Businessmirror may 24, 2015

three-time rotary club of manila journalism awardee 2006, 2010, 2012

U.N. Media Award 2008

BusinessMirror

www.businessmirror.com.ph

A broader look at today’s business

n Sunday, May 24, 2015 Vol. 10 No. 227

BSP doubles projection for 2015 BOP surplus week ahead

ECONOMIC DATA PREVIEW Foreign exchange

n Previous week: The local currency moved to appreciate on average from May 18 to 22. In particular, the peso hit 44.49 to a dollar on Monday, which decelerated to 44.51 to a dollar and 44.6 to a dollar on Tuesday and Wednesday, respectively. Thursday’s trade saw the biggest improvement at 44.49 to a dollar, with the week ending at 44.545 to a dollar. The total treaded volume during the period was at $2.402 billion, lower than the $3.38 billion in the previous week. The average value of the peso is at 44.527 to a dollar during the week, stronger than the 44.641 to a dollar average in the previous week.

n Week ahead: Traders in the Philippines’s foreign-exchange platform are seen to move with caution in the first few days of the week, as markets await the economic-growth data both from the Philippines and the US set to be released within the week.

GDP (Q1)

Thursday May 28

n Previous quarter: The local economy grew at a robust pace of 6.9 percent in the last quarter of 2014, putting the average growth of the country for the entire year at 6.1 percent—below government expectations but above the average growth of the region. The robust performance of Industry sector, particularly by Manufacturing and Construction, and supported by the Trade, Real Estate, Renting and Business Activities, and Transport, Storage and Communication, boosted the fourth-quarter performance and paved the way for the annual gross domestic product to post a growth of 6.1 percent, according to the Philippine Statistics Authority (PSA).

Continued on A2

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By Bianca Cuaresma

HE country’s balance of payments (BOP) is seen to significantly improve earlier than expected this year, and remains a key source of resilience and policy flexibility.

This, as local economic managers doubled their projection for the Philippines’s BOP for 2015.

The Bangko Sentral announced on Friday that it expects a $2-billion BOP surplus, a reversal from the $2.9-billion deficit in the actual BOP last year.

The new projection is a significant upward revision from the earlier assumption of $1 billion in

2 1

balance of payments

$2B surplus $1B Previous projection

0 2014 -1 -2

2015

$2.9B deficit

-3

surplus for this year.

“This is due primarily to a sustained strong currentaccount surplus following the downward revision in international oil prices,” the central bank said.

“Overall, the external position of the Philippines is seen to improve in 2015. This should support the continued strong investor confidence in the economy.

Moreover, the country’s external position remains a key source of resilience and policy flexibility that would enable the economy to ride out the volatilities of global economic and financial developments,” the BSP added.

The BOP is the summary of all transactions of the country with the rest of the world. A surplus means that the Philippines has incurred more foreign-currency earnings See “BOP Surplus,” A2

Legislator sees enactment of fair-competition law

By Jovee Marie N. dela Cruz

T

HE vice chairman of the House Committee on Trade and Industry has expressed confidence that the House of Representatives and the Senate can reconcile their different versions of the proposed Philippine Fair Competition Act (PFCA) during their bicameral conference committee.

Liberal Party (LP) Rep. Anthony G. del Rosario of Davao del Norte, a member of the bicameral committee, said that both chambers are eyeing

PESO exchange rates n US 44.5100

to set their bicameral meeting for the measure this week.

“We have still no schedule [for bicameral committee meeting], although I suspect that it will be this week,” said del Rosario, adding, “There are some different provisions [between the Senate version and the House version] but, I think, we will be able to make compromises during our meeting.”

“On Monday we will study the Senate version to determine the differences in our versions,” del Rosario said.

Among the members of the bicameral committee are LP Rep. Dakila Carlo E. Cua of Quirino, Centrist

Del Rosario: “There are some different provisions, but I think we will be able to make compromises during our meeting.”

Democratic Party Rep. Rufus B. Rodriguez of Cagayan de Oro, and Party-list Reps. Ibarra M. Gutierrez III of Akbayan and Antonio L. Tinio of ACT Teachers.

