BusinessMirror March 23, 2015

Perspective»E4

AUSTRALIA A PUZZLING HOTBED OF ISLAMIC STATE RECRUITING

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NIGHTCLUB bouncer who reportedly became a terror group leader. A man who tweeted a photo of his young son clutching a severed head. A teenager who is believed to have turned suicide bomber, and others suspected of attempting to travel to Syria to join the Islamic State (IS) movement. All of them, Australian.

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THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012

U.N. MEDIA AWARD 2008

A broader look at today’s business TfridayNovember 18, 2015 2014 Vol. 10 No. 165 40 Monday, March 23,

www.businessmirror.com.ph

Uneven global outlook baffles BSP

UPGRADE YOUR ACCESSORIES WITH THE SEASON’S FAVORITE EMBELLISHMENTS D

EAR Lord, the “healing journey” which began on the trail of the proclamation of the Gospel 2,000 years ago around the Lake of Galilee continues today in the whole world. You, the compassionate healer, continue Your mission through the Church and all those who believe in the power of love. We always believe the compassionate healer in You, Oh Lord, whom we can turn to all the time. Amen.

EXPLORING GOD’S WORD, FR. SAL PUTZU, SDB AND LOUIE M. LACSON Word&Life Publications • teacherlouie1965@yahoo.com

Editor: Gerard S. Ramos • lifestylebusinessmirror@gmail.com

Life

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RETURNS AND REMEMBRANCES

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Monday, March 23, 2015 D1

Fringe benefits: Upgrade your accessories with the season’s favorite embellishment B A H

A FRINGE bag, like the BP tote shown here, can be worn casually or for a night out on the town.

ShopAtHome.com

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HEN it comes to fashion this season, live on the fringe.

A little bit Western, a little bit boho, fringe accents can be found anywhere, from handbags to boots to necklace accents and far, far beyond. We love fringe for its movement, texture and its simple but big impact. A little bit of fringe goes a long way in making a style statement.

Here ere are our favorite ways to wear fringe this season.

HANDBAGS THE easiest way to wear fringe is on your shoulder strap. Pick neutral or black (the adornment is dramatic enough; best to opt for a subtle hue) that

is highly adorned in leather or faux leather fringe, and you can spice up any outfit. A fringe bag can be worn casually or for a night out on the town.

subtle and sweet for spring with a pale pink with short fringe edging.

FULL METAL FRINGE

DON’T forget swimwear: A little bit of flowy fringe provides interest to an otherwise basic swimsuit this summer.

Fringe is flattering and can draw your eye to (ahem) certain parts that you may want to accentuate, too.

BEYOND ACCESSORIES

FRINGE doesn’t have to be soft, leathery or brown, as evidenced by statement accessories such as an edgy, metal fringe necklace. There are such fringed neck pieces that add in some glass crystals for extra bling and sparkle.

ON YOUR FEET

ACCENT YOUR TOP LAYERS

FRINGE has long been a staple for mocs, and perhaps the resurgence of moccasins is part of what ushered fringe back into the mainstream.

Today, you can find fringe on all styles of boots, sandals and even heels.

FROM cardigans to kimonos with fringe hems and accents, we love this way to add a layer of warmth—and style—to any outfit.

It’s a little more conservative than a fringe bikini, but still totally on trend. Pair a fringe kimono with simple jeans and a plain tee for an effortless and comfortable way to update your existing wardrobe.

AROUND YOUR NECK WR yourself in softness with a fringe scarf. Go WRAP

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THE CORPORATE HQ IS AN ANACHRONISM BusinessMirror

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Monday, March 23, 2015 E 1

B R K

EADQUARTERS is typically where an organization bases its senior-most leaders. The top floor, reserved for the CEO and his lieutenants, is where decisions are made. The next rung of leaders, often operating from different locales, have to converge on this center of gravity for reviews and the occasional reprimand.

The time has come for us to rethink this leadership concentration. Change today is exponential.

Technology has compressed time, costs and distance. Organizations have to be agile and responsive, and a vertical chain of command with annual rituals creates isolation, sluggishness and bureaucracy.

Leaders should be where the action is: where customers are and where decisions should be made.

Thus they become facilitators of action as it happens, not gatekeepers, reviewers or controllers. By distributing leaders to these critical points, an organization can shapeshift in accordance to the realities as they happen.

At GE, we have begun to use this approach to distributed leadership to increase our relevance to the marketplaces we serve or tap into. For instance, a few years ago, GE moved the base of its vice chairman to Asia, which pulled a lot more leadership

attention to the growth markets in that region. Distributed leadership allowed us to grow our presence from 100 countries in the world to more than 175 countries now.

We’ve also set up centers near proven talent pools. We opened the GE Software Center of Excellence in San Ramon, California, given the availability of talent and the need to firmly establish ourselves as a software company.

In a networked world, the center of gravity is where the customers are, and leaders have to be part of that engagement, lending the necessary muscle on the ground.

Consequently, where to position a leader is a strategic decision and should be determined by the place that will help the company achieve a competitive advantage.

Raghu Krishnamoorthy is GE’s vice president of executive development and chief learning officer.

Let your customers segment themselves by what they’re willing to pay B S M

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F you’re out to capture more value, one surefire tactic is to charge different prices to customers with different willingness-to-pay. Economists sometimes call this “price discrimination,” which sounds terrible.

But most of us frequently encounter forms of price discrimination that don’t bother us. For example, who begrudges discounts for senior citizens and students?

But charging different customers different prices for a similar product or service can be tricky. First, it’s not easy to identify customers according to their willingness-to-pay. Second, if you have different prices in the market for a similar product, there is no preventing your well-heeled customers from taking advantage of the lower prices, too.

Often, a marketer will try to scoop up sales from more price-sensitive shoppers (without cutting margins for its best customers) by launching a second, lower-end “fighter brand.”

But this often invites another serious problem—cannibalization.

There is an elegant solution to this problem, which I call “self-segmented fencing.” Customers reveal their willingness-to-pay through self-segmenting, which is to say they choose either the high- or lowprice offer; and customers with high willingness-to-pay are fenced off from the low-price offer. A fabulous example is couponing.

Grocers i nv ite c u stomers to present coupons to cashiers to get discounts on certain products at certain times. Many shoppers can’t be bothered to collect and redeem coupons. Therefore, they effectively choose to pay full price. Frugal shoppers are more likely to self-select to participate in the lower-price offer by using coupons. The coupon is the “ fence” to identify the segments and discriminate the price.

And it’s hardly random when the price of a round-trip plane ticket is much cheaper and there’s a Sunday between the outgoing and incoming flight. That fences off the majority of business travelers, even if they fly economy class.

Once you begin to see the elegant workings of self-segmented fencing, you may find opportunities to use it in your business. However, this strategy requires a good understanding of what customers want and how segments differ from one another. Value-based pricing requires a sophisticated understanding of what customers value.

Fences are most powerful if they give even as they take away. Premium customers should enjoy at least one important attribute that the low-priceseekers don’t get. The grass should never look much greener on the other side of the fence.

Positive teams are more productive B E S

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O make their teams more productive, most companies use the same old methods: strategic plans, goal-setting, streamlining operations and reducing inefficiency.

Others offer employee perks, such as on-site food, day care or gyms.

K im Cameron and his colleagues at the University of Michigan have discovered a better way to improve performance: A workplace characterized by positive and virtuous practices excels in a number of domains, according to their research published in the Journal of Applied Behavioral Science. Positive and virtuous practices include: n Caring for and supporting colleagues as friends n A Avoiding blame and forgiving mistakes n Inspiring one another at work

n Emphasizing the work’s meaningfulness n Treating one another with respect, gratitude, trust and integrity Cameron and his colleagues explain how positive practices benefit a company: n Increase positive emotions that broaden employees’ resources and abilities by amplifying their creativity. n Buffer against negative events like stress, improving employees’ ability to bounce back from difficulties. n Attract and bolster employees, making them more loyal.

Bottom-line benefits happen as well. “When organizations institute positive, virtuous practices, they achieve significantly higher levels of organizational effectiveness— including financial performance, customer satisfaction and produc-

tivity.... The more the virtuousness, the higher the performance in profitability, productivity, customer satisfaction and employee engagement,” Cameron says.

The researchers recommend how to implement positive practices: Leadership: A leader must stand by and exemplify the values he preaches. Steve Schroeder, founder and CEO of Creative Werks, a packaging company in Chicago, attributes much of his company’s success to a positive culture, including employee well-being and a supportive workplace.

Culture: Because culture trumps strategy in predicting performance, culture-change initiatives are also important. Jim Mallozzi, CEO of Prudential Real Estate and Relocation, consulted with Cameron during a difficult merger of two companies, at a time of severe financial losses.

Mallozzi found that implementing positive practices shifted the company culture and helped turn challenging times into great success.

Small steps: Small changes can produce large effects. Some firms asked all employees to keep gratitude journals, or to spend 30 minutes per day making a contribution to someone in need.

Retreats and workshops: In such programs, employees can think deeply and strategically about positive leadership. One suggestion: Make soft skills the focus of a workshop—mindfulness, personal mastery, connectedness and collective action.

Emma Seppala, Ph.D., is a Stanford University research psychologist and the associate director of Stanford University’s Center for Compassion and Altruism Research and Education.

Parental leave can’t just be for mothers B A W-C

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ANY companies and countries still seem to think that most children only have mothers. They talk about “maternity leave” and “flex time for mothers.” For others, parenthood has become a genderneutral concept.

In Sweden “parental leave” replaced “maternity leave” back in 1974. Men and women are allowed to share almost 70 weeks of paid leave. Men are obliged to take at least eight weeks of that, or lose the benefit. In Norway, it’s 14 weeks.

Germany and the United Kingdom have both passed similar policies. Italy offers new dads three

months of paid leave (new moms get five). South Korea allows partially paid leave for both parents for as much as year.

The complete outlier is the US, where there are zero days of paid maternity or parental leave. The only other countries on the planet without any paid leave are Lesotho, Swaziland and Papua New Guinea.

So the burden falls on individual companies to decide what to do, and their positions vary widely. For example, Vodafone just announced it will offer 16 weeks of maternity leave to all its new moms, including those in the US For the first six months after returning from maternity leave, new mothers can work 30

some older gentlemen running companies today. But it’s pretty obvious to the younger men running tech companies like Facebook, Reddit or Instagram. They all offer 17 weeks off to fathers.

We should certainly applaud companies for giving their US workers the same benefits the rest of the world has long taken for granted. But we should also recognize such mother-focused policies for what they are: cutting edge by 1970s standards.

hours a week at full pay.

Vodafone has been widely praised for the move. And it’s smart policy-making, since flexible companies are usually rewarded with employees who work far harder than their fixed hours in the office. As many managers have told me, the most efficient workers are mothers with kids.

The downside is that the move is aimed only at women. This reinforces stereotypical gender roles: women are mothers, and men are workers. But younger generations—including men—seem to actually want to spend time with their children. And many women actually want to spend time at work. This is hard to accept for

MONDAY MORNING

Stefan Michel is a professor of marketing and service management at IMD, in Lausanne, Switzerland.

Avivah Wittenberg-Cox is CEO of 20-first, one of the world’s leading gender consulting firms, and author of Seven Steps to Leading a GenderBalanced Business.

