the SUA issue in the Philippines, as MMC undertakes a “production pivot” to Asean.

“It’s a matter we want to see a resolution to as soon as possible, so we can move on with our growth plans for the Philippines,” MMC Executive Vice President Kozo Shiraji told the BusinessMirror in a chance interview.

Shiraji, who has been MMC’s EVP for overseas operations and global after sales for only three months, said on June 27 in Tokyo that MMC is also interested to know why the SUA issue with the Mitsubishi Montero model was only reported in the Philippines.

“We are very concerned because the issue involves our customers who we value very much,” Shiraji told the BusinessMirror, after a

30,000 Meralco prepaid meters ready for installation this year

By Lenie Lectura

@llectura

T

HE Manila Electric Co. (Meralco) will rollout within the year 30,000 more prepaid meters, following an approval secured from the Energy Regulatory Commission (ERC) for the installation of an additional 100,000 smart meters.

“Next is 30,000 by year-end, on top of the 40,000 that’s been approved initially,” Meralco Senior Vice President Alfredo Panlilio said in an interview.

The smart meters are part of the utility firm’s Prepaid Retail Electricity Service (PRES), which enables customers to monitor their electricity consumption, balance, credit-purchase history and account information.

Panlilio said those who subscribed to Meralco’s PRES have experienced savings in their power

consumption compared to postpaid service. “They are able to save about 18 percent,” the Meralco official said.

Meralco has, so far, installed some 27,000 prepaid meters as of last month out of the 40,000 units that were initially approved for rollout by the ERC. Apart from the 40,000 approved meters, Meralco applied in March 2015 for an additional 100,000 smart meters. This was recently approved by the regulators as part of the utility firm’s application for regulatory year 2016 capital expenditure, which covers the July 1, 2015,-to-June 30, 2016 period. “ The approved is 105,000 smart meters.

Most of it will be prepaid, but we will be testing 5,000 meters for postpaid,” Panlilio said.

The additional prepaid meters will be installed in major cities in

Metro Manila. “The prepaid-focus will be in Manila, Mandaluyong, Pasig, Makati and few land developers, such as Robinsons Land, SMDC, 8990 and Vista Land,” the Meralco official said.

Meralco continues to persuade property developers to utilize prepaid-electricity meters in their housing projects.

The 8990 Holdings Inc. already tapped Meralco’s PRES for its project sites.

Both firms have entered into a memorandum of agreement (MOA) for the implementation of PRES in 8990 Holdings’s property developments, starting with Bella Vista, which is under its Deca Homes brand.

Bella Vista is the first private subdivision enrolled in PRES, providing its homeowners a more flexible, convenient and budgetfriendly option that fits a modern family lifestyle.

1734 PHL map turned over to Nolcom

C

amp Aquino, Tarlac City— Asian Institute of Journalism and Communication Chairman and NOW Corp. CEO Mel V. Velarde has turned over the first official life-size replica of the famed 1734 Fr. Pedro Murillo-Velarde Map to Northern Luzon Command’s (Nolcom) Lt. Gen. Romeo Tanalgo.

The map’s official name is “Carta Hydrograpica y Chorograpica de las Filipinas.” One of its unique features, aside from its accuracy in the topography of the Philippine islands, is it shows the disputed Scarborough Shoal, also known as Bajo de Masinloc, as a part of the Philippine territory.

“Little did we know that almost 300 years later, those rocks that were drawn on this to specifically guide Spanish ships from sinking, will now be significant and crucial to the destiny of this nation,” Velarde emphasizes on the map’s role it played as an evidence to the Philippines’s claim on the islands at the United Nations Convention on the Law of the Sea (Unclos). “From the utterances of the United States and G7 [Group-of-Seven] nations, and from the utterances of China, itself, it seems that the result would be, most

likely, favorable to us.”

Velarde further explained the importance of giving a replica of the map to Nolcom: “The Northern Luzon Command is the protector, watcher, caretaker and defender of our northern territory, where Bajo de Masinloc is under its jurisdiction. This is our own way of helping you, helping the nation and to recognize the proud members of Nolcom—sometimes we sleep without really knowing who are the people always ready to die for us.”

“Why are we fighting for those rocks? Those rocks represent what this nation is all about,” Velarde passionately expressed his thoughts to the members of Nolcom, “that we, as one nation are indivisible, that our territory is sacred to us, that when our patriarchs were fighting for this country, they were not just fighting for one territory alone. They fought for a nation, which was still a seed in their minds that blossomed into a nation that is today called Filipinas.”

“If that rock falls in someone else’s hands permanently, then we would be in proximity to something antithetical to our beliefs as a people,” Velarde explains further, “that our freedom is universal and we cannot ac-

cept the loss of freedom—something our forefathers so bloodily fought for, and we are still willing to fight for.

Like with Tibet and Mongolia, getting closer to us is a hungry giant, which is why we need to defend our state of being. Unlike this giant neighbor, we Filipinos “believe in freedom and liberty, where the acts of governments must be subject to the consent of the governed—always!”

“Patriotism can take many forms,” Tanalgo said, “In the case of Mr. Velarde, the exhibited act of patriotism is unique and unmatched. Ensuring that the map landed on the hands of the Filipino people, he shelled out his personal wealth and simply bought it.

He bought it for our country to rekindle the sense of patriotism among our people—to promote our sovereignty and support national interest in the West Philippine Sea.” “I pray that this map serves as a point of existential value for all Filipinos, regardless of provincial descent, tribe, belief, religion and social stature. Sir, you spent wealth for this map,” Tanalgo told Velarde.

“You pay our soldiers with your taxes, and we will repay you with our blood and commitment.”

news briefing by MMC Chairman and CEO Osama Masuko.

In that briefing at the company’s headquarters, Masuko told reporters the SUA issue led to losses in sales.

“More than that, the trust in brand image was damaged,” Ma-

suko said. “To recover that trust, we will take one step at a time.”

One of the steps the company took is tapping British firm Horiba Mira to conduct an independent investigation into consumer reports involving the automatic model of the sport-utility vehicle.

MMPC President Yoshiaki Kato said about 200 cases of SUA were filed in the Department of Trade and Industry (DTI).

Half of those cases, MMPC settled through either repairing or buying back the vehicle, Kato said.

IN this file photo, Mitsubishi Motors Philippines Corp. officially unveiled the all-new Montero Sport at the World Trade Center in Pasay City. After seven years, this best- selling midsize sport-utility vehicle (SUV) finally gets a full redesign, and now boasts of even better performance, comfort and safety features. The vehicle first debuted in Thailand in August 2015. The Philippines is the fourth country to release the SUV in four variants, namely, the GT 4 Wheel Drive eight-speed automatic transmission, GLS 4WD six-speed manual transmission, GLS 2 Wheel Drive Premium eight- speed AT and the base model GLS 2WD eight-speed AT. ROY DOMINGO

AseanWednesday BusinessMirror

A4 Wednesday, June 29, 2016 • Editor: Max V. de Leon

news@businessmirror.com.ph

Drought in Vietnam holds back growth

E

conomic growth in Vietnam was little changed in the second quarter, as a crippling drought hurt farming output and demand for exports weakened.

Gross domestic product rose 5.6 percent from a year earlier after expanding 5.5 percent in the previous three months, the General Statistics Office said in a statement in Hanoi on Tuesday. The economy expanded 5.52 percent in the first half of the year, lower than the 5.8-percent median estimate of four economists in a Bloomberg News survey.

As the world’s biggest producer of robusta coffee and a major exporter of rice, the worst drought in three decades is weighing on Vietnam’s economy this year. The longer-term outlook remains good, though, as the nation benefits from a manufacturing industry that’s grown in importance over the years after companies, such as Samsung Electronics Co., set up plants there to export smartphones.

“We are still optimistic,” said Long Ngo, a research manager at Viet Capital Securities JSC in Ho Chi Minh City. “Given all the challenges that we are facing now, like the sell-off in the emerging markets, export markets are slowing down and the zero growth in agricultural production, Vietnam is still doing quite well. We are still outperforming other countries in the region.”

Agriculture output dropped 0.8 percent in the first six months of the year compared with the same period in 2015, the statistics office said. That was offset by a 10-percent jump in manufacturing and strong growth in construction and services.

“We expect growth to be buoyed in the second half on higher manufacturing output, as the government is trying to help companies with more lending and steps to boost demand,” Nguyen Bich Lam, head of the statistics office, told reporters

5.52% Vietnam’s economic expansion in the first half

in Hanoi. The economy needs to expand 7.6 percent in the second half in order to meet the government’s target of 6.7-percent expansion this year, he said. The central bank last month delayed tightening its lending rules to help spur investment in the economy. The International Monetary Fund is forecasting growth of about 6 percent this year “reflecting the adverse agriculture shock, lower external demand and spillovers of tighter global financial conditions,” it said in a statement on Monday.

Growth in exports slowed to 3.3 percent in June from 4.9 percent in the previous month, official data shows. Rice shipments in the world’s third-largest exporter of the grain is down 6.8 percent in the first half of the year compared to the same period in 2015, according to the statistics office.

“Despite the slowdown, growth of 5.5 percent still makes Vietnam one of the top-performing economies in the region,” Gareth Leather, senior Asia economist at London-based Capital Economics Ltd., said in an e-mailed note to clients. “We think the prospects remain bright. Once weather patterns return to normal, agricultural output should start to recover.” Bloomberg News

Thai leader won’t resign even if referendum rejects charter

INT’L YOGA DAY

In this Sunday photo, people demonstrate a yoga pose in an indoor stadium in Hanoi, Vietnam. About 1,000 yoga practitioners participated in the mass practice to celebrate the annual International Yoga Day. AP

Indonesia approves tax amnesty to fund widening budget gap 53T rupiah I ndonesia’s parliament approved a tax amnesty that the government says will draw in billions of dollars needed to finance a widening budget as it steps up infrastructure spending to spur economic growth.

Lawmakers voted in favor of the bill during a plenary session in Jakarta on Tuesday, among the final steps before it becomes law. Individuals who repatriate undeclared assets held abroad will face a penalty of 2 percent to 5 percent, according to the bill.

President Joko Widodo is facing a revenue squeeze in the face of weaker commodity prices and slower growth in Southeast Asia’s biggest economy.

To keep the budget deficit under 3 percent of gross domestic product, Widodo is banking on the tax amnesty to help plug the shortfall.