See “Competition,” A2

P25.00 nationwide | 6 sections 28 pages | 7 days a week

Fed on course for 2015 rate increase–yellen

A

FIRST-QUARTER economic chill will not deter the Federal Reserve (the Fed) from its plan to raise interest rates this year, Chairman Janet Yellen said, assuring investors that the pace of subsequent tightening will be gradual. »A2

n japan 0.3677 n UK 69.7160 n HK 5.7410 n CHINA 7.1828 n singapore 33.3184 n australia 35.1053 n EU 49.4595 n SAUDI arabia 11.8693 Source: BSP (22 May 2015)

News BusinessMirror

A2 Sunday, May 24, 2015

news@businessmirror.com.ph

Fed on course for 2015 rate increase–Yellen BOP surplus... continued from A1

Although the labor market is nearing full strength, “we are not there yet,” she said on Friday in a speech in Providence, Rhode Island, emphasizing the Fed will proceed “cautiously.”

If the economy continues to improve as she expects, “it will be appropriate, at some point this year,” to start raising rates, Yellen, 68, said in her first public comments on the policy outlook since late March.

Yellen’s comments show a determination to act this year, while avoiding a shock to the still-fragile economy by stressing that the cost of everything, from car loans to mortgages, will stay low for years.

The Fed has kept rates near zero since December 2008.

“It’s clearly going to be one of the most dovish tightenings you’ll ever see,” said Dana Saporta, US economist at Credit Suisse Group AG in New York.

US stocks closed lower, with the Standard & Poor’s 500 Index down 0.2 percent to 2,126.23 at 4 p.m. in New York, after closing on Thursday at a record. The yield on the benchmark 10-year Treasury note was up two basis points, or 0.02 percentage point, to 2.21 percent.

Fed officials want to avoid surprising investors, as they did in mid-2013, when bond yields soared, minutes of the April 28 and 29 Federal Open Market Committee (FOMC) meeting released on Wednesday show.

Proceeding cautiously

YELLEN said the best way for the Fed to achieve its policy goals would be “by proceeding cautiously, which I expect would mean that it will be several years before the federal funds rate would be back to its normal, longer-run level.”

She repeated the Fed’s two criteria for raising rates, which have been kept near zero since December 2008: “I will need to see continued improvement in labor-market conditions, and I will need to be reasonably confident that inflation will move back to 2 percent over the medium term.”

Policy-makers expect growth to pick up after stalling in the first quarter, even as they fret about the strength of the consumer spending that makes up two-thirds of the economy, the April minutes show.

Yellen said the US “seems well positioned for continued growth,” as consumers benefit from cheaper gasoline prices that amount to a boost to purchasing power esti-

Competition...

Last December the Senate passed on final reading its version of the fair-competition measure, while the House approved its version on Tuesday.

The lower chamber’s version of the bill is stiffer than the Senate version.

However, both versions of the

continued from A1

measure aim to minimize, if not totally eradicate, unfair competition, monopolies and cartels.

The Senate and House versions of the bill also propose the creation of the Philippine Competition Commission that will prosecute those engaged in unfair and deceptive trade practices and other such

mated at about $700 per household on average.

117 days

merce. Democrat Sen. Jack Reed of Rhode Island helped facilitate her appearance before the group, said his spokesman Chip Unruh, and Laurie White, the chamber president.

Reed has introduced a bill requiring the head of the New York Fed be picked by the president and confirmed by the Senate.

“HER tone strikes me as someone who is trying to lay the groundwork for a rate hike soon,” Stephen Stanley, chief economist at Amherst Pierpont Securities Llc., wrote in a note to clients. “The September FOMC meeting is 117 days away.”

Rates will probably be lifted in September, according to the median forecast in a Bloomberg survey of economists. The April minutes showed that officials “thought it unlikely” they would act at their next meeting on June 16 and 17.

Weak growth overseas, which has helped to push up the value of the dollar against the currencies of American trading partners, has “dented US exports and weighed on our economy,” Yellen said on Friday, adding that “this headwind, too, should abate as growth in the global economy firms.”

Yellen noted that home prices are recovering and said population growth is creating a need for more housing. Nevertheless, she said, credit remains tight and “activity in the housing sector is likely to improve only gradually.”

Yellen spoke to the Greater Providence Chamber of Com-

YELLEN’S speech brings her back to the city where she discovered economics as an undergraduate at Brown University. She began with a philosophy concentration but switched to economics to study with professors Herschel Grossman and George Borts.

Borts and Grossman “taught me that economics was a subject where a systematic way of thinking about the world translated into policy prescriptions with real social impact,” Yellen said, according to Brown’s alumni magazine.

“I remember sitting in Herschel Grossman’s class and thinking, ‘Gee, I didn’t realize how much influence the Federal Reserve has on the health of the economy. If I ever have a chance at public service,” she said, working at the Fed “would be a worthwhile thing to do.’” Bloomberg News

practices with the purpose of preventing, restricting, or distorting competition.

The proposed act also provides heavy penalty against those found to be engaged in unfair competition by facing a fine ranging from P50 million to P200 million.