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PHOENIX Suns’ Archie rchie Goodwin (20) knocks the ball away from Houston ouston Rockets’ Josh Smith (5). AP

GREEN, CONLEY LIFT GRIZZLIES TO VICTORY

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EMPHIS, Tennessee—Jeff Green had 23 points and Mike Conley scored 21 with nine assists to lead the Memphis Grizzlies to a 97-86 victory over the struggling Portland Trail Blazers on Saturday.

Zach Randolph added 17 points for Memphis, which won its second straight. Marc Gasol had 13 points and Tony Allen finished with 10 points and 11 rebounds.

Damian Lillard led the Trail Blazers with 27 points and seven assists.

In Houston Eric Bledsoe had a career-high 34 points as the Phoenix Suns withstood a fourth-quarter charge by the Rockets to win 117-102.

Bledsoe scored 23 by halftime and surpassed his previous career best of 33 points, set earlier this season, on a free throw with about a minute remaining.

Donatas Motiejunas had 18 points for the Rockets and James Harden added 16 after scoring a career-high 50 in Thursday’s win over Denver.

Brooklyn’s Brook Lopez had 26 points and four blocked shots to lead the Nets over the slumping Indiana Pacers 123-111.

Bojan Bogdanovic added 21 points and five rebounds off the bench, and Deron Williams scored 17 for the Nets, who have won four of five.

George Hill had 18 points and nine assists for the Pacers (30-39), who lost their fifth straight.

A win for the Pacers would have put them in sole possession of eighth place in the Eastern Conference. Instead, the Nets (29-39) closed the gap in a crowded race for the final playoff spot.

The Detroit Pistons came back from a 19-point deficit to beat the Chicago Bulls, 107-91, after Reggie Jackson had 22 points, including 17 in the third quarter.

The Pistons trailed 72-53 with 7 minutes left in the third quarter, but got a combined 27 points and 13 assists from Jackson and fellow point guard Spencer Dinwiddie in the second half.

Detroit had already taken an 80-79 lead by the start of the fourth. In all, the Pistons outscored the Bulls 47-11 in a 16-minute stretch spanning the final two quarters.

Pau Gasol had 27 points and 10 rebounds for Chicago.

Stephen Curry bounced back from his worst shooting performance of the season to score 24 points, and Leandro Barbosa added a season-high 19 off the bench as the Golden State Warriors pulled away late to beat the Utah Jazz 106-91.

One day after shooting four-of-17 in a win over New Orleans, Curry went eight-of-18 from the floor against a Utah defense that had been the National Basketball Association’s (NBA) stingiest over the past three weeks.

Draymond Green added 15 points, six rebounds and seven assists for the Warriors (56-13), who have the best record in the NBA. Derrick Favors had 21 points and 11 rebounds for the Jazz. Utah lost for only the fourth time since the All-Star break. AP

TWOTIME MVP NASH ANNO NNOUNCES RETIREMENT FROM NBA

THANKS, STEVE! B J Z USA Today

LOS Angeles Lakers guard Steve Nash announces his retirement after a 19-year career in the National Basketball Association. AP

“I heard someone once say there comes a day when they tell us all that we can’t play anymore,” Steve Nash wrote. “We’re not good enough. Surplus to requirements. Too slow, maybe. When you’re a teenager with outsized dreams and a growing obsession, and someone tells you this ain’t gonna last forever, it’s scary. I never forgot it.”

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WO-TIME Most Valuable Player (MVP) Steve Nash’s National Basketball Association (NBA)) career is officially over.

Nash, who has not played for the Los Angeles Lakers this season because of nerve damage in his back, announced his retirement on “The Players’ Tribune.”

“I heard someone once say there comes a day when they tell us all that we can’t play anymore,” Nash wrote. “We’re not good enough. Surplus to requirements. Too slow, maybe.

When you’re a teenager with outsized dreams and a growing obsession, and someone tells you this ain’t gonna last forever, it’s scary. I never forgot it.”

When Nash, 41, was ruled out for the season in October, his retirement was expected but this puts finality on a remarkable and unexpected 19-year NBA career.

“The greatest gift has been to be completely immersed in my passion and striving for something I loved so much— visualizing a ladder, climbing up to my heroes. The obsession became my best friend. I talked to her, cherished her, fought with her and got knocked on my [expletive] by her.”

“And that is what I’m most thankful for in my career. In my entire life, in some ways. Obviously, I value my kids and my family more than the game, but in some ways having this friend—this ever-present pursuit—has made me who I am, taught me and tested me, and given me a mission that feels irreplaceable. I am so thankful. I’ve learned so many invaluable lessons about myself and about life. And, of course, I still have so much to learn. Another incredible gift.”

Nash averaged 14.3 points and 8.5 assists and was one of the best three-pointer shooters in NBA history, making 42.8 percent of his threes (ninth best all-time) and is No. 15 on the all-time three-pointers made list (1,685). He also shot 49 percent from the field and 90.4 percent on three throws, coming ever-so-close to the impressive 50-40-90 mark.

But without question, Nash was more than mere statistics. Born in South Africa, Nash grew up British Columbia and excelled in basketball, soccer and rugby.

But he was not recruited by major US universities to play basketball. Santa Clara took a chance on him, and he developed into a first-round pick.

The Phoenix Suns drafted Nash 15th overall in 1996, and he played two seasons with the Suns before the Dallas Mavericks acquired him in a trade.

Nash began to flourish with the Mavericks under Coach Don Nelson whose innovative offensive style matched perfectly with Nash’s offensive flair.

In his essay, Nash made sure to mention Nelson. “He insisted that I be aggressive. That growth was a turning point in my career,” Nash wrote.

Nash had a gift for seeing the court. His vision was amazing, head up, dribbling, reading the defense and creating—not only for himself but for others. He had that true point guard instinct: make your teammates better, and he did so with skill and creativity.

Nash was fortunate to play for two of the most innovative offensive coaches in the NBA. After six seasons with the Mavericks, he rejoined the Suns and played for Mike D’Antoni, whose up-tempo offense blended perfectly with Nash’s skills.

In 2004 and 2005 the Suns won 62 games and Nash averaged 15.5 points and 11.5 assists and won his first MVP award. The next season, Phoenix won 54 games and Nash again excelled with Amar’e Stoudemire and Boris Diaw. Nash also made sure to acknowledge D’Antoni.

Nash excelled in D’Antoni’s system, doing what was necessary: running the pick-and-roll with clever passing, driving to the basket with a uncanny ability to elude bigger defenders and making jump shots. Nash didn’t have outstanding athleticism but he combined skills and knowledge, giving him a unique panache.

“Mike D’Antoni changed the game of basketball,” Nash wrote. “There’s not many people you can say that about. No wonder I had my best years playing for him. His intelligence guided him to never overcoach, complicate or hide behind the game’s traditions. He deserves a championship.”

D’Antoni never won a title and neither did Nash. The Suns lost in the conference finals in 2005, 2006 and 2010.

Nash decided to play for the Lakers in the summer of 2012, and he had planned to help the Lakers and Kobe Bryant win another championship. That never happened either. Nash played in just 50 games in 2012 and 2013.

Nash wanted to play this season, the final year of his contract, but the nerve pain was too much.

Along with Vince Carter who played for the Toronto Raptors, Nash had a significant influence on the awakening of Canadian basketball. Today’s young Canadian stars grew up appreciating Nash’s game and realized his success was possible for them, too. Nash will remain involved in basketball as the general manager of Canada’s men’s national team.

“I will likely never play basketball again. It’s bittersweet,” Nash wrote. “I already miss the game deeply, but I’m also really excited to learn to do something else. This letter is for anyone who’s taken note of my career.

“At the heart of this letter, I’m speaking to kids everywhere who have no idea what the future holds or how to take charge of their place in it. When I think of my career, I can’t help but think of the kid with his ball, falling in love. That’s still what I identify with and did so throughout my entire story.”

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challenges facing the Philippines are mostly coming from external factors, namely, uneven global growth prospects and divergent monetary policies in advanced economies,” the central bank said.

In terms of growth, the central bank said the challenge for the country is how to keep up with the uneven growth prospects in other economies.

S “BSP,” A

LOCAL VENDORSDOMINATE SMARTPHONEMARKETIDC

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BusinessMirror

| MONDAY, MARCH 23, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

HE divergence of growth and policy directions in the global arena put the central bank in a bind, particularly in formulating monetary policies, to shield the economy from possible reversal in capital flows and exchange-rate pressures.

B L S. M

THANKS, STEVE! Sports

B B C

In the fourth-quarter report on economic and financial developments, the Bangko Sentral ng Pilipinas (BSP) said that, as the country continues to sustain its growth momentum in a relatively stable local environment, the main hurdles that the BSP is facing largely emanate from the global front.

“In the face of these global outlook and developments, the key

THE CORPORA CORPORAT TE HQ TE H IS AN ANA ANAC CHRONISM CHRONISM H

P.  |     | 7 DAYS A WEEK

CENTRAL BANK SAYS KEY CHALLENGES FACING PHL TODAY ARE MOSTLY COMING FROM EXTERNAL FACTORS

INSIDE

The compassionate healer

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MARTPHONE shipments to the Philippines rose by a hefty 76 percent to 26.8 million units in 2014, as more players enter the $272-billion economy due to the increasing popularity of budget-friendly mobile devices here.

The penetration rate of smartphones, according to research company International Data Corp.

(IDC), also grew to 47 percent in 2014, from a mere 24 percent the year prior.

Feature phones make up the majority of the mobile-phone market, but the past months saw both local and international vendors “increasingly shifting their focus toward smartphones.”

PESO EXCHANGE RATES n US 44.6610

Prices of smartphones continue to fall, as component prices drop and original equipment manufacturers (OEMs) are able to produce cheaper smartphones, hence, the increase in penetration rate.

“The narrowing price gap between smartphones and feature phones made smartphones more palatable to budget-conscious Filipino consumers, leading to the faster adoption of smartphones in 2014 compared to previous years,” IDC Philippines market analyst Jerome Dominguez said.

Smartphones priced at P4,000 accounted for more than 58 percent of the shipments to the country last year.

“Catching up on the smartphone craze, the Philippines is S “S,” A

COURTESY CALL Newly appointed Lao People’s Democratic Republic Ambassador to the Philippines Phoxay Khaykhamphithoune (right) pays a courtesy call on former Philippine Ambassador to Laos and ALC Group of Companies Chairman Emeritus Ambassador Antonio L. Cabangon Chua (second from right) at his office in Makati City. Joining them are BUSINESSMIRROR Publisher T. Anthony C. Cabangon (left) and the Laos ambassador’s wife, Sauddauone. NONOY LACZA

Mitsubishi set to tweak local assembly lineup

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ITSUBISHI Motors Philippines Corp. (MMPC) may stop the local production of its compact multipurpose vehicle (MPV), dubbed as the Mitsubishi Adventure, in view of the implementation of cleaner-fuel standards and the shift in consumer preference.