The central bank forecasts the tax plan will help draw 560 trillion rupiah ($41.8 billion) of funds back

The estimated revenue to be derived from the tax amnesty to the country and earn the government 53 trillion rupiah of revenue that may add 0.3 percentage point to economic growth.

“To keep this year’s budget deficit below 3 percent of GDP, the government needs to cut spending and/or increase revenue collection,” economists at DBS Group Holdings Ltd. in Singapore said in an e-mail before the plan was approved. “A lot of hopes are on the tax-amnesty law.”

DBS estimates that the budget deficit for January to April stands at 158 trillion rupiah, more than

double the amount recorded in the same period last year.

Indonesia’s rupiah and equities gained after the decision. The currency strengthened 1.2 percent to 13,180 a dollar, the highest level since May 3, according to prices from local banks. Jakarta Composite Index of shares rose 0.8 percent, set for the steepest gain since June 7.

The amnesty bill sets a penalty of 4 percent to 10 percent on individuals who report assets held abroad but decline to repatriate the funds.

Participants must keep the funds onshore for three years.

“The finance ministry needs to ensure high participation is met by systems and human resources ready to process the claims, then make sure the revenue is quickly spent to support growth,” David Sumual, chief economist at PT Bank Central Asia, said before the plan was approved.

The tax amnesty was seen as a

test of political support for Widodo.

His administration earned a majority in parliament when Golkar, the second-largest party, left the opposition to formally support him in May. A majority of parties at the finance commission agreed to approve the bill, while adding lengthy disclaimers to their decisions.

“Empirically, the success rate is minimal and countries that do this are seeking to plug shortfalls,” Kardaya Warnika, lawmaker for Gerindra party, which stands in opposition to Widodo’s government, said at the commission meeting on Monday. “If the country isn’t in a revenue crisis, then Gerindra would reject this bill, but because the country is in a crisis, then Gerindra accepts.”

Lawmakers also approved revisions to the 2016 budget, including setting the GDP growth forecast for this year at 5.2 percent and the fiscal deficit at 2.35 percent of GDP. Bloomberg News

PHL must set tone after South China Sea decision

T Chan-ocha

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he head of Thailand’s military government said on Monday he will not step down if an August referendum fails to approve a draft constitution it is promoting.

Prime Minister Prayuth Chanocha was responding to a reporter’s question of whether he would emulate Britain’s David Cameron, who announced he would resign by October after UK voters in June 23’s Brexit referendum rejected his position endorsing staying in the European Union.

Leaders of Thailand’s Pheu Thai party, whose government was deposed by a military coup led by Prayuth in May 2014, had suggested he follow Cameron’s example and resign if the draft constitution does not pass in the August 7 vote. The party opposes the draft as undemocratic.

Prayuth said he had no intention of leaving, because Britain did not have the same problems as Thailand—a reference to the political disorder and violence in the South-

east Asian country over the past decade—and because, unlike Cameron, he did not come to office by election.

“It’s a different story,” Prayuth said. “Why, do you want me to leave or what? I’m not leaving. I’m the one who sets the rules. He didn’t come to power like me. Their country doesn’t have the same problems as ours.”

The government has tough rules limiting campaigning for either a yes or no vote on the draft charter, but is inconsistent in interpreting and enforcing them. Violators could be subject to a 10-year prison term.

While technically even-handed, the restrictions are obviously aimed at opponents of the draft.

Students opposed to charter were arrested last week for attempting to hand out leaflets urging a ‘no’ vote, while the government has said it is considering what to do about supporters and opponents of the charter who have recently used Facebook Live broadcasts to express their opinions. AP

he Philippines should stand firm on its position once the Permanent Court of Arbitration issues a favorable ruling on its claim over its territory in South China Sea (West Philippine Sea), according to a private think tank.

“The Philippines should immediately set the tone of what is to follow,” Stratbase ADR Institute President Dindo Manhit said at a recent forum on the Enhanced Defense Cooperation Agreement (Edca) organized by the think tank.

“In the days ahead, the country should continue to advocate that all states, including China, must abide by the terms of the ruling and that all claimants should avoid any activity that could worsen tensions in the region,” Manhit said.

Manhit said the incoming Duterte administration could pursue its claim in the South China Sea while still improving the country’s economic partnership with Beijing, as the two are not mutually exclusive.

“Developing a credible defense posture in the region should be seen as a complement to the strategic deterrence provided by the US and partnerships with Japan and Australia,” he said.

Australian Strategic Policy Institute senior analyst Lisay Sharland said the Edca underscores not only American involvement in the region, but is also a reminder of the value of other partnerships for the Philippines.

“Australia and the Philippines will work together in regional platforms to develop architecture supportive of security stability and cooperation and to provide confidence-building measures to minimize the risk of conflict in the

Chinese State Councilor Yang Jiechi (left) shakes hands with Vietnamese Foreign Minister Pham Binh Minh at the start of a bilateral conference in Hanoi, Vietnam on Monday. Yang is on a two-day visit to Vietnam to try to promote cooperation amid growing tension over Chinese growing assertiveness in the South China Sea. AP

region,” she said. The decision is expected to be a test for the Duterte administration, not only on the international rule of law but also on diplomacy and communication. “How China and the Philippines react to that decision will have an impact on regional security dynamics,” Sharland said.

Prof. Katsuyuki Yakushiji of Toyo University

said the Japanese government shares its official stand with the governments of the Philippines, the US and South Korea.

“Any intimidating concept or provocative unilateral action that could alter the status quo, increase tension and disrupt freedom of navigation and overflight should be condemned,” he said.

A BusinessMirror

real-estate Special Feature www.businessmirror.com.ph | Wednesday, June 29, 2016 A5

Philippine Real Estate bullish

expected to reach $39 billion by 2020

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apidly growing remittances from overseas Filipino workers; a rapid shift from offline real-estate purchase to online portals; a surging IT-BPO sector leading to a huge demand for office spaces; and rapid employment generation is escalating the demand for the real-estate market in the Philippines, according to the market research and information-service provider Ken Research Pvt. Ltd.

The Philippine real-estate market has been penetrated with high competition arising from a large number of real-estate developers in the market.

The major real-estate players in the market include Ayala Land Inc, SM Prime Holdings, Megaworld Corp. and

Robinson Corp. The revenues of the industry have grown at a calculate compound annual growth of 17 percent, from 2010 to 2015.

According to the research, The Philippines’s Real Estate Market Outlook to 2020—Driven by Rapid Growth

of BPO Sector and Increased Demand of Retail and Commercial Properties, reported in May, the revenues from the Philippine real-estate market is anticipated to post revenues to $39 billion by 2020 due to rapid expansion in the real-estate construction projects and increasing urbanization. The demand is also expected to rise due to a growth in the number of BPO and other multinational companies.

“In the current scenario, it is highly important for real-estate developers to meet the growing demand for real-estate properties in [the] Philippines. It is important to solve the problem of housing backlog in the market, and, for the government, boost infrastructure spending and provide incentives to real-estate developers, so they shift their focus toward socialized housing,” according to Ken Research.

Ken Research published on its latest report a comprehensive analysis of the real-estate industry in the Philippines. The report covers various aspects, such as market size of real estate in the Philippines, seg-

mentation on the basis of types of sectors, sales and rental market, online real-estate market, real estatebrokerage market, financing market

and market share of major players in the Philippine real-estate industry.

The report is useful for industry consultants, facility-management com-

panies, business owners, real-estate managers, and for advisors and new players venturing in the market.

www.ibcworldnews.com

8990 Holdings among the top 10 of BCI Asia Developer Awards

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ass-housing developer 8990 Holdings Inc. has been awarded as one of the country's top 10 developers by the BCI Asia Philippine Awards.

8990 is the only mass-housing developer in the top 10 of the award-giving body, placing it side by side with the country's top realestate developers.

The top 10 Philippine developers were picked based on their greatest aggregate value of projects, under construction at the last full calendar, weighted by the extent of its sustainability and confirmed green-building ratings, according to BCI Asia.

8990, the country,s largest mass-housing developer in the country in terms of number of units built, has been developing housing projects in high-growth areas across Luzon, the Visayas and Mindanao since 2003.

The company,s overall business strategy is to deliver speed and quality, such as a Deca Homes house-and-lot unit, or an Urban Deca Homes medium-rise building unit to its target customers.

Its main clients are working individuals that can afford a monthly amortization payment, from P2,800 to P10,000.

The company intends to further grow its existing mass-housing revenue base by increasing the number and variety of products in the cities, which has current developments.

Most of the company,s developments are outside Metro Manila, but the company said it will replicate its success in the provinces by bringing its projects to the country,s main center of business activity.

8990 President and CEO Januario Jesus Gregorio B. Atencio III said the company is currently in the

process of identifying sites for projects, targeting Metro Manila commuters.

Its current Metro Manila project include a complex of high-rise residential buildings in Tondo, Manila, and another in Ortigas, Pasig City. Both projects include a small shopping mall, in which 8990 itself will operate. It also has a standalone condominium project in Mandaluyong City and another in Cubao, Quezon City.

“We are actually trying to find the way, if we can grow our revenues at 100 percent in 2017 [from this year]. We are looking very hard, studying it very hard, how we can double [our revenues],” Atencio said.

Atencio explained the company,s revenues is growing at a pace of about 20 percent annually, since it became public in 2014.

For this year it is targeting 24-percent increase in revenues to P12 billion, from last year,s P9.65 billion. At that pace of growth, the company,s revenues will increase to P14 billion by 2017, but Atencio said the amount is only being produced by its provincial projects.

“We are promoting increased home ownership in the mass-housing segment, in part by continuing to develop financing products tailored to the specific needs, requirements and financial situation of our customers,” Atencio said.

The BCI Asia Awards is now on its 12th year and is being held in seven Asian regions, including Hong Kong, Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines. Beyond recognizing

Accepting the 8990 Holdings award is Gerald de Guzman, general manager for Luzon.

Deca Clark Resort and Residences in Angeles, Pampanga

developers and architecture firms in these countries, the BCI Asia Awards aims to encourage the creation of so-

cially responsible architecture.

It remains as one of the most coveted awards in the regional

DECA Homes Talisay

building industry, while serving as a platform for domestic and international networking, among

elite architecture firms, property developers, manufacturers and service providers.

The W

Business

A6 Wednesday, June 29, 2016 • Editor: Lyn Resurreccion

EU lawmakers to press UK for quick exit ahead of talks

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RUSSELS—European Union (EU) lawmakers are meeting in emergency session to discuss the United Kingdom’s unprecedented vote to leave the EU, set to call for Britain to trigger the exit process immediately.