Speaker Feliciano Belmonte Jr., one of the main authors of the bill, said that the passage of the proposed PFCA will benefit not

only the business sector but also the common people.

Belmonte added that the proposed PFCA will be a larger contributor to economic growth, as foreign direct investments are seen to increase once it is implemented.

He said that the proposed PFCA has been repeatedly filed since the 8th Congress, but it was never passed.

Studied at Brown

during the period as compared to its expenditures.

The government revises the BOP assumptions twice every year.

The expected surge in the country’s BOP accounts for the official assumption of a decade-high currentaccount surplus for the year.

In particular, the BSP now expects the current-account surplus to hit $14.2 billion, making up 4.4 percent of the country’s gross domestic product. This is also an upward revision from the $6.8-billion current-account surplus as earlier projected.

“The current account is expected to be supported by strong overseas Filipino remittances and robust receipts from business-process outsourcing and tourism. A narrowing merchandise trade deficit is also expected to prop up the current account,” the BSP said.

In terms of trade, exports are seen to rise by 5 percent, from the 4 percent expected earlier. Imports,

Outlook...

continued from A1

meanwhile, are seen to grow by 1 percent, lower than the 7 percent expected earlier. This is due to the lower oil prices.

Financial accounts, meanwhile, are also seen to improve and post a lower outflow of $8.4 billion, from the $10.1 billion recorded in 2014.

“While the global financial environment is expected to remain volatile, the continued bullish business confidence is expected to support higher foreign direct investments and modest inflows in portfolio investment, a reversal from an outflow of $1.3 billion in 2014 to a modest inflow of $0.2 billion in 2015,” the BSP said.

Gross international reserves, meanwhile, are seen to hit around $81.6 billion from the earlier $83-billion assumption. The BSP said that, at this level, it still remains “ample,” covering 10 months’ worth of imports of goods and services.

continued from A1

n Quarter ahead: In its latest Asia-Pacific Economic Preview, Moody’s Analytics said that the gross domestic product (GDP) growth in the Philippines likely ticked up a notch to have grown at a 7.3-percent pace in the quarter ending March this year after the 6.9-percent growth seen in the last three months of 2014. Meanwhile, the International Monetary Fund was of a different view, saying that the first-quarter GDP is seen to hit between 6.3 percent and 6.9 percent for the country. Bianca Cuaresma

Senate President Franklin M. Drilon said that “having a competition law will lead to lower prices, higher quality of products and services, and more choices for consumers, as fostering a competitive economic environment spurs market efficiency and innovation.”

Drilon also said that the Fair Competition Act contributes to Congress’s goal of passing a package of priority economic measures

to improve the Philippine business climate, boost investment, and ensure macroeconomic and fiscal sustainability to prepare the country for the Asean Economic Community this year.

He added that “the Philippines remains the only member of the Asean-5 countries [which include Indonesia, Malaysia, Singapore and Thailand], where a competition law is not already in place.”

EconomySunday

www.businessmirror.com.ph • Editor: Vittorio V. Vitug

BusinessMirror

Sunday, May 24, 2015 A3

DBP eyes to bankroll 32 power projects worth P89B

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By Genivi Factao

he Development Bank of the Philippines (DBP) is eyeing to finance 32 power projects worth P89 billion this year up to 2016.

DBP Senior Vice President and Credit Risk Management Group Head Auralyn S. Torres said the DBP targets to finance 32 power projects with potential capacity of 1,009 megawatts (MW).

“The DBP is evaluating the 32 power projects, which are subject to technical due diligence. Hopefully, we can approve their loans this year until 2016,” she told the BusinessMirror.

DBP Risk Management Manager Jerome de Leon said the 32 pending projects have an aggregate project cost of around P89 billion.

The DBP seeks to finance the two brownfield projects owned by Green Core Geothermal under the Lopez Group with aggregate generation capacity of 304.5 MW. Other projects in the list are two coal plant of Filinvest and Therma

South with aggregate generation capacity of 435 MW at a total cost of P40.03 billion; and the 400-MW LNG project of Energy World Corp. worth P25.87 billion.

The DBP does necessarily have to finance the entire project. The loan amount may be lower than the project cost.

The hydropower projects account for 20 out of the 32 projects, while the rest were coal (two), natural gas (one), solar (three), biomass (three) and oil (three).

These 32 projects were among the 858 power projects identified by the Department of Energy (DOE) with potential capacity of 29,462 MW. “The list of the 32 pending projects being eyed by DBP constitutes 3.42 percent of the total potential capacity in the project lists of the DOE as of March 2015,” Torres said.