Orlando Alvarez Jr., MMPC executive vice president for operations, told reporters that the company is looking at the possibility of introducing a new car model in the Philippines. “[The Adventure] will probably be replaced as the Philippines is shifting to the use of Euro 4 fuel. It depends on instruction from [company] officials in Japan; but if you look at the market, the demand is in MPV, or the small car,” Alvarez said on the sidelines of the launch of the

Ayala is PHL’s best-managed company— ‘FinanceAsia’

new Mitsubishi Strada.

Mitsubishi currently assembles the Adventure and the L-300 locally.

Earlier, MMPC Vice President for Marketing Froilan Dytianquin said the company has yet to decide on whether to invest in the development of the Mitsubishi Adventure to make it compliant to the Euro 4 fuel standards or produce a new model altogether.

“The Adventure is only being offered in the Philippines, [so] upgrading it to meet Euro 4 fuel standards will be expensive, as it is limited to the domestic market,” Dytianquin said.

Currently, the Mitsubishi Adventure is only Euro 2-compliant. The company may offer Euro 2 engines only up to 2017, when compliance to

INANCEASIA, Asia’s leading financial publication, has named Ayala Corp. as the Best Managed Company in the Philippines in its 15th annual survey of top public companies in the region.

This is the second consecutive year that Ayala earned the top ranking among Philippine companies.

Ayala was also named Best for Corporate Governance in the Philippines for the fourth straight year and ranked second in Investor Relations.

Other listed companies in the Ayala group also figured prominently in the survey. Ayala Land and Globe were also among the country’s bestmanaged companies.

S “M,” A

S “A,” A

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n JAPAN 0.3697 n UK 65.8214 n HK 5.7558 n CHINA 7.2079 n SINGAPORE 32.1974 n AUSTRALIA 34.1132 n EU 47.5640 n SAUDI ARABIA 11.90833 Source: BSP (20 March 2015)

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Monday, March 23, 2015

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Southeast Asia makes vital push in banking integration

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UALA LUMPUR, Malaysia— Southeast Asian nations on Saturday wrapped up a key agreement allowing qualified banks to operate freely in each other’s countries in a push toward greater financial and economic integration.

The regional banking-integration framework is part of efforts to create an economic community by the end of the year, making the 10-member Asean a single market and production base.

Asean finance ministers and central bank governors said in a joint statement after a two-day meeting that qualified Asean banks can now operate with greater market access and be accorded flexibilities similar to those of domestic banks in the host country.

They said this will help accelerate the pace of regional financial integration and boost cross-border trade and investment.

“It took us five years from conception to operationalize this. This is very exciting. This is something concrete, it’s a major progress for Asean,” Malaysian central bank governor Zeti Akhtar Aziz told reporters.

Zeti said allowing qualified Asean banks to operate as a domestic bank across the region will help to deepen trade and investment links

BSP. . .

to “unlock potential growth” in the region.

Inter-regional trade is already on the rise, accounting for just over a quarter of Asean’s trade, she said.

No further details were immediately available on how a bank in one country can qualify as an Asean bank. Currently, regional countries place stringent limits on foreign banks to protect their domestic industry, including limiting foreign-equity participation and curbing their expansion and market access. AP

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In particular, as economic activity in the US continued to strengthen, Russia and China appear to be moderating. The central bank also noted that Japan and the euro area continue to have a modest growth.

“The Philippines is closely monitoring countries where trade ties are stronger, workers are deployed to, and tourists are expected to come from, such as the Asean, the US, Europe, Japan and China,” the BSP said.

Also, the divergence in monetary policy will cause market players to look for yields and push capital flows in and out of the country.

“Amid this divergence in monetary policy, the search for yield continues, which could either lead to more capital inflows to emerging markets [EMs], where yields remain generally higher; or capital outflows, as the appeal of US assets increases due to its economy’s favorable trends and eventual tightening of its monetary policy. Thus, EMs,

Mitsubishi. . .

Euro 4 fuel standards is mandatory. As majority of dieselfed vehicles in the country have Euro 2 engines, manufacturing Euro 4-compliant engines would be costly as oil firms have yet to expand the fuel’s availability.

Alvarez said Mitsubishi’s decision to develop a new model would also depend on the release of a much-awaited executive order (EO) operationalizing the Board of Investments’ Comprehensive Automotive Resurgence (Cars) program.

The Cars program details an incentive package which is expected to make cars produced in the Philippines more cost-competitive than those

including the Philippines, could face a reversal in capital flows and exchange-rate pressures,” the central bank said.

The BSP said the US Federal Reserve’s potential normalization of rates could make the country face tighter financial conditions due to the volatilities it may cause in global financial markets.

But despite the challenges, the BSP said the Philippines appears to be well placed to ride out the upcoming events, with some mitigating factors in place.

“The national government has ample fiscal space to accelerate infrastructure spending to help sustain the growth momentum of the economy. The government recognizes the need to address infrastructure gaps and has put infrastructure development as a top priority,”the central bank said.

“Remittances provide a significant source of funding for bank credit, which could provide a buffer against funding pressures, as well as help insulate domestic demand,” it added.

Continued from A1

manufactured in other Asean countries.

The Chamber of Automotive Manufacturers of the Philippines Inc. earlier estimated that producing cars in the Philippines is more expensive by $1,000. MMPC recently spent P3 billion on the acquisition and improvement of its Santa Rosa plant, which was previously owned by Ford. The factory can house 1,500 workers and has a capacity of 50,000 vehicles.

The company said earlier that it will invest another P2 billion for a stamping plant in the same area, after the government comes out with an EO for the Cars program.

Smartphone. . .

Catherine N. Pillas

Continued from A1

now the third-largest market for smartphones in Southeast Asia, coming after Indonesia and Thailand,” Dominguez added. The Philippines is also the fourth country in Southeast Asia to ship more smartphones than feature phones, after Singapore, Malaysia and Thailand. The third quarter of last year saw the onset of a new era when smartphone shipments to the Philippines outpace those of feature phones.

Although most smartphone vendors grew in volume terms in 2014, the local vendors are the ones that managed to gain market shares year over year. Share of local vendors grew from 49 percent in 2013 to 57 percent in 2014. Chinese vendors, on the other hand, slipped slightly from 16 percent to 15 percent, which accounted for the drop in the share of global vendors from 35 percent to 28 percent.

Three local smartphone vendors made it to the top 5 smartphone vendors in the Philippines, at least in terms of unit shipment, in 2014.

Cherry Mobile was the top smartphone vendor last year, while MyPhone and Torque ranked third and fifth, respectively.

“The success of local smartphone players is an offshoot of heavy marketing, celebrity endorsements and price-competitive offerings.

Branding is critical in the Philippines. The thriving local vendors are those that not only offer budget-friendly smartphones, but also produce strong ATL [above-the-line] campaigns and are endorsed by popular celebrities,” IDC Asia-Pacific Client Devices Group Senior Research Manager Daniel Pang explained.

Among the Chinese vendors, Lenovo has the biggest share in the Philippines, snagging the fourth spot in the top 5. Although gaining traction in other regions, Chinese vendors that just recently branched out of China like Oppo and Xiaomi have yet to gain ground in the Philippines, given their limited brand awareness. This may change this year as these new entrants ramp up their marketing efforts. Samsung still leads the pack of global vendors, followed by LG Electronics. As a newcomer to the smartphone market, Asus also gained considerable share last year. The decline of Sony and Blackberry contributed to the drop in the overall share of global vendors in the Philippine smartphone market.

www.businessmirror.com.ph

BusinessMirror Special Feature

Monday, March 23, 2015 A3

Economy

A4 Monday, March 23, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

BusinessMirror

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Recto to fellow lawmakers: Give DICT bill the final push

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By Recto Mercene

or Sen. Ralph Recto, the present Department of Transportation and Communications (DOTC) needs to be streamlined into a Department of Transportation so it could focus on fixing the nation’s transportation woes.

In the process, Recto said a separate department—to be called the Department of Information and Communications Technology (DICT)—should be created.

In his speech sponsoring the bill creating the DICT, the Senate President Pro Tempore said the units of the DOTC with functions and responsibilities dealing with communications will be folded into the new department.

The rest of the DOTC offices will comprise the new Department of Transportation, Recto said.

“The downsized transportation department can then concentrate

in solving our many transportation problems,” he said.

“It will now have the undivided attention and the narrowed mandate to ensure that trains run on time, run on new tracks, and not run off them; that the shipping industry is buoyant and ships afloat, literally; that jeeps don’t cut trips, buses don’t cut lives short, and transport officials don’t take a cut,” Recto said in urging his colleagues to approve Senate Bill 2686.

“It will have its hands full in regulating our almost 8 million motor vehicles and 1 million registered for-hire vehicles; in attending to the

needs of our 55 million air passengers and the 54 million who ride ships,” Recto said.

The DICT will be established by merging the Information and Communications Technology Office, National Computer Center, National Computer Institute, Telecommunications Office and National Telecommunications Training Institute.

To be attached to it—for policy and program coordination purposes only—are National Telecommunications Commission, National Privacy Commission and Cybercrime Investigation and Coordination Center.

All work related to cybersecurity, including the formulation of the National Cybersecurity Plan and the formation of a National Computer Emergency Response Team, which Recto described as “our IT Special Action Forces,” will be transferred to the new department.

One of the reasons a Dict must be formed is the need “to have a digital sentinel,” Recto said.

“We live in an era when terrorists don’t have to blast bank doors to do mayhem, but simply unleash a virus that could shred or suck out financial data. An enemy with a missile is as dangerous as one with malware,” the

senator stressed in his speech.

Forming the new Department of Transportation are the Land Transportation Office, Land Transportation Franchising and Regulatory Board for motor vehicles; The Civil Aviation Authority of the Philippines, Manila International Airport Authority, Clark International Airport Corp., Civil Aeronautics Board, Mactan-Cebu International Airport Authority, Philippine Aerospace Development Corp. for the air sector; Rail agencies like Philippine National Railways, Light Rail Transit Authority, North Luzon Railways Corp. and Metro Rail Transit; Maritime offices like Philippine Coast Guard, Philippine Ports Authority, Maritime Industry Authority, Cebu Ports Authority and Philippine Merchant Marine Academy.

They will be joined by the Office for Transportation Security, Toll Regulatory Board and Office of Transportation Cooperatives in the new department.

Downplaying concerns that the DICT will create red tape and expenses, Recto said, “it will not birth a huge bureaucracy, nor burn a deep hole in the taxpayer’s pocket.” “It will have the same, if not smaller, budgetary footprint, as what the affected agencies together have.

Not a single new centavo will be appropriated in starting up Dict.

It will just use the budget of offices to be abolished.”

“The idea is to create a small but smart work force. We’re limiting the number of undersecretaries and top officials. The creation of regional offices is not mandatory, but optional,” Recto explained.

Recto cited the growing role of ICT (information and communications technology) in pushing for

the creation of an agency dedicated to its growth and development.

“There are more cell phone subscriptions than Filipinos today—114 million accounts versus 105 million souls. Overall, four in 10 have access to the Internet,” he said.

“But more than these, ICT is putting people to work, taxes in government coffers, money in the economy, and hope in our country’s future,” he said.

Income from outsourcing—the business-process outsourcing, the call centers, the back offices, medical transcription, game development, creative process outsourcing, to name a few—by Recto’s projection, will reach $25 billion, or 8 percent of gross domestic products (GDP), next year. The sector employs a million Filipinos, more if ancillary services are included. “One in four jobs today are occupied by knowledge workers,” Recto said.