A nonbinding draft resolution drawn up for Tuesday’s session said the process should be launched once Prime Minister David Cameron notifies the outcome of the British referendum to EU leaders.

Cameron is to share his views about the referendum and perhaps Britain’s future at a summit in Brussels on Tuesday afternoon.

He has sig na led that Br itain might not tr ig ger the exit clause, know n as A r ticle 50, until October.

EU nations acknowledge the political chaos in the UK, but they want Article 50 triggered as soon as possible to calm markets and reassure European citizens.

Meanwhile, in London, the impact of Britain’s vote to leave the EU was swift and painful for many small businesses in London.

Ed Bussey, the founder and CEO of a small tech firm in London called Quill, an online content

company, had been looking to fill a software-development job paying £70,000 ($95,000) a year that’s been open for six months.

He had a job interview set up with a promising candidate from EU member Italy on Friday—the day after the vote.

“Because of what had happened on Thursday, he was not prepared to up sticks and move to London,” Bussey said with chagrin. “He was saying: ‘Look, I’m not sure I’m not going to get booted out in two years.’”

Businesses in Britain already are seeing the impact of the seismic vote to have the countr y leave the other 27 nations in the trading bloc and str ike out o n it s o w n . C o mp a n ie s large and sma l l are feeling the shockwave that left Br itain in unchar ted waters, unclear of what the f uture w il l hold.

Being part of the EU guarantees

no tariffs on trade on goods and services and the free movement of workers, without the hassle of visas or work permits. Now that it is leaving, Britain will have to first negotiate its exit, which could take years, and then renegotiate new relations with Europe, which could take even longer.

With so much uncertaint y looming for so long and financial markets crashing, a lot of business is suddenly in limbo. Some companies are even looking to pull back.

In the first direct reflection of the uncertainty hitting business confidence, a leading business group said 20 percent of its members plan to move some of their operations outside of the UK to be closer to clients on the mainland.

The Institute of Directors (IOD) said on Monday a survey of its 1,000 members showed three out of four believe Britain’s exit from the EU, known as Brexit, will be bad for business. About a quarter said they would freeze hiring and 5 percent said they would cut jobs.

“Ultimately, we think our members are very resilient. We think British business is tough and will adapt, but certainly at the moment, there is a lot of nervousness out there in the business community,” IOD Spokesman Edwin Morgan told The Associated Press.

Companies are already issuing profit warnings. Real-estate

agency Foxtons said it is no longer confident that business will improve in the second half of the year as it had expected before the vote. The parent company of British Airways, IAG, warned on Friday that profits would take a hit this year, as did budget airline easyJet, saying it anticipates economic and consumer uncertainty this summer.

Multinationals that have chosen the UK as a base for operations across the EU are expected to reconsider some of their operations in Britain. Global banks, like JPMorgan, Goldman Sachs and HSBC, have said thousands could move to the mainland. So worrisome is the overall picture that Treasury chief George Osborne offered a statement before markets even opened in hopes of calming the jittery nerves. Success on that score was decidedly mixed.

The pound hit a new 31-year record-low, dropping another 3.6 percent to $1.3187. Stock markets also declined across Europe. Bank shares were particularly hard hit, as they are considered a mirror on the larger economy. Shares in Royal Bank of Scotland, once the world’s largest bank and now mostly state-owned, fell some 15 percent. Adding to Friday’s losses, that alone has cost the UK taxpayer some £7.3 billion ($9.6 billion) in two days. AP

US court decision complicates prosecution of elected leaders

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ASHINGTON—A Supreme Court opinion setting aside the bribery conviction of former Virginia Gov. Bob McDonnell will make it harder for Justice Department prosecutors to bring similar cases in the future and brings welcome news to other elected officials investigated for or charged with corruption, legal experts say.

The court unanimously held on Monday the actions McDonnell took to benefit a businessman who gave him luxury gifts may have been distasteful but did not cross the line into illegal conduct.

The decision clarifying the boundaries between illegal conduc t and what’s merely unseemly could be used by elected officials to argue that they have broader leeway in what’s permissible.

And it means that prosecutors will have to think twice before charging elected officials simply for arranging access for a friendly benefactor.

“There is no question that this decision will result in a review of the theories that the Justice Department is using in open prosecutions as well as ongoing investigations,” said Jacob Frenkel, a whitecollar defense lawyer in Washington and former prosecutor. He predicted that, in ongoing prosecutions, defense lawyers will seek to get charges dismissed because of Monday’s decision.

At issue in the case is a federal bribery law that makes it illegal for a public official to agree to take “official action” in exchange for money, gifts and other things of value. The Justice Department has adopted an expansive view of what constitutes an official act, and in this case prosecutors accused McDonnell of hosting a governor’s-mansion event for businessman Jonnie Williams and of setting up a meeting for Williams with the

state health secretary—all in exchange for than $165,000 in gifts and loans.

But the Supreme Court reined in what it called the government’s “boundless interpretation,” saying routine political courtesies, such as hosting events for constituents or arranging meetings, are explicitly not illegal.

“This decision just made prosecution of elected officials exponentially more difficult,” defense attorney Mark Schamel said.

Each prosecution involves different facts and allegations, making it impossible to say how broad the impact will be. But the opinion had been eagerly anticipated by prosecutors, judges and defendants, and its potential ripple effects have already been acknowledged in courts.

Federal judges in New York last month told two legislative leaders convicted of corruption, Sheldon Silver and Dean Skelos, that they could wait until after the McDonnell case had been decided to report to prison.

Prosecutors there said they were reviewing the opinion but remained confident that their cases won’t be affected.

Among other defendants likely to seize on the opinion is Sen. Robert Menendez, D-NJ, who is awaiting trial on charges that he accepted bribes from a wealthy Florida eye doctor, Salomon Melgen, in exchange for legislative favors. A critical element of the indictment is a meeting between Menendez and Kathleen Sebelius, then the secretary of Health and Human Services, at which prosecutors say he advocated for Melgen’s interests.

The McDonnell opinion may bolster Menendez’s argument that the meeting was precisely the type of advocacy that the public expects of its leaders, and may help his assertion that as a legislator, he had no direct ability to influence an executive branch decision. AP

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www.businessmirror.com.ph | Wednesday, June 29, 2016

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First made-in-China jetliner makes two-hour debut commercial flight

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HANGHAI—The first regional jet produced in China’s initiative to compete in the commercialaircraft market made its debut flight on Tuesday carrying 70 passengers.

IN this photo released by China’s Xinhua News Agency, people in panda costumes pose in front of a Chengdu Airlines ARJ21-700 plane before its first commercial flight at Chengdu Shuangliu International Airport in Chengdu in southwestern China’s Sichuan Province on Tuesday. The ARJ21-700, made by the Commercial Aircraft Corp. of China Ltd., is China’s first homegrown regional airliner and can seat 78 to 90 passengers depending on its configuration. DING TING/XINHUA VIA AP

The ARJ21-700 jet is one of a series of initiatives launched by the ruling Communist Party to transform China from the world’s low-cost factory into a creator of profitable technology in aviation, clean energy and other fields.

The plane, operated by Chengdu Airlines, took its passengers from the western city of Chengdu to Shanghai in two hours.

China is one of the biggest aviation markets, but relies on foreignmade aircraft. Beijing wants to capture more of those sales.

Its major airlines are stateowned, which gives the ruling party a captive pool of potential customers that can be ordered to buy Chinese-made aircraft. The ARJ21—or Asian Regional Jet for the 21st Century—is intended to make its state-owned manufacturer, Commercial Aircraft Corp.

of China Ltd. (Comac), a competitor to Bombardier Inc. of Canada and Brazil’s Embraer SA. “ T he f irst f l ight of t he A R J21 marks the beg inning of commercia l, or passenger, operations for the AR J21 and signifies the first time a domestically made regional jet has been used by a Chinese airline,” Comac Chairman Jin Zhuanglong said. T he A R J21 initiative was launched in 2002. It was schedu led to deliver its first plane in 2007, but that was pushed back due to technical problems.

A full-size jetliner underdevelopment by another state-owned company, the C919, is aimed at competing with Boeing Co. and Airbus. After delays blamed on manufacturing problems, the C919 is due to fly this year and enter service in about 2019. AP

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The World BusinessMirror

Wednesday, June 29, 2016

Draghi seeks ‘shared diagnosis’ of what ails global economy S

www.businessmirror.com.ph

California land regulators to weigh end of nuclear power

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INTRA, Portugal—European Central Bank (ECB) President Mario Draghi is calling for world leaders to agree on what ails the global economy and take more concrete action to promote growth and jobs.

Draghi said in a speech on Tuesday at an ECB conference the current slow-growth world of high savings, low investment, and weaker productivity could be tackled with progrowth policies, such as more public spending.

He said the key is a “shared diagnosis” and “alignment” rather than formal coordination.

Countries might take different actions, but “the sign of the effect on global growth needs to be positive,” he said.

Central banks, including the ECB, Bank of England, Bank of Japan, and the US Federal Reserve (the Fed) have carried out massive stimulus efforts involving very low or negative interest rates and printing money to increase credit and growth. Central bankers have complained that governments have left too much of the burden to them.

Draghi said the outcome of the Group-of-20 (G-20) nations’ previous commitment to raise growth by 2 percent through reforms had been “a disappointment.” In 2014, the G-20, representing most of the world’s economy, agreed on paper to raise growth through

structural reforms, a broad term that can include many ways of improving the environment for businesses. They can include cutting red tape, reducing bureaucratic delays and approvals, and easing regulations and making hiring and firing easier.

Draghi said divergence among the monetary policies of central banks—with, for example, the Fed looking to raise interest rates, while the ECB is pumping more stimulus—risks creating uncertaint y and volatilit y in currency markets. He called for “enhanced understanding among central banks on the relative paths of monetary policy.” AP

US SC ruling imperils abortion laws in many states

seismic faults running through the area have dogged the project since its conception in the 1960s, and fostered opposition nationally to nuclear power within the country’s then-fledgling environmental movement. PG&E maintains the plant could withstand the strongest likely earthquakes, but growing scientific knowledge about the seismology has heightened worries.

The state’s largest utility and env i ron ment a l g roups ag ree that California no longer needs the electricity from Diablo Canyon, g iven i nc rea sed energ y efficiency in the state and the growing availability and affordability of solar and wind power and other renewable energ y.