She added that the DBP, a development bank, is willing to finance these projects.

However, there are challenges being faced that cause delays, notably in regulatory is-

suances, as these projects require approval from the Energy Regulatory Commission.

An investor also needs to get approval from the local government units that are directly affected, especially on coal projects.

She said the DBP’s interest rates were very competitive, and it can offer long-term loans from seven to 12 years.

“The power sector has the second biggest share in the DBP’s total loan portfolio of P160 billion, as of March 2015,” she said.

Citing the Bangko Sentral ng Pilipinas figures, the total outstanding loans to power sector of the banking sector is P446 billion, as of March 2015. She said the DBP has 2.7-percent market share in total loans to power sector.

The DBP has approved 10 power project loans in the past, while 32 projects were in the pipeline, for a total of 42 projects.

Of the 42 projects, 13 were in Luzon, six in Oriental Mindoro, one in Romblon, nine in the Visayas and 13 in Mindanao.

PHL urges Apec to expand trade and investment to reduce poverty

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ORACAY ISLAND—The Philippines has called on other membereconomies from the Asia-Pacific Economic Cooperation (Apec) to further expand trade and investment, which is crucial in supporting inclusive growth and poverty reduction across the region.

At the opening on Saturday of the two-

day Apec Ministers Responsible for Trade (MRT) meeting here, Trade Secretary Gregory L. Domingo noted that Apec needs to take significant strides toward achieving this goal being an important regional bloc and a major player in international trade.

Domingo identified inequality and poverty as still the biggest challenges to Apec

economies. “But over the past 50 years, trade has proven to be a powerful engine of growth. Thus, we need to expand trade and investment and encourage economic dynamism to achieve strong, sustainable, and inclusive growth,” he said.

Domingo, also Apec 2015 MRT chairman, said small and medium enterprises

(SMEs) play an important role in poverty alleviation and for long-term growth of Apec economies and the entire region.

SMEs are considered engines of growth and employment in the Apec region. Over 97 percent of businesses in Apec are SMEs, providing jobs to more than half of the workers in the Asia-Pacific region. PNA

briefs camp john hay rising as eco hub BAGUIO CITY—“Camp John Hay is fast becoming an economic hub,” and John Hay Management Corp. (JHMC) President Jaime Eloise M. Agbayani assures transparency and integrity in running the businesses inside the former American military rest and recreation facility.

Agbayani, at a news conference on Friday, said the 117 business enterprises inside the John Hay Special Economic Zone (JHSEZ) have a common goal of bringing in robust economic development for Baguio City and its people.

Agbayani said that JHSEZ is generating more jobs through the years, which highly contributes to the increasing revenues in terms of taxes. PNA

pnp releases p1.9-b midyear bonus for 155K COPS

THE Philippine National Police (PNP) on Saturday announced that it has released the midyear bonuses of its 155,000 active uniformed and nonuniformed personnel.

This amounts to P1,933,664,893.50, PNP Spokesman Senior Supt. Bartolome Tobias said.

The money was released by the PNP Directorate for Comptrollership through the PNP Finance Service and subsequently credited to the individual automated teller machine payroll accounts of active-duty PNP uniformed and nonuniformed personnel.

Chief Supt. Roberto L. Aliggayu, PNP Finance Service director, said PNP members who are not yet enrolled in the ATM payroll system will receive checks through the Regional Finance Service Offices. Aliggayu explained that the midyear bonus represents 50 percent of the 13th-month pay and other cash benefits mandated by law for all government workers. PNA

ltfrb eyes phaseout of old trucks-for-hire

Old trucks-for-hire will soon be phased out by the Land Transportation Franchising and Regulatory Board (LTFRB), the board said on Saturday.

Through the nonconfirmation year (NCY) policy, 26-year-old trucks will only be allowed confirmation of franchise for a year; 21 to 25 years old for two years validity, 16 to 20 years for three years, 11 to 15 years old for four years, and 10 years or less for five years.

LTFRB Chairman Winston M. Ginez said affected TH operators are allowed to file a motion to allow confirmation. The board will allow confirmation and registration of trucks affected by the NCY policy, instead of imposing stricter fixed age-limit policy, provided the operator is able to cite justifiable reasons duly supported by documents. PNA

SundayV

Busine

A4 Sunday, May 24, 2015

editorial

Investments and the rule of law

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INANCE Secretary Cesar V. Purisima knows his finance but knows his politics better. In a recent Financial Times-First Metro-Philippines Investment Summit, the secretary read a speech saying that “the prevalence of the rule of law in the country helped in increasing the confidence of investors in doing business in the Philippines.”