It is the third-largest source of dollars—after electronics and Overseas Filipino workers remittances—and “is a proven growth driver.” “Every 10-percentage-point increase in broadband penetration is said to boost the GDP by 1 percent,” Recto stressed.

“But to respond to the above challenges, we need a main server, so to speak, to spur ICT development, institutionalize e-government, and manage the country’s ICT environment and direction —and that is the DICT.” Previous bills creating the DICT had hurdled crucial phases of legislation in the past, like being passed by the House and the Senate, “only to flounder in the last minute for lack of time,” Recto noted. “This time, let us give it the final push. If we can bring this to the President’s table by June, then we are time-on-target,” he said.

Indra asks Comelec to disqualify rival group

By Joel R. San Juan

T

ECHNOLOGY provider Indra Sistemas S.A. has asked the Commission on Elections (Comelec) to reverse its earlier resolution declaring its rival, the joint venture of Safran Morpho and Comfac Corp. (Safran-Comfac), as having the lowest calculated bid for the Voter Verification System (VVS) for the 2016 national and local polls in the amount of P470.91 million.

In its motion for reconsideration filed before the Comelec-Bids and Awards Committee (BAC), Indra, through its lawyer Archivald Demata, urged the committee to declare Safran-Comfac ineligible to participate in the bidding due to the “absence, incompleteness or patent insufficiency of requirement”it submitted.

Instead, Demata said the ComelecBAC should declare Indra’s bid as the lowest calculated bid for the project, which has an approved budget of P727.2 million.

“In the instant case, it is submitted that the Honorable Committee should have rated the Joint Venture’s first envelope as ‘failed’ and should not have proceeded with the opening of the second envelope considering that the joint venture failed to include a requirement, or the requirement submitted is incomplete or patently insufficient,” Indra said.

The grounds raised by Indra against Safran-Compac include failure to submit the Voter Verification Machine, which will be examined by the BAC during the post-qualification; failure to submit a softcopy of the technical documentation, as well as a soft copy of the source code as required by Bid Bulletin 1 dated February 16, 2015; the Joint Venture’s Sworn Statement of All Ongoing and Completed Contracts did not indicate the contract amount and value of outstanding ontracts; the joint venture submitted a patently false and erroneous calculation of their Net Financial Contracting Capacity; the bid security was not executed in the proper form; and the Omnibus Sworn Statement was not executed in the prescribed form.

PPA net income up 15% in 2014 despite effects of port congestion

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he Philippine Ports Authority (PPA) recorded a 15-percent rise in net income to P4.26 billion in 2014, despite the negative effects of the port logjam in Manila.

Despite being higher by 16 percent versus the P3.67-billion target of the port agency, the growth is relatively slower than the rate in 2013, which saw the port body’s bottomline growing by 29 percent to P3.7 billion.

In the same comparative periods, gross revenues grew by 13.5 percent, to P12.57 billion from P11.07 billion, while total expenses rose by a slower 10 percent, to P6.47 billion from P5.89 billion.

Revenues from port operations jumped by 25 percent to P12.46 billion in 2014, from P9.99 billion the year prior. The figure is also 20-percent higher than the P10.41-billion target. Its counterpart, the Fund Management Income (FMI), however, declined significantly to P103.21 million, or about 16-percent below the 2013 level of P122.50 million.

“The considerable increases in almost all aspects of the revenue generation process of the agency can be attributed primarily to the increase in traffic volume at the ports despite the congestion issue involving the Manila ports,” PPA General Manager Juan C. Sta. Ana said. “The decrease in FMI, on the other hand, was due to the decline in interest rates on special and high-yield savings deposits and the termination of Bond Sinking Fund held by the Bureau of the Treasury from which interest

Santa Ana: “The considerable increases in almost all aspects of the revenue generation process of the agency can be attributed primarily to the increase in traffic volume at the ports despite the congestion issue involving the Manila ports.” income is also derived.”

Traffic in ports around the country also increased by 5 percent last year, with cargo volume reaching 211.20 million metric tons (MMT) as of end-December.

The rise in volume was driven by the large exportation of river sand, magnetite sand, crude minerals, nickel ore, limestone ore, clinker and slag and coconut oil and copra, fruits and fish, as well as the importation of fuel, coal, grains and fertilizers. This is relatively faster than the 2.97-percent growth posted in the same period in 2013.

In the same period under review, foreign cargo throughput grew by 7.45 percent to 133.29 MMT, wherein imports rose by 11.29 percent to 67.56 MMT, while exports inched up by 3.77 percent to 65.73 MMT. Domestic cargo volume was almost flat at 77.91 MMT in the full year of 2014.

Container volume also increased by 3.95 percent to 5.43 million twenty-foot equivalent units (TEUs) in 2014, from 5.23 million TEUs the year prior.

All aspects of containerized

operations went up modestly for 2014, despite the Manila port congestion and the slowdown in some areas of operations like Davao.

Foreign container traffic went up 3.42 percent to 3.29 million TEUs. Import boxes grew by 4.52 percent to 1.69 million TEUs, while export boxes inched up by 2.27 percent to 1.59 million TEUs. Domestic boxes also increased by 4.78 percent to 2.14 million TEUs from 2.05 million TEUs in 2013. The year 2014 saw the ports in Manila barging past their utilization levels, due to the rapid economic expansion and the imposition of a truck ban in Manila.

The regulation was lifted last September, making way for the partial decongestion of the terminals.

To avoid a repeat of the monstrous congestion at the ports in the capital, the government is mulling over the prospect of constructing a mega port outside Metro Manila. Trade Secretary Gregory L. Domingo earlier said this plan is currently being discussed by the government’s planning body that is chaired by President Aquino.

A6 Monday, March 23, 2015 • Editor: Gerard Ramos

Tourism&En

Business

Blooming but with a lot more in the bud

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B JT N

ORE than a city, Baguio is an escape.

Take the bustling lifestyle in Metro Manila as reference point, and it’s not hard to see why people, defeated by everyday stress or overcome with emotional torment long for this quaint, calming and temperate destination in Benguet province as their retreat of choice.

Not Tagaytay, because it’s too close.

Not Los Angeles, because it’s too far.

Baguio’s proximity is accessible but its distance offers just enough diversion.

It’s also the travel, which has become less of a butt-burner over the years with the development of the trio of North Luzon Expressway, Subic–Clark–Tarlac Expressway and Tarlac–Pangasinan–La Union Expressway gateways. It may also be the scenic view along the way that slowly transitions from urban landscape to rural calm to a combination of both when one arrives at the destination. How about its soughtafter climate that is unlike Philip-

pine scorchers, and the culture that remains very Filipino? Strawberries?

Ube jam? It could be very well the combination of all these.

But what better time to visit this place that offers a break from reality when it blooms into an enthralling fantasy land of sorts? Not on Christmas and summertime, despite its “title” as the Philippines’s “Summer Capital,” but in February, when it celebrates the Panagbenga Flower Festival—not just for a day or even a week but almost a month.

For its recently concluded 2015 edition, some members of the media made the trip up north, serviced by

PANABENGA 2015 opens with The Baguio Girls Scout of the Philippines

Avis and hosted, as usual, by the Forest Lodge at Camp John Hay. Panagbenga 2015, which drew 2 million visitors for its float-parade weekend, according to initial and unofficial count, was flowered with a colorful plot: It was the festival’s 20th edition and the first since the passing of its recognized father, lawyer Damaso E. Bangaoet Jr., or “Sir Damy”.

Instead of a show-stealing tribute, Baguio City Mayor Mauricio Domogan said during the festival’s news conference at the Forest Lodge that Banagoet’s family requested for a simple homage, instead. “After his death [last year], he needs and deserves to be given the honor, and we will do it in a simple way, as suggested by his family. [He deserves the recognition] not only as the father or the brain of the flower festival, but because he’s also a good citizen of our city, as well as the

municipality of La Trinidad, Benguet.”

As for the festival hitting the twodecade milestone, Domogan said Panagbenga has grown larger than they ever expected, as it has been substantially contributing to Baguio’s economy, both directly and indirectly, since it was launched, helping fuel the hotel industry, restaurants, groceries, souvenir shops and other establishments.

“During my first term as mayor in 1992, we were lucky at that time if we collected P15 million in business taxes. Now, we’re collecting as much as P250 million.”

He added that, aside from the major economic boost the festival gives to the city, it also upholds their tourism efforts. “The festival promotes the City of Baguio not only in the Philippines but also overseas as a tourism destination.”

Executive Committee Chairman of

Panagbenga 2015 Anthony de Leon clarified that the monthlong festival is actually more than the flower float parade. “There are more than a dozen of activities spread out over the five weeks,” he said.

Executive Committee Co-Chairman of Panagbenga 2015 Federico Alquiros noted that, for one, there’s the “Handog ng Panagbenga sa Pamilya Baguio” that features a handful of activities, like family painting sessions and kite-flying.

“A lot of [the Baguio residents] said we’ve become so big, it’s all full of tourists during parade days, so they just want to stay home and watch the parade on TV. Now, we have set aside a day before the parade for them to come at the Melvin Jones and celebrate Panagbenga. That’s their day, and that’s devoted to them,” he said.

“We’re building on that, and we’re

trying to build more events that are meaningful and sustainable. Now we have at least one day that is sustainable, and we’re building from that.”

Despite the high stakes in this year’s festival, it unfolded not without a few bumps.

From last year’s 24 participants in the Float Parade, certainly the most famous event in the festival, the number dipped to just 16 this year, sans the anticipated entries of the country’s two major networks famous for having their celebrities on parade. The Nlex float of the Manila North Tollways Corp. bagged the top honors this year.

Of the drop in the number of participating floats, de Leon said they “have never used quantity of participants as our objective in the float parade; it’s more about the quality of the floats. The World Flower Council of Judges is very particular that at least 90 percent of the floats are composed of flowers.”

Alquiros added that, while the number is down, all of the floats that participated were of high quality. “Nobody had a run-off-the-mill, so-so type of float,” he said.

The two said that, while they’re definitely looking to bring up the number of floats in the coming editions, they said that they will try to keep a constant number of 20 floats per year.

“We don’t want to have 50 floats; it will not fit in the athletic bowl to begin with,” Alquiros quipped. “There was a year when we had 33 and that ended at 2 in the afternoon, so that’s a bit

ntertainment

sMirror

COLORFUL costumes and beautiful smiles were all over Baguio City during the annual Panagbenga 2015.

TO go with its stunning aesthetics, the Manor Hotel’s float fused the themes of nature and culture as way of looking back on Panagbenga Festival’s 20 years.

THE Panagbenga 2015 float parade winner Nlex of Manila North Tollways Corp.

THE Manor Hotel bagged fifth place in the float parade this year.

much. Twenty to 24 is a good number to have. Maybe next year we can a bit more floats.”

The two said there are many factors in the decline, such as the price of putting up an entry. They said it typically costs companies about P500,000 to send a float—a figure that has ballooned over the years

SM City Baguio was among the businesses that participated in the float parade.

tourism@businessmirror.com.ph • Monday, March 23, 2015 A7

with the rising prices of flowers, manpower cost and other factors.