Nationally, the nuclear-power industry is caught in a debate between those who call nuclear power an essential alternative to climate changing fossil fuels, and those who question the growing costs of maintaining the country’s decades-old nuclear plants. AP

Palestinians blame Israel for summer water shortage

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EW YORK—By striking down tough abortion restrictions in Texas, the US Supreme Court has emboldened abortion-rights activists nationwide and imperiled a range of antiabortion laws in numerous states.

Many antiabortion leaders were openly disappointed, bracing for the demise of restrictions they had worked vigorously to enact over the past few years.

The Supreme Court has decided “the abortion industry will continue to reign unchecked, as mothers are subjected to subpar conditions,” said Heather Weininger, executive director of Wisconsin Right to Life.

On the other side of the debate, Planned Parenthood President Cecile Richards hailed the ruling as “an enormous vic tor y for women,” and joined her abortion-rights allies in vowing to quickly seek gains beyond Texas.

“Far too many women still face insurmountable barriers, which is why we are taking this fight state by state,” she said. “It’s time to pass state laws to protect a woman’s constitutional right to abortion, and repeal ones that block it.”

Th e Tex a s ru l e s s t ru c k d ow n o n Monday by the Supreme Court required doctors who perform abortions to have admitting privileges at nearby hospitals and forced clinics to meet hospitallike standards for outpatient surgery.

Supporters of the Texas law, and similar laws enacted in other states, said both provisions were necessary to ensure safe, high-quality care for women. Opponents of the laws said abortion already is a very safe procedure, and contended the real motive of the laws was to reduce women’s access to abortion.

The Center for Reproductive Rights, which led the legal challenge, said similar admitting-privilege requirements are in effect in Missouri, North Dakota and Tennessee, and are on hold in Alabama, Kansas, Louisiana, Mississippi, Oklahoma and Wisconsin. The hospital-like outpatient surgery standards are in place in Michigan, Missouri, Pennsylvania and Virginia, and are on hold in Tennessee, the center said.

Monday’s ruling is likely to remove an ongoing threat to the only abortion clinic still operating in Mississippi. A Texas-style law there would have shut down the Jackson Women’s Health Organization clinic, but enforcement of that law had been blocked pending resolution of the Texas case.

The sponsor of the Mississippi law, state Rep. Sam Mims, said he now expects that the law is doomed. It requires doctors who perform abortions to be able to admit patients to a hospital within 30 miles of their clinics; providers at the Jackson clinic had been unable to obtain such privileges.

“It’s very disappointing that...it seems like these five justices are more concerned about access to abortion than health care to the women,” Mims said in a phone interview.

In Alabama Attorney General Luther Strange said his office is ending the legal fight over its law requiring abortion doctors to have hospital-admitting privileges. The state had been appealing a judge’s 2014 decision finding Alabama’s law unconstitutional.

If the admitting privilege requirement was enforced, as many as four of the state’s five abortion clinics could close. AP

ACRAMENTO, California— California regulators are expected to decide on Tuesday whether to drop their longstanding environmental objections to the state’s last nuclear-power plant in return for its promised early closing.

The State Lands Commission will consider foregoing an environmental review before renewing a contract with Pacific Gas and Electric Co. (PG&E) after its agreement with environmental groups to close the Diablo Canyon twin-reactor facility by 2025, nine years earlier than previously planned.

The commission’s vote is the first of multiple regulatory hurdles facing the agreement to shut down the 31-year-old plant nearly 20 years ahead of PG&E’s previously planned termination.

Diablo Canyon’s twin reactors hug a Pacific Ocean bluff midway on the coast between Los Angeles and San Francisco, in San Luis Obispo County. Fears about the

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IN this July 4, 2008, file photo, a woman walks away from a yurt on a goat farm on the outskirts of Ulaanbaatar, Mongolia. Mongolians vote in parliamentary elections today, with sentiment weighed by a sharp downturn in the landlocked Asian nation’s crucial mining sector, rising unemployment and political disillusionment. The parliamentary elections are the seventh since the country made a peaceful transition to democracy in 1990. AP/ROBERT F. BUKATY, FILE

Sluggish economy casts shadow over Mongolian elections

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LA ANBA ATAR, Mongolia—Mongolians vote in parliamentary elections today with sentiment weighed by a sharp downturn in the landlocked Asian nation’s crucial mining sector, rising unemployment and political disillusionment.

The Democratic Party could lose its majority in parliament, known as the State Great Khural, to the opposition Mongolian People’s Party a year ahead of the 2017 presidential election.

But with no major policy offerings on the table and an economy pummeled by the global slump in commodity prices, it’s unclear what options Mongolia has for reviving its fortunes.

The parliamentary elections are the seventh since the country made a peaceful transition to democracy in 1990. Yet, disillusionment with the political process in the country—recently dubbed “an oasis of democracy”

by US Secretary of State John F. Kerry—is growing among younger voters, whose turnout has steadily declined in recent years.

Amgalan Sukh-Ochir, 30, who works in marketing, said he plans to boycott the elections.

“In the last elections, when the DP made all these great promises for prospering, I decided to support them, but look where we are now. I don’t think they’ve achieved much,” he said.

Mongolia’s mining- and animal herding-dependent economy has been dragged down by weak domestic demand and a sharp

decline in exports, impoverishing thousands of former herders who had moved to its few cities looking for jobs. Economic growth has slipped from 17.5 percent in 2011 to just 2.3 percent last year in the resource-rich nation of 3 million people, one-fifth of whom live in poverty.

Both the ruling Democratic Party and its main rival have campaigned on the promise of more jobs. “The main issue is, No. 1, to revive the economy,” said Bulgantuya Khurelbaatar, secretary of the opposition Mongolian People’s Party. She said the party aims to build 100 factories in 21 provinces that would create about 40,000 new jobs, though she didn’t say how.

It’s unclear what measures or resources are available to stimulate the flagging economy.

Coal, copper and other mineral resources make up 94 percent of Mongolia’s exports. But with demand in China weakening, as its economy cools, Mongolia’s own growth is forecast to fall below 1 percent this year.

Foreig n investment in the countr y has slowed to a trickle, though mining giant R io Tinto announced in May the launch of the next stage of a multibillion-dollar gold and copper mine. Still, critics of government agreements with mining companies complain that too l it t le of Mongol i a’s m i nera l we a lt h b e nef it s t he ge ner a l public. Some observers see recent changes to the electoral process

as handicapping smaller parties and female candidates.

“They have closed some space for smaller political parties, as majoritarian systems do tend to benefit two main political parties,” said Ashleigh Whelan, country director for the International Republican Institute, a US-based group with the stated aim of promoting democracy globally.

“This can reduce the opportunity for lesser-known candidates, new candidates, youth, women and those candidates who may not be a guarantee in terms of winning,” Whelan said. Her organization does not expect either party to secure an overwhelming majority.

In its latest National Human Development Report, the United Nations Development Program found that only about 45 percent of Mongolians aged 18 to 34 have voted in recent elections, compared to an overall turnout of 65 percent in 2012.

Skepticism has grown after the ruling party recently offered citizens 300,000 tugriks ($155) to sell 30 percent of their promised shares in the state-owned coal mine, Erdenes Tavan Tolgoi.

So far, 1.2 million of 1.65 million shareholders have applied to sell their shares to the government.

“I think it’s illegal to tell you the truth,” said Khurelbaatar of the opposition party. “This is right before elections it seems to all political parties that they’re actually trying to buy off votes.” The Democratic Party did not respond to requests for comment. AP

ALEM, West Bank—As Palestinians in the West Bank fast from dawn to dusk in scorching heat during the Muslim holy month of Ramadan, tens of thousands of people have been affected by a drought that has greatly reduced the flow to their taps.

Israel admits it’s been forced to cut water supplies to the parched area, saying nearby Jewish settlements have also been affected. But Palestinian areas appear to have been hit much harder, and both sides are blaming each other for the painful situation.

The water shortage has harmed farmers, forced people to bathe less and created a booming business for tanker trucks that travel from house to house delivering water.

Israel blames it on the unusually early summer heat and the Palestinians’ refusal to cooperate with Israel on renovating their leaky pipe system. Palestinians say the shortage is evidence of the uneven distribution of the water that runs beneath their feet in an underground aquifer—a distribution that was enshrined in an outdated peace agreement.

Ironically, the shortages come as Israel has made great strides t o w a rd w at e r i nd e p e nd e nc e through a fast-growing desalinization program. Today desalinated water provides about 30 percent of Israel ’s water and has reduced the semi-arid country’s dependency on meek rivers and sparse rainfall.

But the Palestinian villages in the West Bank and some isolated Israeli settlements are not connected to the national water grid, relying instead on local underground supplies. Israeli environmental advocate Gidon Bromberg said the water shortage is “outrageous.”

“The fact there is excess water in Israel means for very first time, the natural water can be shared at low cost to Israel and high gain to Palestinians and Israelis together,” said Bromberg, the director of EcoPeace Middle East, a group that promotes region-wide environmental cooperation.

In Salem, a village of 7,000 people in the northern West Bank, for a month now, Israel has slowed the water flow by two-thirds, said local water engineer Wahed Hamdan. What remains is further reduced by the village’s leaky pipe system, which was installed back in 1982, he said.

To cope with the diminished f low, Salem has instituted a rotation regime between neighborhoods, Hamdan said. Residents use pumps to bring the trickle to storage tanks on their roofs, but t he wea k stream cannot

reach homes on the outskirts of the village.

W hen the water r uns out, Mohammed Fahmi, 22, does a brisk trade supplying the village homes via 800-gallon (3,000-liter) tankers, which he delivers for 80 shekels, or about $20 per truck—which can quadruple a family’s monthly water bill.

The water comes from wells drilled by the Palestinian Authority. But there’s often not enough for everyone. “Some people wait two days until I can deliver,” Fahmi said.

Suleiman Hasan, a driver from Salem, said he is showering less to save water. His garden has dried up, and his olive tree has turned yellow. By contrast, in the West Bank ’s political center of Ramallah, water is delivered twice a week, and the pressure is high enough to reach rooftop storage tanks without extra pumping.

Usually, supplies last until the next delivery.

The story of the West Bank ’s water woes goes back to the 1967 Mideast war, when Israel conquered the territory from Jordan and took control of the water resources below ground. Under the interim peace accords signed in 1995, Israel controls 80 percent of shared water resources, while the Palestinian Authority is entitled to drill 20 percent. Israel must sell additional water to the Palestinians. The Oslo Accords, which divided up the natural water resources, were intended to last for five years, pending a final peace agreement. But they remain in effect after two decades of failed peace efforts.