The secretary was indulging in irony, for it is clear he didn’t want to appear to be lecturing his boss. The fact of the matter is that the present administration has shown little respect for the rule of law at least twice since it took over in 2010. The first was when it unilaterally canceled the $434.8-million (P18.7-billion) contract of the Philippine government with the Belgian firm BaagerwerkenDecloedt en Zoon (BDZ) for the dredging of Laguna lake. As a result of that abrogation, BDZ is now at the World Bank International Centre for Settlement of Investment Disputes seeking $93 million (P4 billion) in damages.

Already, the Philippine government has been told to pay $9.76 million (P420 million) for cancellation of the bank loan that was to finance the project.

The second exhibition of lack of respect for commitments was the recent cancellation of the Cavite-Laguna Expressway Project (Calax) winning bid and the rebidding of the project.

This prompted American Chamber of Commerce Senior Advisor John D. Forbes to note that the rebidding signified not just poor planning but an effort on the part of the government to “get more money from bidders who would recover it with higher tolls.” This last point needs elaboration. Any payment made to the government by the winning bidder for whatever purpose will have to be recovered from the userpublic when the time comes, meaning that this government, through the winning bidder, will be gouging the eyes of the public before you can say Mamasapano massacre.

Unilateral actions such as these have at least two major effects: the direct effect of losses to the government in terms of payments to be made in restitution of the other party or losses to the consuming public in terms of higher costs to consumers because of government ignorance or inefficiency; and the indirect effect of loss of interest in the country by prospective investors, foreign and domestic.

No safe haven in Hong Kong E Bloomberg View William Pesek

Gospel

Sunday, May 24, 2015

VERYONE’S long known that China’s stock market is a rigged, nontransparent mess.

That’s a problem for Beijing certainly, but it’s also now a problem for Hong Kong, once considered the gold standard for global financial hubs.

Many had hoped that Hong Kong’s return to Chinese hands in 1997 would’ve prompted the Communist Party to try to import the city’s firstworld banking system, openness and rule of law. Eighteen years on, the opposite seems to be happening. China is exporting its financial bedlam to a city whose defenses may be woefully unprepared. Charles Li, the CEO at Hong Kong Exchange & Clearing, recently told Bloomberg News his market could easily handle the mainland inflows enabled by a new exchange link with Shanghai. What isn’t clear is whether Hong Kong regulators have the capacity to monitor and contain the risks associated with all that cash sloshing across the border.

This week’s events only reinforce those doubts. On Wednesday solar company Hanergy Thin Film Power Group crashed, erasing a breathtaking $19 billion in 24 minutes. A day later, the chaos spread to the Goldin twins—Goldin Financial and Goldin Properties—which lost $21 billion, about half their market value, for no obvious reason. The three companies had been among Hong Kong’s best-performing stocks this year.

Their downfall makes at least three things clear.

First, China’s bubbles are now Hong Kong’s problems. Mainland markets long ago abandoned the kind of value investing championed by the likes of Warren Buffett. Chinese punters care little about balance sheets, financial ratios or corporate strategy. What matters more are the links company officials are believed to have with top Communist Party officials—who got in on the ground

O

floor, whose nephew or niece is on the board and whose mobile numbers are in the CEO’s contacts list.

Guanxi—a term covering connections or relationships—is valued above P/E ratios. Rather than looking at company filings, investors scour Internet chat rooms to find out which corporate titans appear to be blessed with official favor. I can’t pretend to know why Hanergy’s stock surged sixfold this year before Wednesday’s plunge, or why the Goldin twins jumped more than 300 percent. Suffice it to say that investors believed more in the owners—Hanergy’s Li Hejun and Goldin’s Pan Sutong— than the businesses. Once that aura cracked, in Li’s case because he chose not to show up to the company’s annual meeting, everyone rushed for the exits.

Hong Kong officials now need to start thinking in these terms and bolstering their defenses, which currently don’t even include so-called circuit breakers as in other major markets. The Securities and Futures Commission should increase its investigative and enforcement staff immediately. Authorities also need to reconsider the laissez-faire regulatory environment that’s long set Hong Kong apart in Asia, increasing oversight of unusual share moves and intervening where necessary.

Officials might want to consider slowing mainland capital flows until data on buy-and-sell orders can keep pace with trading activity.

Second, prospects are looking dicey in the solar sector. Fair or not, Hanergy’s downfall will cast a pall over the renewable-energy realm.

The crash coincided with one at Yingli Green Energy (down 37 percent in US trading on Tuesday). Yingli now says there’s “substantial doubt” over its future.