Aside from the decline in the number of floats, the street-dance competition—where the Mabini Elementary School, Baguio City National High School and the Ilocos Norte Regional School of Fisheries reigned supreme in the elementary,

secondary and open categories, respectively—has also been having its share of challenges.

While the organizers were successful in adding a new category, which is for high-school students, the fourth division they were targeting for the tertiary level did not materialize because the festival’s schedule coincided with school exams. “Education is a pri-

ority rather than this activity,” Domogan said. “Hopefully next time, we can have universities and colleges participate in the street dancing.”

He added that, while there’s much left to be desired in the festival, he saw upsides in this year’s edition of the Panagbenga. “It’s part of the homework and the challenge that is to be expected in a continuing activity. In

JOLLIBEE finished third in the float parade.

its totality, we keep saying that the street dancing today and yesterday compared to the previous ones are still an improvement. Same thing regarding the float parade. The participants may have decreased but the quality continues to improve.”

Domogan concluded that through

local festivals like the Panagbenga, he hopes more attention will be given to our own “tourism spots, rather than those outside the Philippines.

Malaking bagay ito sa ating ekonomiya, malaking bagay sa ating employment, malaking bagay sa ating development, especially in the tourism industry.”

TheElderly

A8

BusinessMirror

Monday, March 23, 2015 • Editor: Efleda P. Campos

news@businessmirror.com.ph

PAL’s inaugural flight to New York includes its first stewardess IN this March 1 photo, Berta Soler, leader of the Ladies in White dissident group, attends the group’s weekly protest march in Havana, Cuba. The daughter of a founding member of the Ladies publicly split with Soler on March 19, in the latest sign of division within the dissident group, which, a decade ago, was awarded the European Union’s top humanrights prize. AP/Desmond Boylan

Cuba: Late dissident’s daughter breaks with head of Ladies

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AVANA—The daughter of a founding member of Cuba’s Ladies in White publicly split with their current leader Thursday in the latest sign of division within the dissident group, which a decade ago was awarded the European Union’s top human-rights prize.

Laura Maria Labrada, whose mother, Laura Pollan, was the Ladies’ leader and public face before her death in 2011, criticized Berta Soler’s management and the expulsion of group members.

“I have decided going forward to withdraw authorization for Berta Soler to use my mother’s name or associate it with behavior that goes against the principles she always defended,” Labrada said at a news conference in her mother and stepfather’s home.

She added that Soler is no longer welcome at the house, which traditionally has been the Ladies’ meeting place and headquarters.

Calls to Soler’s cellphone rang unanswered on Thursday.

Her husband and fellow dissident, Angel Moya, said she was in Miami. The split came weeks after video surfaced online showing group members allied to Soler shouting down another longtime member, Alejandrina Garcia, during a December gathering at the home.

“Down with traitors!” ‘’She should leave!” and “We don’t want to hear her!” they yelled at Garcia, who had also disagreed with Soler’s leadership. The scene resembled the “acts of repudiation” in which pro-government counter-protesters sometimes accost Cuba’s dissidents, yelling revolutionary slogans and personal epithets.

“As long as I am alive I will never allow another situation like the one that happened here,” said Hector Maseda, Pollan’s widower.

Some Ladies in White living overseas had called for Soler’s resignation in response to the incident. Soler announced she

would submit her leadership to a referendum among members still on the island, a vote which she survived last week.

Labrada alleged that since Soler took over in 2011, members have been mistreated and unfairly expelled. Like Garcia, who was at the news conference, she also criticized the inclusion of men in their protests.

Labrada said she welcomes ongoing US-Cuba negotiations on restoring diplomatic relations and reopening embassies in each other’s countries, in contrast to Soler’s harsh criticism of President Barack Obama after the December announcement.

Labrada said she has the support of 100 Ladies in White, who are calling for an election, rather than a referendum, and the reincorporation of ousted members.

She also said she intends to start a nonprofit foundation named after her mother to help needy children, abused women and the elderly.

Wives and mothers of 75 activists jailed in a 2003 crackdown on dissent formed the Ladies in White over a decade ago to press for their loved ones’ release.

They became known for weekly marches along Havana’s leafy 5th Avenue on Sundays after Mass, wearing white and carrying gladiolas.

The last of the 75 prisoners were released in recent years, and nearly all the original Ladies have left the group.

With mostly new membership, they now protest to demand freedom for others they consider political prisoners and for democratic reform.

The government accuses dissidents of being traitors and “mercenaries,” who accept money from abroad to undermine the revolution and Cuba’s Communist system.

In 2005 the European Union awarded its Sakharov human rights prize to the group. AP

REBECCA Verzosa-Santos (second from right), the first-ever female flight attendant of Philippine Airlines (PAL), is greeted by (from left) PAL Chairman and CEO Lucio Tan, his wife Carmen, and PAL President and COO Jaime Bautista on March 20, during a gala dinner at the New York Hilton in Manhattan. RECTO MERCENE

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By Recto Mercene

EBECCA Verzosa-Santos, the Philippine Airlines (PAL) first flight attendant, remembers vividly that one of her jobs aboard a DC-4 on the way to Oakland, San Francisco, in 1946 was to pump the rubber mattresses for the 40 returning American GIs to sleep on.

“The four-engine airplane was noisy. It was not pressurized and subject to the vagaries of bad weather. The seats were bucket seats, were in military configuration, so the soldiers had to sleep on the floor,” she recalled.

Now 91 years old, “Becky” was among PAL’s most honored guests during a gala on March 16 at the New York Hilton to celebrate the airline’s return to New York, after an absence of 18 years.

After she was introduced to PAL Chairman Lucio Tan, Becky kissed the hand of “Kapitan,” as Tan is fondly called, and he returned the favor by kissing her hands, as well, followed by the kissing of hands, of Tan’s wife, Carmen.

“I am so proud that Mr. Tan is the owner of PAL. This is our airline, the Filipinos’ airline,” she said, getting emotional but still full of vigor, despite her age. The audience gave her a standing ovation.

Earlier, the BusinessMirror interviewed Becky at the sidelines of the festivity. She recalled that during her first flight across the Pacific onboard PAL, the first by any Asian airline, she was the only female among other flight attendants.

“We ate sandwiches and mostly canned goods, washed down by coffee from thermos bottles,” Becky said.

Her experience from the historic 1946 trip is a far cry from the Manila-New York flight that arrived at the JFK Airport in the early hours of March 16. This time, PAL flew the long-range B777.

The wide-body aircraft seats 36 passengers in business class and 218 in economy, and offers an advanced entertainment system and gourmet cuisine.

Verzosa-Santos lives in the Chelsea section of New York, and is practically a PAL institution, having served the airline for 41 years.

After graduating from the University of the Philippines with a bachelor’s degree in Education, she worked briefly in the US Air Force until learning from a coworker of PAL’s need for flight attendants, as the airline resumed

operations after World War II. She passed the test, which at that time required applicants to speak a foreign language and Tagalog. She speaks five local dialects and remembers her instructor, an American named Elaine Smith, a flight attendant of Trans-World Airlines.

She served on PAL’s first domestic flight after the war until her assignment on the historic Trans-Ocean flight.

Verzosa-Santos married Air Force Capt. Miguel Santos, whom she met on a blind date. They had three children, Fr. Cesar Santos, a priest; Gary, a mining engineer; and Rebecca, a teacher at the United Nations International School.

Among Becky’s many accomplishments was training the first cabin crew of Japan Airlines; writing PAL’s first manual for flight attendants; and initiating PAL’s baggage-claims department.

She earned an MBA from De La Salle University (where most of her classmates were military generals), won numerous awards and accolade, and is included with her granddaughter in a coffee-table book Wise Women.

Review of ‘senior citizens law’ sought

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AGAYAN DE ORO CITY— A lawmaker is asking Congress to review the Senior Citizens Act of 2010, in response to complaints that business establishments come up with ways to deny senior citizens from enjoying the benefits provided by law.

Rep. Rufus Rodriguez of Cagayan de Oro City said on Friday that his office has received complaints that restaurants do not extend the full 20-percent discount to senior citizens, but insist on “flat rates” for deliveries and takeout of foods.

Rodriguez said Republic Act (RA) 9994, or the Expanded Senior Citizens’ Act of 2010, has listed down the privileges that senior citizens shall be entitled to, which include

the 20-percent discount in restaurants, hotels, medical and dental services, among others.

Some establishments are also very strict in not granting the 20-percent discount if the customer cannot produce a senior-citizen identification card, even if the customer has other documents or identification cards stating his or her date of birth.

Rodriguez said there are also many other reported incidents, where establishments try to come up with so-called policies, so these establishments could evade the requirements to provide the benefits that the law entitles to senior citizens.

Even the Department of Trade and Industry (DTI) has already come up with an opinion that the 20-per-

cent discount given to senior citizens under RA 9994 is “over and above” the discount offered by an establishment for its membership or privilege cards, Rodriguez said.

Rodriguez said he filed House Resolution 1892 to direct the House Committee on Trade and Industry to conduct an inquiry on the above issue and thus serve notice to all concerned, particularly the DTI, and other agencies that could shed light and resolve the issue.

Rodriguez said the result of the inquiry would determine how to strengthen the senior citizens’ law in order to give it more teeth that would deprive all establishments the excuses and evade the provisions of the senior citizens’ law. PNA

The farmer and his cow Pabling Ramos, 78, of Candon City, Ilocos Sur, pulls his cow and his harvest of tobacco leaves on a sled in

his farm in Barangay Parioc.

MAU VICTA

news@businessmirror.com.ph

The Nation BusinessMirror

Govt relaxes rules for ‘express’ buses

SM Foundation to construct permanent houses in Ormoc

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RMOC CITY—The SM Foundation Inc. will build 200 permanent houses in this city as part of its long-term assistance to areas ravaged by Supertyphoon Yolanda (international code name Haiyan) in central Philippines. The 200 disaster-resilient houses will rise in a 2-hectare lot in Concepcion village, a property donated by Ormoc Mayor Edward C. Codilla.

Each house costs P250,000 each. The concrete houses can withstand 250 kilometers winds and a 7-magnitude earthquake, according to Codilla. This means SM Cares will spend P50 million on the houses alone. Each single-story house has a size of 20 square meters, including a 3-sq-m open area at the back, which also serves as kitchen.

The total cost of the project is pegged at P300 million to include site development that will feature a half-hectare football field, community center, main road and secondary roads measuring 6m and 5m wide, respectively, to be funded by donations from employees, contractors and tenants of SM Prime Holdings Inc. (SMPH).

Marissa Fernan, senior vice president of SMPH, led the groundbreaking of a housing project on March 18. Duty Free Philippines Cares contributed P6.6 million, good enough to build 12 units. Early this year, Codilla allowed the use of another 50-hectare land owned by his family for a housing project for 2,000 families. Priority beneficiaries of SM Cares Village will be families who are forced to live in danger zones. They would be required to demolish their old structures and to take part in a livelihood project.

Considering that the units will be equipped with modern amenities, like flushing toilets and aluminum sliding windows, the residents will be trained on how to take care of their new homes, according to Fernan.