Israel Water Authority Spokesman Uri Schor said Israel sells the Palestinians 64 million cubic meters of water each year, double the amount stipulated in the 1995 accords. He said that to protect the groundwater, Israel has reduced supplies to both Palestinian and Israeli communities in the West Bank. He would not say how much has been reduced to each side.

Schor accused the Palestinians of refusing to convene the Joint Water Committee, a body established by the Oslo Accords to manage the shared water resources.

Without the committee, Schor says, it’s impossible to approve repairs to infrastructure—and damaged pipes can drain away up to a third of supplies.

“The Palestinians are taking advantage of this to say Israel is taking our water,” he said. “This is rubbish. The area has a problem and this can be solved by upgrading all the infrastructure, but the Palestinians veto this.” AP

ExportUnlimited

Editor: Efleda P. Campos • www.businessmirror.com.ph

BusinessMirror

Wednesday, June 29, 2016

A9

Simply by design

By Anthony B. Rivera

Assistant Director, Export Marketing Bureau, Department of Trade and Industry

Business Beyond Borders

I

N 2015 Japan was the Philippines’s No. 1 trade partner with a total trade of $18.8 billion representing a 14.5-percent share of Philippine trade to the world valued at $129.9 billion. Philippine exports to Japan for the same year were valued at $12.4 billion, while imports were at $6.4 billion, with a balance of trade in favor of the Philippines at $6 billion.

ENTREPRENEURS and would-be exporters with Provincial Director Henry O. Conel Jr. (seated, fourth from left) of the Department of Trade and Industry in Nueva Vizcaya and speakers from the Export Marketing Bureau.

DTI-EMB conducts DBFTA sessions in Quirino, Vizcaya

T

HE Export Marketing Bureau (EMB) of the Department of Trade and Industry (DTI) held a series of seminars on Doing Business in Free Trade Areas (DBFTA) in Quirino province and Generalized Scheme of Preferences (GSPs) in Nueva Vizcaya on June 15 and 16.

The DBFTA program is an initiative that aims to increase the awareness of Filipinos regarding the benefits of free-trade agreements (FTAs) and GSPs. Participants, which included exporters, would-be exporters, businessmen, government agencies, local government units (LGUs),

faculty members and media men, attended the seminars to learn more about the export opportunities in the European Union, the US, Canada and the Philippines’s other FTA trading partners.

Discussions focused on agricultural products considering both Quirino and Nueva Vizcaya are land-

locked provinces. Both provinces have numerous opportunities of exporting agri-food products since the Philippines’s largest exports to the world comprise of fresh and processed foods, alongside electronics and parts of vessels and airplanes. At present, worldwide consumer trends are leaning toward health and wellness, uniqueness and individualism, and convenience.

T he D T I-EM B e ncou r a ged participants to explore ways to preserve agricultural products, such as canning, drying or dehydrating, fermenting and extracting oils. DTI-EMB speakers also advised would-be exporters to study the trends and tastes of their targeted market, to seek a ssist a nce f rom gover nment agencies, and to ensure product standards and safety.

The speakers for the DBFTA

seminars included Maria Jaena P. Go-aco, EMB senior trade and industry development specialist who discussed DBFTA; Justinne Marie D. Santos, EMB trade and industry development specialist who talked about Doing Business with the European Union (EU) using the GSP+; and Rudolph Jay D. Velasco, EMB Trade and Industry Development Specialist who expounded on Doing Business with the US and Canada using GSP. The DBFTA is conducted regularly every second and last Thursday of the month at the DTI International Building, 375 Senator Gil Puyat Avenue, Makati City.

Resource speakers from the DTI-EMB also visit the regions at the request of interested government agencies, LGUs, area business groups, the academe and local federations.

Justinne Marie Santos

China issues advisory on imported aquatic animals

T

HE Department of International Cooperation of the General Administration of Qualit y, Super v ision, Inspection and Quarantine (AQSIQ ) of the People’s Republic of China recently informed the Philippine government of the establishment of “Measures for the Supervision and Management of the Imported Animal Inspection and Quarantine.”

In the implementation of the measures, AQSIQ will conduct the review and registration of countries or regions which export aquatic animals to China, particularly their respective safety and sanitation controlling system and the breeding and packing plants for these animals.

In line with these assessment measures, an AQSIQ team of experts will schedule a visit to the

Philippines to conduct field assessment, evaluation and registration of the government-approved breeding and packing enterprises.

Concer ned Phi lippine government agencies are expected to submit to AQSIQ the accomplished questionnaire on “Safety and Sanitation Controlling System for the Aquatic Animals” a nd a l ist of reg istered a nd government-approved breeding

upcoming events Compiled by Louise Kaye G. Mendoza DTI-EMB Knowledge Processing Division

JUNE 28

Event: Micro, Small, and Medium Enterprise Development Week Venue: Philippine Trade Training Center, Pasay City

JULY 1-2

Event: National Round Table on Non-Tariff Measurers Venue: Balagtas and Balmori Room, Peninsula Hotel

JULY 4-6

Event: EMB Team Building Activity Venue: Batangas

Philippine export items designed by Filipino artists and handcrafted by local artisans are on display at the Manila Design Collective Pop-Up Event at Good Design Marunouchi in Omotesando, Japan.

and packing enter prises before July 15.

Local agencies are also requested to submit comments on the “Draft Protocol on the Requirements for the Quarantine and Sanitation of the Philippine Edible Aquatic Animals Exported to China.”

Copy of the measures can be downloaded from www.dti.gov. ph/emb.

Indications point to Japan as a very lucrative market for the Philippines, with a 127 million population and a per-capita income estimated at $38,100. The growth rate of Philippine exports to Japan is now at 8.65 percent covering the period of 2011 to 2015. Export opportunities for promotion to Japan include construction and wood-based building materials, electronics parts and components, processed and nonprocessed food, lifestyle and fashion products, and information technology (IT) and creative services, among others.

The bilateral trade with Japan is primed by the PhilippinesJapa n Economic Pa r t nership A g reement, which faci litates and promotes the free f low of goods, persons, ser v ices and capital, which further enhance the economic relations between the two countries.

Significantly, this year marks the 60th year of Philippine-Japan diplomatic relations. As part of the commemorative activities to celebrate the occasion and to further promote the bilateral trade for both countries, the Philippine Embassy in Tokyo led the initiative to organize four trade-related events, together with the Philippine Trade and Investment Center (PTIC), to showcase Philippine capabilities for the Japanese market.One of the main activities for the 60th anniversary of Philippine-Japan trade relations featured the design capabilities of Philippine designers in the Exclusively by Hand Design Exhibit held at Good Design Exhibit in Marunouchi, which opened on June 12.

Marunouchi is labeled as one of Tokyo’s most prestigious business and shopping districts lined up with an array of international high-end f lagship stores. Featured were Philippine fashion and lifestyle designers of minaudière, handbags, apparels, furniture and jewelry, which will be showcased in the prime area until June 30, courtesy of the Japan Institute of Design Promotion, an institute dedicated to comprehensive promotion of design.

When PTIC Tokyo invited the Export Marketing Bureau (EMB) to take part in the initiatives to promote Philippine-design capabilities through a series of business matching, market sensing and networking activities, the EMB welcomed the opportunity.

Not only does this fall under the Philippine Export Development Plan priority of promoting services other than information tec h nolog y- bu si ness process management; this is also considered as a gateway of opportunity to determine other related prospects to boost our Philippine exports.

More than the usual promotional activities, this pioneer event opened up the prospects to initiate the direct link and connection with potential Japanese partners to bridge specific t rade oppor t u n it ies t hrough

the business-matching activity, which yielded promising results.

The Philippine designers received the endorsement of Japanese well-known fashion and lifestyle company Side Co. Inc. represented by its President Yoshio Yokobori, who spoke in both Japanese and English, bridged the lang uage bar r ier and a llowed our designers to get their message across, offering designcontract services, as well as the manufacturing capabilities, that reached out to upscale (middle) and high-end market.

As Marunouchi is the place to be in Tokyo for high-end designer products, the Philippine exhibit stood side by side with known brands from the US and Europe and created much interest from the Japanese ref lected in var ious news ar ticles and blogs, encouraging the Philippines to consider participating in other fashion and lifestyle engagements in Tokyo.

Accomplished were the objectives highlighting the first-ever participation of the Philippines with 55 business meetings for the 10 participants, a good coverage by the media in Japan, attracting potentials for future sales of over $600,000 and a total of 1,544 visitors received in the exhibit as of June 25.

Given the above, the EMB is more than ever encouraged to pursue the development of the fashion and lifestyle sector, together with the designers, micro, small and medium enterprises (MSMEs), centering on innovation, design capabilities and the use of indigenous materials to create that niche in Japan and the rest of the world.

Likewise, as an integral part of the market-access requirements, the EMB prepares the exporters for market readiness through initiatives related to branding, proper labeling, language translations, compliance with country-specific certifications and market positioning, a mong ot hers. Es pec i a l ly i n markets like Japan, the consideration to promote products and services traverses through the normal mode. The pitch to sell to a sophisticated market rests on a particular story and concept behind the product and/ or services to create the interest and to highlight the special features, such as with the use of native materials, environmental considerations and communitybased components.

We take this opportunity to invite interested companies to join us in focused-group discussions to determine specific thrusts and government interventions patterned on the needs of the MSMEs toward identifying promotional activities that would allow us to directly develop business partnerships around identified markets where opportunities exist around the world. n Send your feedbacks or comments at exportunlimited@dti.gov.ph.

A10 Wednesday, June 29, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

Brexit is the sum of China’s fears

I

By Christopher Balding | Bloomberg View

N voting to leave the European Union, the United Kingdom has confirmed many of the Chinese Communist Party’s worst fears about democracy. Now the question is whether Brexit will also impede its attempts at economic reform.

At least one major target of “Leave” campaigners in the UK—an unaccountable bureaucracy in Brussels, enjoying the fruits of power—will certainly resonate with Chinese citizens. Despite a recent corruption crackdown, dissatisfaction with officials is simmering in many parts of China—over land grabs, unpaid wages, layoffs and more. For the Communist Party, a popular rejection of distant bureaucrats isn’t to be taken lightly.

Brexit also confirms the party’s fears about the capriciousness of the people.

As an editorial in the Global Times, a state-run tabloid, put it, Brexit is a “Pandora’s box,” a “lose-lose situation” and a “major setback.” The Chinese people, it went on, “will continue to watch the consequence of Britain’s embracing of a ‘democratic’ referendum.” Such skepticism of the wisdom of crowds is widespread in Beijing’s halls of power—and it has real-world consequences for democracy advocates.