Granted, short sellers and media outlets had long questioned

N the evening of that day, the first day of the week, the doors being shut where the disciples were, for fear of the Jews, Jesus came and stood among them and said to them, “Peace be with you.”

When He had said this, He showed them His hands and His side. Then the disciples were glad

Hanergy’s unproven technology, unconventional accounting regime and dependence on its parent for revenue. In December analyst Charles Yonts of CLSA in Hong Kong asked rhetorically of Hanergy’s claims to have mastered thin-film technology: “Are they really that good?”

Now, executives boasting of renewable breakthroughs from Japan (which offers some of the world’s most generous incentives for clean energy) to the US will face new levels of market skepticism. China is, after all, where most of these innovations will be assembled. Even if issues at Hanergy and Yingli are company-specific, expect increased volatility in energy stocks for the foreseeable future.

Third, global investors should prepare for more uncertainty generally. Unprecedented central bank cash is driving asset prices to record highs even as global demand underwhelms. China is a particular anomaly, with a stock market in the stratosphere despite the slowest growth since 2009. For better or worse, Beijing is likely to continue encouraging this stock bonanza because equity is about the only way companies can raise cash nowadays, given the debt overhang throughout the economy.

If fundamentals were driving things, Shanghai shares might be falling; instead they’re up about 42 percent this year. Shenzhen shares are up even more, about 92 percent, and it’s only May. The southern Chinese city will soon have its own Hong Kong market link, opening yet another channel for mainland money to overwhelm Hong Kong regulators.

As Bloomberg News reported on Friday, over 100 Shenzhen stocks have surged more than sixfold each over the last year. About the only sure bet in this market is that many of them will repeat Hanergy’s swoon.

when they saw the Lord.

Jesus said to them again, “Peace be with you. As the Father has sent Me, even so I send you.” And when He had said this, He breathed on them, and said to them, “Receive the Holy Spirit. If you forgive the sins of any, they are forgiven; if you retain the sins of any, they are retained.”—John 20:19-23

Voices

essMirror

opinion@businessmirror.com.ph • Sunday, May 24, 2015 A5

No cure for insanity F

Free Fire

By Teddy Locsin Jr.

IRST, the facts. The Land Transportation Office (LTO) ran out of license plates a long time ago under a badly bidded contract to secure 16 million license plates for far less vehicles than will need them. Because it cannot issue license plates, the LTO has not apologized. Instead it has enforced a “no plate, no travel” policy. This is how it goes: No. 1, a motorist pays for a car and for the registration fees that entitle him to license plates for the car. He must pay all that at the same time or he cannot take the car out

of the showroom and on the road.

However, No. 2, the LTO cannot deliver the plates he paid for because it has no more plates to deliver under a badly bidded contract.

And so, No. 3, the LTO forbids motorists from using their new cars—which may be their only cars for work and school; not unless they have the license plates that the LTO cannot give them although it is obliged to do that.

And No. 4, if you are caught using your new car without the new license plates that you cannot get from the

LTO, the LTO fines you P10,000 for failing to have the license plates it cannot give you.

Wait. Before you fly off the handle and call the LTO all sorts of names, let us consider the evil that the LTO seeks to prevent by this policy of punishing others for its own failure.

Theoretically, there can be people out there who will not pay registration fees and so have no plates, and yet drive around without plates and get caught and because they cannot show registration papers,

they just might blame the LTO for running out of plates for which they have no papers. How likely is this to happen?

Over lunch today, we inquired, over a bottle of fine red wine, from car industry experts, which included Sen. Alan Peter Cayetano. They all agreed that it is unlikely that anyone would be so stupid as to try that.

And yet I urge you not to fly off the handle because the tendency to blame others for something you must give them but you cannot is a clear sign of insanity, and

insanity should not be scorned, let alone punished because it should be treated. However, there is no treatment for what these experts called administrative insanity except to wait for the end of the term of the administration concerned. And this is forthcoming.

So we urge you all to please be patient. Nobody likes to be crazy. You are just that way. It is not something you want to be. It is not something you can help. And it is not something that can be cured by insulting it. So keep cool and keep well.

Despite Tsarnaev, the death penalty is on the decline

By Mario Marazziti Los Angeles Times/TNS Forum

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HE execution of Dzhokhar Tsarnaev for his role in the Boston Marathon bombing—if it ever takes place—will quite possibly be the last of its kind, remembered as the last time the United States government put a person to death.