Fernan added that residents will not own the homes; rather, they will just be allowed to occupy the units for 25 years subject for renewal, to prevent them from selling their rights or renting out the homes. The project is targeted to be finished in the third week of September. PNA

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B C M-C | Correspondent

OVERNMENT transport officials are relaxing traffic rules for buses participating in its express bus system (EBS) at the Epifanio de los Santos Avenue (Edsa).

Metropolitan Manila Development Authority (MMDA) Chairman Francis N. Tolentino also called on the 10 bus companies participating in the EBS to be “extra careful on the road” as they would allow “express” buses to use Edsa’s tunnels and flyovers.

At least 50 passenger buses are expected to ferry passengers from Fairview in Quezon City to stations at the Makati Central Business District (CBD) and at the SM Mall of Asia (MOA) in Pasay City.

Tolentino said the express buses using the lane nearest the center island would also be exempted from the number-coding scheme.

He added that traffic authorities would allow these buses to take inner lanes, drive over flyover roads and on the underpass lanes along Edsa.

Companies to field buses during the pilot test of the EBS include the

following: Kellen Transport Inc., Everlasting Transport Co., Naia Metrolink, Taguig Metro Link Bus Corp., ES Transport Inc., Jayross LS Tours Bus Co. Inc., Fermina Express Corp., Worthy Transport Inc., Gloren Transport Service and UBE Express, which will field an articulated bus.

Tolentino said the pilot run of the EBS will last for two months.

The EBS would have three routes, according to Emil Llavor of the MMDA Road Safety Unit.

The three routes include Route E1 (Fairview to Ortigas Avenue and Gil Puyat Avenue Light Rail Transit station with 20 bus units; Route E2 (Fairview to Ayala Avenue/Gil Puyat Avenue LRT station with 10 bus units; and Route E3 (Fairview to Ayala Avenue MRT station to SM Mall of Asia rotunda with 20 bus units).

Passengers intending to go either to the Makati CBD and SM MOA need

to board at the MMDA’s dispatch terminal in Fairview and at various terminals of the three routes.

The express bus has limited stops with two end points: Roxas Boulevard and SM MOA, Llavor said.

Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Winston M. Ginez said the especially tagged “Express Connect” buses would operate daily from 4 a.m. to 10 p.m.

Ginez said passengers would have to buy their tickets from conductors inside the buses.

The fares for the express buses would be the same as the ones now being charged by air-conditioned buses, he added.

Express buses are only allowed to stay for 20 seconds at the stations to pick up or unload passengers, Llavor explained.

Commuters can expect an express bus arriving at each station every five minutes (during peak hours) and every 10 minutes (nonpeak hours).

The project dubbed as “Edsa express bus” is a joint venture of the Department of Transportation and Communications, the MMDA and the LTFRB. The MMDA said the project aims to help decongest traffic along Edsa as motorists can now take the EBS system instead of driving their cars.

Monday, March 23, 2015

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MILF abandons camp in Iligan City–military

T

HE Moro Islamic Liberation Front (MILF) has already abandoned its camp in Iligan City for which it was recruiting members, officials of the Armed Forces of the Philippines (AFP) said.

The military reported that the camp, at Barangay Robongon in Iligan City in Lanao del Norte, has been deserted by its occupants, particularly supposed instructors of the MILF, whose sights, along with armed men, in several villages have “terrified” villagers.

The AFP has accused the MILF of using the camp as base to recruit indigenous peoples, including Higaonons. The military alleges the MILF promised to give 5 hectares of land to each recruit once the Bangsamoro basic law is approved.

The announcement of the abandonment of the camp came just days after Col. Gilbert Gapay, commander of the Army’s 2nd Mechanized Brigade, reported its existence, which it followed with the filing of a complaint with the Ad Hoc Joint Action Group (AHJAG) of both the government and the MILF peace panels. The military believes the camp, supposedly housing the 103rd Base Command of the MILF, was put up last year, “while the government is talking peace or after it has already signed the peace agreement with the Moro group, which is a violation of the accord.”

The peace talks or even the government prohibits the MILF from recruiting members, much more, set up additional camps other than those that are already in existence, a statement from the AFP said.

The talks also barred the group from coddling criminals, within its controlled areas. To note, the late Jema’ah Islamiyah (JI) bomber Zulkifli bin Hir, alias Marwan, was killed by police commandos within its area in Mamasapano, Maguindanao, where the JI leader has been living.

Gapay said on Thursday that Higaonon chieftains Diodato Abugan Sr. and Lantong Limunsudan asked them to dismantle the camp. The two were quoted by the military as the source of reports that villagers were afraid of the MILF members.

AFP Public Affairs Office chief Lt. Col. Harold Cabunoc accused the MILF of asking villagers to pay for P800 as membership fee. Cabunoc said the lands that are being promised in return for membership are also owned by the Higaonons, being classified as ancestral lands. Aside from recruiting members and setting up camps, Cabunoc also accused the MILF of intensifying manufacturing of weapons that included automatic rifles, rocket propelled grenade and sniper rifles. Rene Acosta

A10 Monday, March 23, 2015

Opinion BusinessMirror

editorial A dark side to Asean integration

I

T is said that the “devil” is in the details, and nothing could be truer when applied to the coming Asean integration.

We have strongly supported this initiative. The Philippines is moving as a prime driver for integration, as the nation pushes the Cebu Action Plan.

However, we must remember that the primary goal of Asean integration is financial and economic. The reality, though, is that when diverse nations start trying to gain a sort of one-size-fits-all set of benefits, there may be unintended consequences.

We favor Asean integration, because it will open up markets for Filipino companies and reduce the protectionist policies of the government. While we have made great strides in reducing protectionism here in the Philippines, we are still a relatively closed economy, as are all the other Asean members. We are also confident that our companies can effectively compete against any on the region.

The key to the European Union integration was not only the elimination of economic “borders” but a single currency, which is turning out to be their downfall. While Asean will not have a single currency, cross-border financial transactions could be a disaster, as has happened in Europe outside of the common euro currency.

The Swiss National Bank locked the Swiss franc exchange rate to the euro to protect its companies. In January it dropped the peg, and the Swiss franc has appreciated over 10 percent against the euro since then.

Finance Secretary Cesar V. Purisima is pushing for a regional tax-identification number for Asean as part of the integration. There may be some merit in that idea, but his justification worries us. Purisima said that it will provide better access to credit and finance, especially for small and medium enterprises; in other words, loans.

Lending rates were much lower in Switzerland than in Poland, and homebuyers took advantage of that fact, with nearly 40 percent (worth $36 billion) of all Polish mortgages denominated in Swiss francs. All was good, until the Swiss franc rose 21 percent against the Polish zloty.

One man saw his 150,000-zloty loan (payable in Swiss francs) taken out in 2008 now costing 500,000 zlotys due to currency changes. The same thing could potentially happen in Asean if cross-border loans are encouraged.

For example, interest rates are much higher in Indonesia than in the Philippines, with government 10-year bonds at 7.34 percent and 4.21 percent, respectively. An Indonesian business taking out a lower-interest rate, pesodenominated loan would make sense. But the Indonesian rupiah has depreciated by 4.9 percent since the beginning of 2015, raising the cost of the debt service by 4.9 percent.

Promoting cross-border borrowing in Asean could lead to major problems.

Remember the 1997 Asian financial crisis that was brought on by the Thais borrowing “cheap” US dollar loans, which suddenly became catastrophically expensive when the Thai baht collapsed.

Philippines retains Fitch investment-grade score Atty. Jose Ferdinand M. Rojas II

RISING SUN

F

ITCH Ratings, one of the “Big Three” international creditrating agencies, announced on Tuesday it is retaining the “BBB-, with stable outlook” investment-grade score it gave the Philippines in 2013, on the back of a solid external position and strong macrofundamentals.

Fitch forecast a 6.3-percent growth for the Philippine economy this year and 6.2 percent next year, based on the “steady inflow of worker remittances and growth of the business-process outsourcing [BPO] industry.”

Fitch’s grade for the country is one notch below those given by the other two of the Big Three, Standard & Poor’s and Moody’s Investors Service.

The agency, however, pointed out that Philippine governance standards (another term for levels of corruption in government and the private sector) are still below those of similarly rated countries.

While the Aquino administration has made major strides in reducing corruption, the country still scored low in the World Bank’s Political Stability and Ease of Doing Business metrics.

Fitch also said that low-income levels pu l led dow n economic gains. Filipinos earn, on average, $2,836 a year, compared to the

median of $10,654 for countries with similar ratings.

Finance Secretary Cesar V. Purisima said Fitch should look at the country’s strengths, including “robust growth and macroeconomic fundamentals built over the past four years [that] affirm that the Philippine economic story is defined by sustainability and resiliency.”

Bangko Sentral ng Pilipinas (BSP) Governor Amando M. Tetangco Jr. agreed, saying the Philippine economy “has reached a level of resiliency that is more comfortable than that of its peers, as a result of accumulation of sufficient foreignexchange buffer, a sturdy financial system and price stability.”

Meanwhile, signs point to a strengthening economy, as both the public and private sectors ramp up efforts to grow business and industries. Let us look at the two dominant drivers of the economy cited

by Fitch–worker remittances and the BPO industry.

While worker remittances slowed down at the start of the year—at $1.81 billion as of January, the lowest since February 2014—the BSP says that more data are needed to make a solid assessment, and that it still expect remittances to grow by at least 5 percent this year.

Global banking giant Hongkong and Shanghai Banking Corp.

(HSBC) says that the remittancegrowth slowdown could have been caused by several factors, among them, the three-day visit to the Philippines of Pope Francis, during which time it was difficult for people to send money.

HSBC analyst Trinh Nguyen said, “The deceleration reflects a seasonal contraction, and growth will likely normalize in the months ahead.”

On the other hand, the BPO sector posted an 18.7-percent revenue growth last year, or about $18.4 billion. Demand was strong from the global offshoring industry in the areas of health-care information management, voice and nonvoice sectors, global in-house centers, gaming and animation.

In fact, all sectors were said to be growing, despite challenges, and the industry is confident that it is ontrack to its goal of achieving $25 billion in revenue and 1.3 million in employment level by 2016. As of end-2014, the BPO industry employed 1.03 million people.

Let us now look at public initiatives, specifically the publicprivate partnerships (PPPs). The government recently announced a P50.2-billion PPP project for bid,

Doodlers unite–we live on the margins

By Gina Barreca The Hartford Courant/TNS

D

O you doodle? And what do you do now, if you don’t doodle anymore? I’m a serious doodler. It helps me think better: It helps me focus on what I’m hearing, instead of falling asleep or thinking of other stuff entirely. When I doodle, it’s like part of my brain can go outside for recess, while the rest of me sits up straighter and pays more attention.

In meetings, on the phone and at conferences, you’ll see me doodling.

My friend, writer and cartoonist Amy F. Sherman, puts it this way: “Anything that helps occupy the mind while it’s sorting through other stuff is good. Doodling is like white noise with a pen.”

My worry now is that as we become an increasingly paper-free society, The Doodle will become as extinct as the Dodo. We’ll have to create dimly lit rooms in museums to showcase scraps of paper where once people drew flying cars, dinosaurs, linked triangles or horses in order to explain to the next generation what doodling once was.

Has Googling replaced doodling?

I don’t think it’s an improvement.