A deeper worry for the party is instability. The political and business classes in China are extremely risk-averse. Banks lend to state-owned enterprises in the belief that the government stands behind them, students from the best schools aspire to the civil service, and changes to policy flow from on high.

Party technocrats tend to see political and financial instability as intimately linked. And as Premier Li Keqiang stressed repeatedly on Monday at the World Economic Forum, Brexit has increased both.

The immediate economic consequences for China are likely to be minimal.

As Bloomberg economists Tom Orlik and Fielding Chen have pointed out, only 2.6 percent of Chinese exports head to the UK. But the indirect consequences could be substantial. After Britain voted out, the yuan suffered the biggest one-day drop since its devaluation last August. In the worst case, Brexit may act as a long-term drag on China’s exports, increase its spare capacity, spur capital flight, impede foreign direct investment and generally weaken the forces that have sustained its growth over the past few decades.

Amid that kind of pressure, expect China’s leadership to double down on economic and financial policies intended to keep growth humming and minimize any disruption, no matter what the price. That may mean a further weakening of the yuan and more credit-fueled investment. It may mean leaders will think twice about undertaking contentious bank reforms. And a much-needed overhaul of state-owned enterprises—which risks turning laidoff workers into crowds of protesters—could be placed on the back burner. A further tightening of dissent also can’t be ruled out.

The Chinese Communist Party is a keen watcher of world events, and is quick to learn from the failures and successes of others. As it watches the British pound plummet and global markets go haywire, it will only see more evidence that the risks of major financial and political reforms simply aren’t worth taking.

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SSS accomplishments during the last six years: Achieving strong financials Susie G. Bugante

All About Social Security Conclusion

T

he journey from 2010 onward was a marked transformation for the Social Security System (SSS), and a major turnaround. In terms of reach, it has over 100 additional branches; in terms of membership base, there was an increase of 5 million; in terms of contribution collections, an annual growth rate of 8.4 percent; and in terms of financial performance, the SSS currently stands on stronger ground.

The solid financial performance of SSS for the last five years is evidenced by its rising net revenue.

Since 2010, annual net revenue averaging at P35 billion has quadrupled, compared to the average net revenue of P8 billion during the previous decade from 2000 to 2009. This is primarily attributed to strengthened self-sufficiency.

In 2012 the SSS marked its first contribution surplus—a major feat that bespeaks of financial sustainability. It has not looked back since then, as each year highlighted the improved contribution collections surpassing all expenditures. Prior to 2012, the SSS had a contribution deficit; thus, investment income was used to cover the shortfall in

contributions to help fund benefit payments and operating expenses.

The concerted effort of increased collections due to expanding membership and cost-efficiency in operating expenditures not only reversed the prolonged insufficiency, but even generated a surplus to augment the SSS Investment Reserve Fund.

Since 2010, the SSS intensified employer compliance and coverage of priority member-markets, such as manpower agencies, informal-sector workers, cooperative members and overseas Filipino workers. With over 100 additional offices nationwide and abroad, plus new payment outlets in popular malls, member-contribution remittance was made easier.

With four consecutive years of

contribution surplus the SSS has affirmed its path to strengthened financial performance. With the consistent growth of the Philippine economy, the SSS was able to optimize investment returns from the emergence of a more robust but volatile financial markets. Historical return on investment of the investment portfolio has consistently exceeded the 10-year Treasury-bonds and other comparative investment benchmarks for the period 2010 to 2015.

Section 25 of Republic Act 8282 (Social Security law) limits SSS expenditures to “not more than 12 percent of the total yearly contributions plus 3 percent of other revenues.”

Monitoring this expense ratio is essential for the SSS to be more costeffective in its operations.

During the early years of the new millennium, the SSS exceeded its charter limit and even surpassed 100 percent. With the system’s determined focus on operating efficiency, operating expenses versus charter limit were brought down to 52 percent in 2015, from 69 percent in 2010.

This was accomplished through the prudent management of operating expenses—a key achievement despite substantial expenditures in infrastructure, manpower and increasing benefit payments along with higher transaction levels and higher membership base.

One notable program that generated savings to the SSS was the revival of the Annual Confirmation

No, graft isn’t good for growth

S

By Tom Orlik | Bloomberg View

ome critics dismiss President Xi Jinping’s massive antigraft campaign as a political witch hunt directed at his enemies.

Others have a different complaint: They argue that bribes and favors have historically served as the grease in the wheels of China’s growth. By disrupting the traditional flow of business, they contend, Xi’s graft enforcers have brought the country’s economic engine grinding to a halt.

The good news is that those critics are wrong, as a more careful look at the data makes clear. The bad news is that the government’s own efforts to revive growth risk replenishing corruption at its source.

The case for graft, as it were, is superficially plausible. Like a lightfingered version of Adam Smith’s invisible hand, thieving officials have an incentive to spur economic activity. The real-estate and infrastructure projects that line their pockets also contribute to a blistering pace of investment. If millions of tax dollars have gone into banquets of sea cucumber and baijiu—a throatscorching Chinese liquor—such extravagance, at least, boosts consumption. Now investigators have

frightened cadres into canceling investment projects and contenting themselves, as Xi has urged, with four dishes and a soup. Consumption, investment and growth have all taken a hit.

The numbers, however, tell a different story. Drawing on data from ChinaFile, provincial prosecutors, and the National Bureau of Statistics, Bloomberg Intelligence Economics has assembled a unique data set on corruption and growth over the last decade. Even given the occasionally patchy nature of the data, it’s clear that the corruption crackdown isn’t to blame for China’s slowdown.

Investigators have targeted a whole range of provinces for scrutiny.

Yet, growth has slowed in some, such as coal-mining Shanxi, and not others, like export-hub Guangdong. The national data points in the same direction: The biggest slowdown in GDP growth came before Xi’s campaign started at the end of 2012, not after.

This shouldn’t be a huge surprise. In Africa, Latin America and Eastern Europe, graft is rightly seen as adding to the cost and uncertainty of doing business, inequality and social stress, thus, presenting a barrier to development.

It’s hardly likely that China would have discovered a unique form of pro-growth corruption.

The problem is what the data also confirms about the roots of corruption. Provinces where the state accounts for a large share of industry and employment, and where growth is reliant on debt-fueled investment—all areas where lessdeveloped inland provinces score worse—not surprisingly tend to suffer higher levels of graft.

With billions in revenue and opaque governance, state-owned companies present obvious opportunities for rent-seeking and

of Pensioners Program, a screening process that prevented pension payments to noneligible beneficiaries due to remarriage, recovery from total disability or member’s death.

Strategic initiatives and policy reforms implemented from 2011 to 2015 resulted in total assets increasing to P444 billion, from P298 billion in 2010, for a remarkable 50-percent increase. The notable growth of the system’s financial resources can be attributed to marketing efforts to increase contribution collections, and increased operating efficiency and judicious management of investment portfolio based on good governance principles.

For its financial statements in 2014, the SSS received its first unqualified opinion from the Commission on Audit since 2009. An unqualified opinion is issued when the independent auditor believes that the company’s financial statements are sound; that is, the statements are free from material findings. This unqualified opinion is the hallmark of improved confidence and an affirmation of a strengthened SSS. For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS call center at 920-6446 to 55, which accepts calls from 7 a.m. on Monday all the way to 7 a.m. on Saturday.

Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.

embezzlement. So do the arcane of f-ba lance sheet str uctures that local governments use to borrow money.

Even as Xi’s graft-busters continue to target both “tigers” and “flies”—high-level officials and their lowly counterparts—other government policies are channeling more resources into the state sector. Plans for wider reform of state-owned enterprises remain on the drawing board, and there’s no intention to expose behemoths in energy, finance and other strategic sectors to market forces. Investment by stateowned companies is up more than 23 percent year-on-year in the first five months of 2016. By contrast, spending by private-sector firms has slowed dramatically, growing less than 4 percent.

The government’s strategy might make sense as a stopgap solution, a classic Keynesian stimulus as state spending fills the gap left by retreating private firms. But as the state sector’s role in the economy grows, so too will opportunities for graft.

A short-term boost to growth could well lead to a longer-term drag.

Opinion BusinessMirror

opinion@businessmirror.com.ph

Termination of a joint venture: Dissolving the BDO and Generali Group partnership Atty. Dennis B. Funa

INSURANCE FORUM

O

n March 25, 1999, a joint-venture agreement (JVA) was signed between Generali Italy and Jerneh Asia Berhad (JAB), a member of Malaysia’s Kuok Group, known as the Netherlands joint-venture agreement (NJVA). Pursuant to this joint agreement, a second JVA was signed the next day, on March 26, 1999, among BDO Unibank Inc. (BDO), JAB and Generali Group/ Assicurazioni Generali S.p.A. (Generali), through Generali Asia N.V. (GANV), creating the Generali Pilipinas Holding Co. Inc. (GPHC). It was formally launched on March 9, 2000. The NJVA was, however, terminated on November 14, 2013, in effect of removing the participation of JAB in the joint venture.

As of the date of the termination of the joint venture, GPHC was 40 percent owned by BDO and 60 percent owned

by Generali Asia N.V. GPHC is the parent company of Generali Pilipinas Life Assurance Co. (GPLAC), the life insurer, and Generali Pilipinas Insurance Co. (GPIC), the nonlife insurer. In June 2015 BDO and Generali publicly announced and agreed to terminate their JVA embodied in GPHC, ending their 15-year partnership. Under the termination agreement, Generali will acquire from GPHC 100 percent of the outstanding capital stock of GPIC, composed of 2,499,995 common shares and 7,088,599 preferred shares. The relevant Insurance Commission directive for compliance is Circular Letter 2014-37 (on acquisition of control).

As agreed upon by the parting partners, BDO will take full control of GPHC and GPLAC (life), while Generali will take control of GPIC (nonlife).

GPLAC will, thus, be a wholly owned life-insurance unit of BDO. With the change in ownerships, GPLAC and GPIC assured continued service for existing policies. Generali will continue its presence in the Philippine market.

GPHC will be renamed BDO Assurance Holdings Corp. while GPLAC will be renamed BDO Life Assurance Co. Inc. (BDO Life). A share purchase agreement (SPA), dated June 8, 2015, was signed among BDO, BDO Capital & Investment Corp. and Generali Asia N.V. for the transfer of GPLAC shares to BDO through the acquisition of the 60 percent of the outstanding capital stock of GPHC, composed of 59,997 common shares and 1,790,280 preferred shares.