After a formal sentencing hearing next month, Tsarnaev’s lawyers are expected to request a new trial. As the case winds through the lengthy appeals process, the prosecution’s main argument for execution—that it offers “closure” to victims and their families— will be revealed as illusory. In effect, the appeals phase will put the death penalty on trial, and as time passes, public and legal opinion will probably turn decisively against the “ultimate punishment.”

Thirty-four US states are “retentionist”—they still have some form of capital punishment on the books—and 16 states have executed a person in the last three years. But the number of executions and new death sentences is at a 20-year low, and just a few states are responsible

for the vast majority of executions.

Many US cities, and a number of states, are now antideath penalty zones—not just liberal bastions like Berkeley, California, and Cambridge, Massachusetts—but also New Jersey, Connecticut, Illinois, Maryland and New Mexico.

A bill to reintroduce the death penalty in Massachusetts was defeated.

Bills to outlaw the death penalty are in process in Delaware, Kansas and Colorado. Even in Nebraska, a staunchly conservative state, a bill to abolish the death penalty has such strong bipartisan support that legislators could override an expected veto by the governor.

Meanwhile—and driving that change—recent developments have brought intense public scrutiny of this controversial practice. This year, two death-row inmates were exonerated and set free: Debra Milke, jailed since 1990 in Arizona, and Anthony Ray Hinton, jailed since 1985 in Alabama by a prosecutor who said he knew Hinton was guilty “just by looking at him.” They were the 151st and 152nd US death-row prisoners so exonerated—the latest illustrations that the evidence in capital cases is often faulty or nonexistent.

Also this year, Utah reinstituted the practice of execution by firing squad, even though (as Gov. Gary Herbert put it) it’s “a little bit gruesome.” The move was a tacit admission that the lethal-injection procedure (which has changed as pharmaceutical companies have ceased production of several lethal drugs) is now so unreliable that shooting a man at close range is the more humane option.

Indeed, the medical establishment is increasingly uncomfortable with lethal injection. At its annual meeting in March, the American Pharmacists Association declared that “the practice of providing lethal-injection drugs is contrary to the role of pharmacists as health-care providers,” thus joining associations of doctors and of anesthesiologists in deeming cooperation with executions contrary to the Hippocratic Oath (“first do no harm”).

In June, the US Supreme Court is expected to rule in a case brought by prisoners on death row in Oklahoma, contending that the death penalty as carried out there—by lethal injections secretly arranged and shoddily administered—constitutes cruel and unusual punishment. The case is the

most substantive legal challenge to the death penalty in the US in decades.

And it will put the court in the quixotic position of weighing the legality of the very procedure (lethal injection) that the Justice Department is brandishing as an instrument of justice in the Tsarnaev case. The death sentence given to Tsarnaev is a final spasm of the death penalty, a punishment that the US is on its way to abandoning, as most civil societies have already done.

When the Helsinki Conference on Security and Cooperation in Europe took place in 1975, 16 European countries had already abolished the death penalty or committed to doing so. By the time the Berlin Wall came down, there were 19. By 2002, 38 more countries around the world had done so, including much of the former Soviet Union. Today, 105 of the 192 countries represented at the United Nations have abolished the death penalty by law, and at least 43 more have abolished it in practice, either through public moratorium or de facto moratorium (when a country declines to practice capital punishment for a decade or longer). Those that still employ the death penalty—among them Saudi Arabia, Iran, Iraq, Egypt,

Somalia, China, Japan and the US—are outliers and strange bedfellows.

Of course, there is nothing to prevent future US attorneys general from seeking the death penalty—for federal crimes involving terrorism and national security, for example—and future juries from delivering death sentences in capital cases. Societies and social norms, however, change quickly.

The last time a convicted criminal was executed in Massachusetts—1947— Harvard University was an all-male institution, “separate but equal” was still the law in much of the country, and the high wall in left field at Fenway Park had just been painted green.

The last time the federal government executed a convicted criminal— Timothy McVeigh in June 2001—the euro was a new currency, the Internet had only 50 million users and the World Trade Center towers were still standing.

President Barack Obama, as he leaves office in 2017, could grant Tsarnaev clemency, reducing his sentence to life in prison without parole. But whether or not he does so, the longterm outlook is clear: In the US today, the death penalty is itself on the verge of death.

A bad idea brings out the best in Israel

By Daniel Gordis

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SRAELIS were treated once again this week to the terrible optics of Benjamin Netanyahu’s government making a controversial statement about Arabs, then backpedaling quickly in the face of domestic and international outrage, and then having to try to clean up the mess.