The word “doodle” is related to dawdling, idling and frittering away

time; while essentially frivolous, is still not actually trivial. We’re creating something, however ephemeral.

It’s like whistling. We’re not inventing something for the ages and, yet, part of us is, indeed, engaged in the act of creation.

Surely, that matters, even if we have a limited and distinct repertoire?

For example, I draw houses, clouds, kites, hearts, flowers and kitty cats.

That’s it. I have remained, in terms of doodling, 6 years old.

It seems that not only are our doodle patterns formed early in life, but that they appear to be conventionally gender-specific. A friend and former student named Hanley admits that as an inveterate doodler now in his 30s, he still draws “ghouls and goblins, mostly macabre stuff.”

As an undergraduate, Hanley would usually sit in one of the front rows of my classroom. When I’d see him drawing grotesque eyeballs in the margins of his notebook, I knew he was invested in the work under discussion. “Oh, that kid’s drawing a UFO. I must be onto something here.”

That’s the kind of pedagogy they don’t teach you in graduate school.

I also knew that doodling was an aid to, and not a distraction from, concentration because I have my own notebooks going back to high school.

The only clues about my imaginative life appear in the margins: In 10th grade I was all about imitating the artist Peter Max when drawing my clouds and flowers. I even carried colored Flair pens in my knapsack (which in those days were military surplus) to enliven my marginalia.

I drew intricately patterned hearts—some broken, for full sentimental effect—next to detailed notes on metaphor and simile in Romeo and Juliet. I illustrated lyrics from songs by Joni Mitchell (“But now old friends are acting strange...”), Janis Ian (“Those of us with ravaged faces...”) and John Denver (“You fill up my senses...”) as

the Regional Prison Facilities project that seeks to decongest crowded facilities, including the New Bilibid Prison.

The project, to be located in Fort Magsaysay, Nueva Ecija, seeks investors to finance, design, build and maintain the 26,880-inmatecapacity facility for 23 years.

Other PPP projects that have been recently announced include five airport projects in Laguindingan, New Bohol, Iloilo, Davao and BacolodSilay. The National Economic and Development Authority also recently approved six infrastructure projects, four of them PPPs, for “a more reliable and efficient transport-infrastructure system.”

These are the Panguil Bay Bridge project, a couple of railway projects—Phase 1 of the North-South Commuter Railway Project and the North-South Railway Project—South Line—and the expansion of three expressways: the Tarlac-Pangasinan-La Union Expressway; the North Luzon Expressway-South Luzon Expressway connector project; and the CaviteLaguna Expressway Project.

Based on these and other indicators, the Philippine economy looks robust and will continue to grow, hopefully, at a rate even higher than that predicted by Fitch.

There is no lack of trying, as all hands are on deck to bring about inclusive growth and a brighter future for all Filipinos.

Atty. Jose Ferdinand M. Rojas II is the vice chairman and general manager of the Philippine Charity Sweepstakes Office.

I copied down information on plate tectonics and soil erosion. Who needed an iPod when you could hear the songs in your head as you reviewed your notes from earth science?

Naturally, I also wrote out what I thought my married name would look like. I doodled so many versions of “Mrs. Gina So-and-So” that I lost my appetite for the experience; when I did marry, I did not change my name.

I did well in school; doodling helped. Will others lose out when we go digital?

I’ve heard of programs that permit a kind of virtual doodling via the computer screen, but I can’t imagine that it has the same visceral or psychological implications.

It’s the scratch of pencil on the back of an envelope, the ink bleeding through the edge of the cocktail napkin or the back of a receipt, the pen’s circles at the bottom of the page that help make the connection with the part of yourself that usually hides in the shadows and emerges only in your mind’s peripheral vision. The sound of the instrument on the page brings it out.

It’s not only Yankees who should doodle. Get thee to the margins.

Opinion BusinessMirror

opinion@businessmirror.com.ph

A deal India’s farmers can’t refuse

The chain does not bind

A general is not obligated to bring in every officer and his uncle and listen to their advice.

The suspension of former PNP chief Alan Purisima for graft did not erase his unique understanding of the mission he planned. He could still advise, and subordinates could listen, when he couldn’t strictly speaking command.

The exclusion of an Army that cannot keep secrets and would not fight proved Purisma right. Armed Forces Chief of Staff Gen. Gregorio Pio Catapang confessed that a vigorous rescue of the Special Action Force (SAF) in Mamasapano would trigger

fighting all over Mindanao. To save the peace talks, Major General Edmundo Pangilinan would not fire even a phosphorous round—even if phosphorous scattered the Moro Islamic Liberation Front (MILF) in previous engagements and stopped the fighting. The Philippine Military Academy valedictorian just said, “War is not the answer” even if “theirs is not to reason why, theirs is but to do and die,” quote Tennyson poetic summation of the soldier’s life and death. An Army that declares fighting to be its last priority has no deterrent, offensive or defensive value.

It was not wrong for the Presi-

dent to keep Purisima in the loop. A suspicion of graft does not erase the experience of command. He planned the operation. The next time the Ombudsman orders any serving officer suspended on a charge of graft it might want to limit the suspension to his authority to sign off on purchases but not over military operations.

Purisima and former Director General Leonardo Napeñas were not wrong to delay telling an Army that is a chatterbox about the operation; at least not until it was well underway. The US armed forces did not know that one US president had sent a hostage rescue mission to Iran (it failed) and another sent an assassination squad into Pakistan (a roaring success that perhaps Noynoy had in mind). Under the Armed Forces of the Philippines, Oplan Sagittarius was leaked to Ninoy and Oplan Double Strike was leaked to me, not that we could do anything to stop martial law. But a leak of Oplan Exodus threatened the safety of the SAF as in fact it took all of their lives but one.

When the call for it was made in the early hours, artillery fire risked collateral damage to the SAF but, going by previous encounters, it would have ended the fight. The alternative taken was to let all our men die.

Judged by the Manual of Operations, Napeñas’s expertise turned out to be less than the mission required but it was enough to carry it out. There is nothing to show that the Army would have done better after refusing to take part in past missions of the kind.

thirds in 1964 to about one-third of the budget today. This spending is on course to drop to less than one-quarter of the budget within the next 10 years.

The congressional budget has the most direct impact on next year’s discretionary spending. It establishes the maximum level allowed for defense and discretionary domestic programs.

Congress should certainly eliminate bad discretionary spending that benefits special interests at the expense of the broader public, although this spending isn’t driving the growing debt crisis the way entitlement spending is.

Congress’s budget is especially important in its ability to establish new entitlement spending and tax policies. Since the 1970s, Congress has had a fast-track mechanism known as “reconciliation” to enact legislation that reduces the deficit with a simple majority vote in the

Senate. Because reconciliation is protected from the filibuster, it is a key mechanism to address outof-control entitlement spending.

Without the filibuster, it’s easier, for example, to repeal Obamacare and bring down interest costs by controlling the debt.

Entitlement programs, such as Medicare, Medicaid, Obamacare and Social Security, are responsible for more than half of the projected growth in spending over the next decade. Including what the federal government is expected to pay to service the massive and growing debt, the share of projected spending growth due to these areas of the budget rises to 85 percent by 2025.

Unless Congress gets control of entitlement spending and puts the debt on a downward path, it will be impossible to prevent government from expanding and choking off economic growth and depressing personal incomes.

On the tax side, Congress can make the US a more attractive place to do business by lowering America’s corporate tax rate (the world’s highest). And it can unleash economic growth by simplifying the needlessly complex incometax system to reduce distortions to saving and investing. These pro-growth tax policies will have the added benefit of getting people back to work.

Only when the House and Senate agree on a concurrent budget resolution can reconciliation effectively be evoked to reduce the deficit and to make Congress live within the confines of the budget plan. With gover ning majorities in both chambers of Congress controlled by the same party, the chances for such an agreement are higher.

On the most fundamental level, the budget enables Congress to establish a comprehensive governing

By Dhiraj Nayyar

Teddy Locsin Jr.

Bloomberg

I

NDIAN Prime Minister Narendra Modi has a fight on his hands. A newly rejuvenated opposition has joined with populist crusader Anna Hazare—the man who brought the previous government to its knees over the issue of corruption—and is blocking proposed changes to a draconian land-acquisition law. Modi has few appetizing choices.

He could keep the measures going by executive order for another six months (the first such ordinance expires on April 4). But few companies are likely to invest based on such f limsy reassurances.

Or, if he’s in the mood for a scrap, Modi could call a joint session of both houses of Parliament and use his overall majority to ram through the bill. That would fuel charges that the government is antipoor, though, and would alienate much of the 50 percent of India’s population that depends on farming for a living.

Here’s a third idea: Instead of amending the current law, why not ask Parliament to repeal it entirely?

Let land be bought and sold openly and transparently. There’s a reason governments get involved with land acquisition—so that holdouts can’t unreasonably stall important projects by demanding exorbitant prices or simply refusing to sell. But there’s no reason the central government has to take the lead role in resolving those cases. Instead, each of India’s 30 states could define its own eminent-domain rules, with those interested in development competing to make their regulations more efficient and attractive to industry.

The existing law, passed by the previous government in 2013, makes the process of acquiring land for industrial projects unnecessarily expensive and timeconsuming. Companies interested in a block of land have to obtain the consent of at least 70 percent of landowners and wait for bureaucrats to conduct a social impact assessment. They must also pay quadruple the market price in rural areas, and double in urban areas. Modi’s trying to lift the first two conditions for projects that involve national security and defense, rural infrastructure (including electricity); industrial corridors, public-private partnership projects (where the ownership of land vests with the government); and affordable housing for the poor. That would help unblock at least some of the estimated $400 billion worth of projects that are stuck waiting for clearances.

The only really troublesome aspect of the proposed amendments is the elimination of any need to obtain consent from landholders. In fact, there should almost always be a reasonable, marketdetermined price at which owners are willing to sell.

The idea that farmers want to cling to their land at any cost is silly. Most plots are too small to farm at scale and profit.

The half of India’s work force employed in agriculture produces just 15 percent of gross domestic product.

What farmers really need is the ability to sell to the highest bidder; currently, fertile farmland can only be sold for agricultural purposes. Even more important, they need clear title to their land.

Under current law, sale deeds aren’t enough to guarantee title; only a chain of documents linking the land to its original owner will suffice. Government landholding registers barely exist. Where they do, they are rarely updated or computerized and are essentially useless.

Without clear proof of ownership, landowners have good reason to fear being cheated out of proper compensation. Some states, including Modi’s home state of Gujarat and the southern state of Karnataka, have done a decent job of computerizing land records and clearing titles. Those examples must be replicated elsewhere.

Of course, for many farmers, land is the only asset they possess; it’s hardly surprising they might be reluctant to sell without an alternative income stream.

Corporations and the government can help by investing in the education and training of farmers and landless laborers in the vicinity of planned projects. In theory, the new factories going up should offer better-paying job opportunities, while new townships should offer more efficient infrastructure. The promise of a better life for themselves and greater opportunity for their children would be the best incentive for farmers to sell.

At this point, an emboldened opposition would probably seek to stymie any attempt to repeal the current law, too. But Modi’s in a tight spot.

He needs a less restrictive landacquisition policy in order to revive investment and infrastructure spending, while politically, he can’t afford to alienate India’s poorest citizens. If he can’t win this fight, maybe he should at least try to shift the battleground.