GPLAC has a bancassurance agreement with BDO, with 760 financial advisors as of December 2015. GPLAC registered a total premium of P4.99 billion as of 2014, the ninth-largest in the country. It has a net worth of P2.73 billion as of end-2014 and a net income of P840.23 million during the same period, ranking it seventhhighest. Its president and CEO is Renato A. Vergel de Dios.

GPIC will continue under the ownership of Generali Asia N.V. (GANV). It will continue its Philippine business by shifting to life insurance under a new name and to be known as Generali Life Assurance Philippines Inc. (GLAPI, or

Generali Philippines). GPIC’s Articles of Incorporation has been amended on January 9, 2016, and March 30, 2016, changing its primary purpose to a lifeinsurance business and its name from GPIC to Generali Life Assurance Philippines Inc. GPIC will be running off its nonlife business and has, in fact, applied for the conversion of its servicing nonlife license to a regular life license.

GANV has assumed the obligation to raise the capital of Generali Philippines as required under the Amended Insurance Code and had, in fact, completed the needed cash infusions. Generali Philippines will be operating under a reconstituted board. As part of the agreement, certain in-force life-insurance policies will be transferred from GPLAC to GLAPI. And in this regard, an assumption of reinsurance agreement will be signed between GPLAC and GLAPI. The completion of the dissolution of the partnership will usher in the birth of two new life-insurance companies—the BDO Life Assurance Inc. and the Generali Life Assurance Philippines Inc. by the second quarter of 2016. BDO is a full-service universal bank and is the largest bank in the country in terms of assets, loans, deposits, capital and trust funds, as of March 31, 2015. BDO’s net income was P22.8 billion as of end-2014. In 1997 BDO launched its first insurance venture with the creation of a subsidiary called the BDO Insurance Brokers.

The Generali Group is one of the largest global insurance providers operating in over 60 countries. It is the largest insurance company in Italy. In 2010 it was the second-largest in the world in terms of income, next only to AXA. Assicurazioni Generali AustroItaliche was constituted on December 26, 1831, in Trieste, Italy. Trieste was the most important sea port of the Austro-Hungarian Empire. The idea to create a large insurance business was the brainchild of Giuseppe Lazzaro Morpugo. Decades after its creation, the company dropped the phrase “austro-italiche” from its name.

Its logo carries the image of the lion of Saint Mark, the patron saint of Venice.

Dennis B. Funa is currently the deputy insurance commissioner for Legal Services of the Insurance Commission. E-mail: dennisfuna@yahoo.com.

A dash of common humanity

L

The young are embarrassed that their old people work at menial jobs. But they shouldn’t be. They are just confused. When one study concluded that Singapore could use 1 million more workers, there was an outcry that this would invite immigrants, so the retirement age was pushed to 67 from 65, and that of cab drivers to 75 from 73.

The young are embarrassed that their old people work at menial jobs.

But they shouldn’t be. They are just

that this would invite immigrants, so the retirement age was pushed to 67 from 65, and that of cab drivers to 75 from 73.

But Singapore will always need

Teddy Locsin Jr.

Free fire Continued from A1

oneliness was one reason; extra income, even if small, and reluctance to be a burden on their families are others or all three. A major reason: The desire to continue contributing to the miracle of Singapore. It has had the only unremittingly intelligent government in the world, aside from Denmark, if we believe Francis Fukuyama. confused. When one study concluded that Singapore could use 1 million more workers, there was an outcry

Bloomberg View

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oday, thanks to the Supreme Court, the pro-life movement lost its major weapon to deprive women of legal abortions.

The pro-lifers thought they had found a way around their inability to get Roe v. Wade overturned even with Republican majorities in the House and Senate. Their strategy was to whimper about “women’s health and safety,” as if either were jeopardized or as if the pro-lifers cared; get GOP-controlled legislatures to pass hard-to-meet regulations; and then cheer as abortion clinics and doctors couldn’t meet those rules. Texas shut down half

its clinics, and the other half were threatened by regulations that would require operating rooms to be capable of performing brain surgery, and hospital-admitting privileges for doctors who worked there.

That all ended today. The court majority exposed the rules for what they were: “undue burdens” or, in layman’s language, ridiculous.

The 5-3 decision was the court’s most sweeping ruling on abortion rights since 1992, in Planned Parenthood v. Casey, which said states couldn’t place undue burdens on a legal procedure. In saying that Texas’s provisions were undue, the case will strike down similar regulations in other states and may well curtail other unnecessary but burdensome

foreign workers. And if the young see their elderly folk working at the same menial jobs as overseas Filipino workers (OFWs), they may come to treat them better and respect the kind of work that this privileged generation of Singaporeans look down on.

With one of the best education systems in the world, one of the most productive, though selective, generations in history, and one of the highest per-capita GDPs, along with supergood social housing and health care, and the longest working hours, Singapore needs OFWs to take care of the home for them.

And thereby acquire a greater sense of common humanity with those who take care of their homes and do the menial jobs—be they foreign domestic workers or their own elderly folk.

‘Where there’s smoke, there’s fire’ at DENR? Michael Makabenta Alunan

on the contrary

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he appointment of Gina Lopez of the ABS-CBN Bantay Kalikasan fame as President-elect Rodrigo R. Duterte’s choice as secretary of the Department of Environment and Natural Resources (DENR) is triggering jitters, particularly to the mining industry and stakeholders involved in clean air, but eliciting jubilation to die-hard environmentalists.

An ax to grind?

‘Mine’ your own business?!

While she had little problems with her other advocacies, like the Pasig River rehabilitation, Bantay Baterya and La Mesa Dam, etc., she met the strongest opposition from the mining and clean-air sectors. She, therefore, has an ax to grind in these sectors.

On clean air alone, she launched over a decade ago the Bantay Usok, or TXT Usok, campaign as a project of ABS-CBN Foundation’s Bantay Kalikasan. It involved the public, and supposedly after three text reports, enforcers would track down the smoke belcher and serve escalating levels of penalties.

Even the Asian Development Bank helped finance her clean-air advocacy. A World Health Organization (WHO) expert then said that 60 percent of pollution could be solved if the government will seriously run after smoke belchers, who will be forced to maintain their vehicles, seek solutions and adopt all sorts of technological interventions from emission-reducing fuel additives; lubricants; air bleeders that adjust air-fuel ratios for easier combustion; magnetic ionizers; catalytic converters, etc., many of which were developed by emerging inventors who suddenly became creative to meet the pressures on smoke-belchers.

Then-Transportation Undersecretary Arturo T. Valdez, who aggressively enforced the crackdown against smoke belchers and erring private emission-testing centers (PETCs), was relieved of his post by the lateTransportation Secretary Leandro R. Mendoza, following alleged pressures from affected interest groups.

Perhaps, she’s now sharpening her proverbial “ax to grind,” but what’s blunting it is another complex battle front that she has to straddle with circumspect, caution and cushion. It’s the mining industry with Manuel V. Pangilinan, chairman of Philex Mining, who has articulated the interests of the industry.

Being a rabid antimining advocate, her appointment triggered panic in the stock market, with mining stocks plunging in value precipitously. Philex reportedly lost over P10 billion, which also meant losses of P2 billion for the Social Security System, as it owns 21 percent of Philex. Semirara, which mines coal, lost about P11 billion; and Nickel Asia about P4 billion. In contrast, Lopez-owned companies engaged in renewable energy, like First Gen Corp., gained P9 billion; and Energy Development Corp. gained P8 billion in market capitalization. It is true one cannot totally ban mining, as many products we use from cell phones, appliances and kitchenware to motor vehicles, etc., use processed minerals from mining. But on the contrary, it is also true that better technologies used in Canada, the US and Australia practice responsible mining.

It is, thus, time to review the entire industry, including its fiscal incentives, like the seven-year tax holiday, considering the industry contributes a measly 2 percent of GDP. As one never goes wrong in the end, when one is sincere, perhaps it is wise to give Lopez a free hand in cleaning up the industry. Duterte earlier planned to run the DENR

Court restores balance to abortion debate

By Margaret Carlson

Wednesday, June 29, 2016 A11

restrictions, such as rules on the width of hallways and waiting times.

Justice Ruth Bader Ginsberg described how ludicrous it was to single out abortion clinics for special rules, since childbirth is far more dangerous, yet no law says you have to go to a hospital to have a child. And driving women into a back alley to have abortions would surely create an actual threat to a woman’s health.

For most Americans, abortion is a more complicated subject than our bitter, partisan arguments would indicate. Polls show that we want to both call ourselves pro-life while having pro-choice abortion laws.

People oppose laws like Texas’s that violate Roe. But a majority of Americans supported a partial-

birth abortion ban first proposed in 1995 and finally passed in 2003.

Republicans outmaneuvered Democrats, who found themselves defending grisly late-term abortions and looking more pro-abortion than pro-choice in their defense of it. While it was true that such abortions are relatively rare, they weren’t as rare as the Democrats had long argued. By the late-1990s, the exception for the “health of the mother” had been extended to “psychological health,” and there were too many cases of what Democratic Sen. Daniel Patrick Moynihan said approximated infanticide. In 2007 the Supreme Court in Gonzales v.

Carhart upheld the ban.

Until viability, at about 24

himself for one year, but has nominated Lopez, instead. He, thus, wants special attention on the DENR and is behind her, but has clarified that they are not against mining per se, but are against irresponsible mining that exploits workers and cause havoc to the environment.

The industry cannot demand to be left alone, as it is the government’s role to supervise mining. Mining firms need to simply adjust to the new rules of the game.

Cleaning sweeps dust into air

When one sweeps a house unkept for many months, one expects pollution to worsen initially, as the dust soars into the air. Similarly, when Duterte starts sweeping clean the bureaucracy, dirt won’t be swept under the rug, but will surface, causing temporary discomfort.

I believe the Duterte administration will learn to adjust if things go untenable. On the contrary, it is understandable reforms, more so radical change, will cause disruption, discomfort and resistance that will proverbially cause the dust to disturb the air temporarily.

Miners may over-mine or undermine, but if Duterte is deter-mined, a healthy balance can be achieved for the common good.

With Duterte’s determination at reforms and stopping corruption, we can expect a probe into how past budgets were spent, and whether mandates of the law have been complied.

focus has always been on measuring ambient air pollution or how polluted the air is, but not much effort on reducing actual emissions at source whether at smokestack factories, area source burning or from motor vehicles. But with the share of vehicles increasing steadily from over 70 percent of total air pollution in Metro Manila to 88 percent and, finally, to 92 percent as of 2015, because of the increasing volume of vehicles and the transfer of factories to the ecozones in the countryside, the DENR must focus on air pollution.

If air pollution is not reduced substantially, and the smoke literally remains, there must be fire proverbially somewhere. Whatever it is, the new government must put out the fire figuratively.

But there’s hope ahead

OF all the environmental issues, the one that is really causing so much mortality or lives of about 85,000 deaths a year, is not mining, solid waste, forestry or greening, or waste water, it is air pollution. This total number covers those who die directly from respiratory diseases, like lung cancer, pneumonia, tuberculosis and bronchitis, etc., which are all aggravated by air pollution.

And, despite 17 years now of the Clean Air Act, how come air pollution remains the same or may have even worsened owing to the yearly increases in the volume of vehicles and the absence of any technological intervention to reduce emissions.

For over a decade-and-a-half, the

But all is not lost, as little efforts in the right direction are being done.

Visminda A. Osorio, Environmental Management Bureau-National Capital Region director, emphasized that it is precisely what they are planning, which is to support programs that will focus on transportation, particularly on education on solutions to air pollution to complement road-apprehension enforcement by local government units.

After all, under Section 46 of the Clean Air Act on penalties on smoke belchers, violators are required by law to undergo seminars on all pollutioncontrol techniques and preventive maintenance. This also complies with Section 11, which requires the government to make available all the information on preventive maintenance, pollution-control techniques and verified technologies that will help reduce emissions, from which motorists can make their educated choices and decisions.

There are more provisions in the law that remain unimplemented, but a review involving civil society, transport sector and other stakeholders may be necessary to involve everyone in the reform process.

In the end, there is hope ahead because figuratively, when the fire gets too big, the only solution is to douse it literally with tubig.

E-mail: mikealunan@yahoo.com

weeks, the law recognizes a woman’s right not to continue the pregnancy.

On one extreme, some pro-choice advocates would extend that later than 24 weeks. On the other extreme, some pro-life Republicans insist that a fertilized egg has the same rights as a full human being, and that a woman accidentally pregnant, even in cases of rape or incest, should be forced into motherhood without thinking about what kind of mother she would be or the effect on the infant. As Barney Frank, the former Democratic congressman, once put it, “Republicans’ concern for the child begins at conception and ends at birth.”

Most Americans live somewhere in the murky middle on the issue.

The Supreme Court’s decision today could throw abortion back into presidential politics with a thud.

Now Republicans will have to find a new way to deprive women of their constitutional right. When Donald Trump, now the Republicans’ presumptive nominee, early on in his campaign said that abortion should be illegal and that a woman having one should go to jail, he didn’t realize that the pro-life movement drew the line at the politically untenable position of punishing women. Republicans weren’t going so far as to risk losing the woman’s vote for time immemorial. Trump drew back, but if he is not getting that vote anyway, what is there to lose by embracing his position?

If there’s smoke, there’s fire

2nd Front Page BusinessMirror

A12 Wednesday, June 29, 2016

‘Cutting poverty requires tripling Filipinos’ income’

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By Cai U. Ordinario

@cuo_bm

radicating poverty in less than 25 years would entail tripling the income of Filipinos to significantly narrow the gap between the rich and the poor, according to the National Economic and Development Authority (Neda).

NEDA Assistant Director General Rosemarie G. Edillon said eradicating poverty and hunger, and having decent jobs are considered the primary goals and aspirations of Filipinos for their country, according to “AmBisyon Natin 2040,” the long-term vision of the Philippines.

“If we are able to roll out inequ a l it y-reduc ing st rateg ies, then by 2030, when we report on our accomplishments on the Sustainable Development Goals [SDGs], we can say we have left no Filipino behind,” Edillon said in a presentation at the Economic Journalists Association of the Philippines-Neda Forum on AmBisyon Natin 2040 on Tuesday.

Edillon said the country’s current per-capita income is pegged

$3,500

The current per-capita income of Filipinos at $3,500, using 2014 purchasing power parity terms. If the country will eradicate poverty in 25 years or earlier, this must steadily increase to around $11,000, or three times the current per-capita income.

This is comparable to the current per-capita income of Malaysia, which is pegged at $11,120. The poverty rate there is 0.6 percent.

However, increasing incomes is insufficient and must be coupled by the narrowing of the gap between the rich and the poor. Edillon said

this can be done through the reduction in the Gini coefficient— a measure of inequality—of 3 percent every year.

The country’s Gini coefficient is currently pegged at 0.46. According to incoming Socioeconomic Planning Secretary Ernesto M. Pernia, this is the highest in Asean.

The United Nations Development Programme said the Gini coefficient measures the deviation of the distribution of income among individuals or households within a country from a perfectly equal distribution.

It is a value of 0 represents absolute equality, where everyone has the same; a value of 1 absolute inequality, where one person has everything.

Narrowing the gap between the rich and the poor by 3 percent every year would mean trimming down the Gini coefficient to around 0.29 by 2030—the SDG deadline—and 0.21 by 2040, or in 25 years.

Based on the 2015 Human Development Report, countries with very low Gini coefficients at 0.20 are mostly found in Europe.

“This is actually a big challenge, sustaining that vision for 25 years.

It spans four administrations beginning with the incoming administration,” Edillon said.

She said these aspirations can be achieved by having “competitive

INTERTROPICAL CONVERGENCE ZONE AFFECTING VISAYAS AND MINDANAO (JUNE 28, 5:00 PM)

enterprises” that generate highquality jobs providing decent incomes. This means involving not only the government, but also the private sector and individual Filipinos. On the part of the government, there must be emphasis on priority sectors, such as housing and urban development, as well as connectivity—transport and communication.

Edillon said agriculture development will not only increase farmers’ incomes but also lift them out of poverty. This will also help eradicate hunger by making food commodities affordable.

Based on the results of the longterm vision, AmBisyon 2040 data showed 79.2 percent of Filipinos only want “a simple and comfortable life” in 25 years. Only 3.9 percent of Filipinos wanted to the life of the rich.

However, Esguerra said the dreams of Filipinos are not that simple. A simple and comfortable life means owning a medium-sized home; earning enough to support everyday needs; owning at least one car/vehicle; providing for their children’s college education; and traveling around the country for vacation.

Using 2015 prices, the Neda estimated that what Filipinos termed as “simple” means having a monthly gross income of P120,000 a month for a family of four.

www.businessmirror.com.ph

PHL LAGS BEHIND IN WB’S LOGISTICS PERFOrMANCE INDEX

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he country’s poor infrastructure, logistics and customs management may have caused the Philippines’ sranking in the latest World Bank’s ( WB) Logistics Performance Index (LPI) to drop to 71st.

In the report, the Philippines’s ranking declined by 14 notches to 71st out of 160 countries, with a score of 57.5 this year. In 2014, the last time the report was released, the country was ranked 57th out of 160 economies.

“We saw it in the trading across borders indicator before, last year, was when there was the truck ban installed that triggered off all the Manila port congestion and once that got started, it took so long to fix the backlog,” National Competitiveness Commission Private Sector Cochairman Guillermo M. Luz said.

The port congestion in the Port of Manila in 2014 significantly affected the country’s export and import growth, and caused a spike in food prices.

The Asian Development Bank earlier estimated the congestion at the port of Manila added to the increase in logistics cost, which also put pressure on inflation. Two years ago, the city of Manila issued an ordinance restricting cargo trucks from passing through major thoroughfares, disrupting port and cargo deliveries. “ This was the decision of only one local government unit, and that hurt. In a way, we shouldn’t be surprised,” Luz said. Meanwhile, the country’s performance tracked that of most

71st

The country’s rank in the 2016 Logistics Performance Index of the World Bank Asean-5 economies, except for Cambodia, which improved its LPI ranking to 73rd out of 160. Singapore, mean-while, maintained its 2014 ranking of fifth overall in 2016.

Other Asean-5 countries—Malaysia, Thailand, Indonesia and Vietnam, which also posted lower rankings in the LPI 2016 at 32nd, 45th, 63rd and 64th, respectively—still outperformed the Philippines.

The LPI was measured through six primary indicators—customs; infrastructure; international shipments; logistics quality and competence; tracking and tracing; and timeliness.

The Philippines ranked the lowest in infrastructure at 82nd out of 160 countries, followed by customs, at 78th, and logistics quality and competence, 77th.

The country also ranked 73rd in tracking and tracing; and 70th in timeliness. The Philippines’s best per formance was recorded in the international shipments categor y, where it ranked 60th worldwide.

I nternational shipments, rep resented the ease of arranging competitively priced shipments, which are rated from very difficult (1) to very easy (5).

“Customs and border agencies continue to underperform systemat ica lly i n co mpa r is on wi th th e other components of the LPI. Infrastructure exhibits a similar behavior as in previous occasions, with the highest quintile only showing a positive markup compared with the overall score,” the report read.

“Nonetheless, this time around, the quality of logistics services tends to be lower than the general performance across all quintiles,” it added.

The World Bank also tracked the logistics performance of all 160 countries in the past four editions of the LPI— 2010, 2012, 2014 and 2016. It found that the Philippines ranked 64th overall.

The countr y ’s ranking was the highest in terms of international shipments at 49th out of 160 countries, and the lowest in infrastructure at 77th worldwide.

The Philippines’s ranking in customs, logistics quality and competence, tracking and tracing, and timeliness were pegged at 62nd, 65th, 61st and 68th, respectively, over the four LPIs. “Logistics performance is about achieving reliability of supply chains linking economies to markets. In the most constrained countries the need focus on infrastructure, or critical improvements in customs and border management,” said Jean-François Arvis, from the Trade & Competitiveness Global Practice at the World Bank Group and coauthor of the report.

“More logistically performing countries have to address complex sets of issues centered on the development and quality of services. And all top performers show strong cooperation between the public and private sectors in developing a comprehensive approach to efficient logistics,” Arvis added. The LPI is a bi-annual report that ranks 160 countries on their trade logistics performance. For the third time, Germany is the top performer, while Syria ranked lowest.

Countries like Kenya, India and China all improved their previous performance according to the report, which is based on survey data from more than 1,200 logistics professionals.

The report ranks countries on a number of dimensions of supply chain performance, including infrastructure, quality of service, shipment reliability and borderclearance efficiency. Cai U. Ordinario