Why the budget matters

By Romina Boccia

The Heritage Foundation/TNS

V

OTERS often wonder if Congress can ever get spending under control. Well, both the House and Senate have introduced their latest budget blueprints, so we’ll soon know if they plan to keep kicking the can down the road—or get serious about reform.

Why care about the budget? Because it’s the only legislative document through which Congress addresses the entirety of the federal budget: all spending and taxes.

With more than $18.1 trillion in national debt, and an annual deficit projected to grow from more than a half a trillion dollars last year, to over a trillion dollars by the end of the decade, the budget presents a critical opportunity for Congress to address the key drivers of spending and debt.

Congress should put the budget on a path to balance to reduce debt

and enable economic growth to raise living standards—for all Americans.

In a typical year, Congress addresses only one-third of the federal budget as part of its so-called discretionary spending bills (meaning the part of the budget not set to rise automatically, such as Social Security and Medicare). But this discretionary budget, which covers defense and most domestic programs and agencies, has become smaller over the years, both as a share of the economy and of the budget.

Discretionary spending’s share of the federal budget fell from two-

Monday, March 23, 2015 A11

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Free fire

HEN the report of Philippine National Police (PNP) Board of Inquiry says that the President violated the chain of command, it only means he chose not to follow it—and that is not a crime. The chain of command is a convenience; it is not a constraint on presidential command. If it did legally, then that would be the end of civilian supremacy over the military. Ideally, presidential commands come down the chain of commanders, enriched at every link by their experience or impoverished by their ignorance and subverted by interbranch rivalry. The chain does not go up to shackle the President; it only goes down. Every officer and soldier owes him direct obedience without having to pass his loyalty up through the chain of command. We regularly ignored the chain of command fighting coups for Cory. The President can skip links and entrust to one, instead of another, a special military job that he wants done.

Napeñas could have planned it by the book. But if he had reasons not to—i.e., telling a leaky Army of the plan well ahead of time and alerting a peace panel partial to the enemy of a mission to snatch the terrorists hiding in its camp—the only alternative was to cancel the mission forever and keep the friends of Teresita Deles and Miriam Coronel-Ferrer happy harboring a trinity of monsters making bombs to kill thousands of civilians in Metro Manila.

Napeñas could have picked better terrain—one with high ground to which the SAF could have repaired and held it until the help there was no intention of sending had come.

But Marwan, Usman and a third turbaned fellow would not be there. The Cordilleras has high and easy places to defend but if he attacked there all he could gather was marijuana.

Napeñas sidestepped two backup plans. The first required telling the Army to coordinate in the sort of mission they disliked. Indeed, after being told of the mission the Army opted to just let all the men die. The second required alerting a peace panel thick as thieves with the MILF—and lauded loudest by pro-Malaysian journalists in the Philippine media—of a mission, to take out their terrorist darlings. But if the peace panel was told it would still have needed at least six hours to stop a massacre that was completed in half the time. Back-up plans like these amounted to canceling the mission—or losing all the targets and 380 SAF walking into a trap.

philosophy and to reassert the power of the people’s body against the executive. According to budget committee veteran Patrick Knudsen, “Budgeting is an essential act of governing.”

Through the budget, Congress can reallocate spending in accordance with constitutional national priorities and free the state, local and private spheres to handle functions that are better and more legitimately suited to their level.

Congress can also rearrange current spending priorities to better meet the national interest.

The budget is a critical tool in Congress’s legislative arsenal to correct the current fiscal course.

It’s time to put the budget on a path to balance to protect Americans against undue debt and tax levels, and to unleash economic growth.

The budget affects us all. Lawmakers should act like they understand that.

2nd Front Page BusinessMirror

A12 Monday, March 23, 2015

PHL’s external debt still at prudent levels T

By Bianca Cuaresma

he Philippines’s external debt “remained at prudent levels,” amid changes in the reporting framework of this key economic indicator at the end of 2014, the Bangko Sentral ng Pilipinas (BSP) reported.

External debt—or all types of borrowings made by local residents from non-Filipino sources—of the country stood at $77.7 billion as of end-2014, based on the new framework for the reporting of the country’s external debt statistics.

The new framework is part of the BSP’s initiatives to align its statistics and methodologies with international standards.

This reflects an $800-million decline from the revised end-2013 external debt of $78.5 billion. The end-2013 external debt was revised to fit the revision to the new frame-

work implemented in the latest reportage of external debt.

“Even with the higher debt level brought about by these recent enhancements or modifications, debt indicators were observed to have remained at very prudent levels,” BSP Deputy Governor for the Supervision and Examination Sector Nestor Espenilla Jr. said.

Compared to the revised external debt level in the previous quarter, however, the end-2014 is higher by $600 million. The end-September external debt ratio is at $77.1 billion.

“The increase was due to net inflows of

$2.2 billion, mainly from accounts of private banks, reflecting brisk business activities arising from positive domestic developments,” the central bank said.

“The upward impact of these inflows was partially offset by the following factors: [a] negative foreign-exchange revaluation adjustments [$1.1 billion] due to strengthening of the US dollar against most third currencies, particularly the Japanese yen; [b] higher investments by residents in Philippine debt papers [$446 million]; and [c] past periods’ adjustments due to audit findings and late submission of data by reporting parties [negative $110 million],” the BSP explained further.

In terms of debt profile, meanwhile, the external debt portfolio remained predominantly medium- to long-term (MLT) in tenor, with MLT accounts accounting for 79.1 percent of total.

This, according to the central bank, keeps funding requirements for debt servicing at manageable levels, since payments are spread out over a longer period of time.

www.businessmirror.com.ph

2 projects worth $457M up for World Bank nod

By Cai U. Ordinario

T

wo Philippine projects worth $457 million may be approved for World Bank funding this year.

The projects are the $450-million Philippines Social Welfare Development and Reform Project (SWDRP) II and the $7-million Studies for Sustainable Flood Management (SSFM).

The project information document obtained from the World Bank showed that the SWDRP will be financed by a loan from the Washington-based lender, while the SSFM will be financed via grant.

The SWDRP, which is targeted for World Bank Board approval in September 2015, will have four components. The first component is the financing of the Support to the Pantawid Pamilya ng Pilipinas Program or the country’s Conditional Cash-Transfer (CCT) Program, which is estimated to have a tentative allocation of $350 million.

This component will cover the CCT for poor children 0 to 18 years of age across the Philippines, which will account for $345 million of the loan. The remaining $5 million will be used to support the National Project Management Office of the CCT Program.

The second component of the project aims to increase the employability prospects of CCT beneficiaries. The tentative allocation for this component is $80 million.

This component intends to help CCT graduates and beneficiaries transition from school to work through an integrated package of labor-market orientation, life skills and certified technical and vocational training.

The World Bank said the lion’s share, or $75 million, of the amount allocated for this component will be spent for Sustainable Livelihood Program Training Grants, and the remaining $5 million will be for implementation support for the SLP. The third component of the project will support the Department of Social Welfare and Development (DSWD) in disaster and emergency response. This component has a tentative allocation of $1.5 million.

“The project would support the enhancement of the automated system that would ensure efficient collection of correct and real-time data to systematize and rationalize disaster preparedness, relief and early recovery,” the document stated.

The last component of the project is the support for DSWD Policy and Institutional Capacity Development. The tentative allocation for the project is $18.5 million.

The component will help the DSWD in its the implementation of policies relating to its projects and social protection in general. The project will finance expert services, knowledge transfer, training, and software development and informaction and communication technology.

Meanwhile, the World Bank estimates that the first grant for the SSFM will be granted by December 2015.

Based on a project information document, the project intends to support the plan to improve flood management and resilience in the Greater Metro Manila Area.

The project has two components—the preparation of feasibility and design studies for priority flood management infrastructure—with a tentative allocation of $6.8 million. Another component is the project management and administration, which will receive a tentative amount of $0.2 million.

“The feasibility studies will review, as needed, the various options for flood-management improvements in the study areas, including a quick assessment of related social and resettlement impacts in terms of magnitude, costs and risks, to be followed immediately by design studies and preparation of tender documents of the selected options,” the World Bank said.

The projects are aligned with the World Bank’s five-year Country Partnership Strategy (CPS) in the Philippines, covering the period of 2015 to 2018. The CPS intends to focus on five key areas: transparent and accountable governance; empowerment of the poor and vulnerable; rapid, inclusive and sustained economic growth; climate change, environment and disaster-risk management; and peace, institution building, and social and economic opportunity.

The CPS is a joint strategy of the three members of the World Bank Group: the International Bank for Reconstruction and Development, also known as the World Bank; the International Finance Corp. focused on the private sector in developing countries; and the Multilateral Investment Guarantee Agency, which provides political risk insurance to private-sector investors and lenders.

D.O.F. EASES AIRLINES’ IMPORT REQUIREMENTS

T

he Department of Finance (DOF) has exempted airline companies from certain documentary requirements on the importation of aircraft, related equipment, machinery and spare parts.

The DOF issued Department Order (DO) 28-2015, which exempts certain importations by airline companies with a congressional franchise from obtaining the required importers’ clearance certificate.

“Airline companies granted a with congressional franchise may be exempted from obtainingthe importers clearance certificate from the Bureau of Internal Revenue [BIR], prescribed under DO 2-2014, as amended

by DO 18-2014, on specific importation of aircraft, equipment, machinery and spare parts, on the basis of overriding and paramount public policy, public safety and public necessity considerations,” the new DO said.

DOs 12-2014 and 18-2014 had earlier

Ayala. . .

imposed the requirements upon all importers and customs brokers to secure an accreditation with the BIR before they can even be accredited by the Bureau of Customs (BOC) as importers and customs brokers.

Airline companies with a congressional franchise would still have to submit certain documentary requirements for accreditation with the BOC, and must remain compliant with other existing regulations.

Those availing of the exemption must also provide a certification from the country’s civil aviation authority on the necessity of the importation in view of public safety.

The Customs commissioner shall only apply the exemption from obtaining the BIR importers’ clearance certificate upon compliance with said requirements, and shall submit to the DOF a monthly report on every importation made that has availed of the exemption. David Cagahastian

Continued from A2

Notably, Ayala Land topped the investor relations category and was ranked second overall and for corporate governance. Globe was named fourth best-managed company and ranked fourth for investor relations and seventh for corporate governance.

Ayala, Globe, Ayala Land and Manila Water were cited among Philippine companies most committed to a good dividend policy.

The country’s best CEOs were Lance Gokongwei of Universal Robina Corp., Ernest Cu of Globe and Napoleon Nazareno of Philippine Long Distance Telephone Co. (PLDT).

The country’s best CFOs were Jaime Ys-

mael of Ayala Land, Alvin Lao of D&L Industries and Delfin Gonzalez Jr. of Ayala.

Other companies that landed in the Top 3 of the magazine’s “best managed” categories were URC, Metro Pacific Investments Corp. and PLDT. D&L Industries was named best mid-cap company and Concepcion Industrial Corp. led the small-cap category.

The 15th annual FinanceAsia poll, published online on March 19, received responses from over 250 portfolio managers and buy-side analysts worldwide, who cover listed companies in Asia.