A couple of months ago, the storm was over Netanyahu’s election-day Facebook post in which he said “droves of Arabs” were heading to the polls and that his supporters had thus better hurry to vote to close the gap. Many Israelis were horrified by the crass language.

US President Barack Obama rebuked the prime minister, and Netanyahu was compelled to apologize to Israel’s Arabs for the hurt his comments had caused.

However unpopular, though, the Times of Israel suggested afterward that his posting may have had a “decisive” impact on the election.

That circus was resurrected on

Tuesday when Israeli news reported that the government was instituting a policy that would require Palestinians returning to the West Bank to pass through the same checkpoint by which they had entered Israel, in some cases adding hours to their commute. Far more controversially, as the news reported it, “Palestinian workers…will not be allowed to ride Israeli bus lines.” Accusations of apartheid flew from every direction, including from some Jewish settlers who argued that there had to be a better way to protect Jews riding on buses with mostly Palestinian workers, and that “the fact that Jews are targets of injustice and racism is no excuse for doing the same to Arabs.”

So vociferous were the outcries, both domestic and international, that Netanyahu had no choice but to suspend the program the very next morning. Defense Minister Moshe Ya’alon—who does not have the reputation of being a racist, but is known as a no-nonsense security guy —insisted that the policy was entirely

about protecting Jews, and that he would find a way to reinstitute it.

What the coverage of the brouhaha and the international scorn missed almost entirely is the genuine nervousness that Israelis have about traveling with Palestinians on buses. The memory of a 1978 attack—in which Palestinian terrorists commandeered a bus in a complex sequence that left 38 Israelis dead and more than 70 wounded—still horrifies Israelis. During the Second Intifada, dozens of Israelis died in attacks on buses and bus stops. And just this January, a Palestinian stabbed about a dozen commuters in Tel Aviv.

Around the globe, the word “buses” sounds innocuous, but in Israelis’ consciousness, it has come to represent places of great vulnerability. Couple that with a British newspaper’s claim this week that Jerusalem is the most dangerous tourist site in the world, and one can begin to understand why the government feels pressure to take safety measures—even if those it chose backfired.

It is also worth noting, amid the international accusations of apartheid, that it was Israelis who shouted the plan down.

Apartheid South Africa hardly had a robust free press. Yet Israel does. Haaretz, the paper of record, warned that Israel would not be able to bury the damage the proposal had done.

Predictably, the political opposition seized the opportunity to assail the government. Labor Party leader Yitzhak Herzog (who lost to Netanyahu in Israel’s recent elections) called the plan “an unnecessary humiliation and a stain on the faces of the state and its citizens, unneeded fuel on the fire of hatred toward Israel worldwide.”

So, too, did the attorney general, Yehuda Weinstein, who said it might not survive legal tests. Even Gideon Saar, the right-leaning former interior minister who hails from Netanyahu’s Likud Party, tweeted his strong objection to the plan.

President Reuven Rivlin, also a product of the Likud Party, was equally unambiguous.

“As one who loves the Land of Israel, I have nothing but regret for the discordant voices that we heard this morning, supporting the separation between Jews and Arabs on the basis of ideas that have no place being heard or said,” he said.

“Such statements go against the very foundations of the State of Israel, and impact upon our very ability to establish here a Jewish and democratic state.… It is important we remember that our sovereignty obligates us to prove our ability to live side by side.”

For those worried about the Netanyahu government’s instincts, this week confirmed that there is great cause for concern. Yet for those who claim that Israel’s democracy is stumbling, there was good news in all the ugliness.

There are Israelis, across the political spectrum, who know offensive ideas when they see them. And they live in a country that protects their right to voice that opinion—a place where moral clarity can still force a government to back down.

Establishing drone guidelines an important privacy measure

By Marc Rotenberg The Philadelphia Inquirer/TNS

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HE Federal Aviation Administration (FAA) is in the midst of a public rule making for drones. This is an important process that will help ensure that drones are safely deployed in civilian airspace in the United States.

Among the regulations that the FAA is considering are requirements that commercial drone operators obtain a license, that drones only be operated during daytime, and that operators maintain visual line of sight with their craft.

That is a good start but more needs to be done. The FAA should also establish rules to ensure that drones do not engage in unlawful surveillance. As President Barack Obama has explained, the federal government should “take steps to ensure

that the integration takes into account not only our economic competiveness and public safety, but also the privacy, civil rights and civil liberties concerns these systems may raise.” This is a real concern as virtually all drones will carry high-resolution cameras with the ability to record images of people and also of private property. The FAA needs to ensure that commercial drones are not used for stalking, harassment or to pry into people’s private lives.

The FAA has acknowledged that its responsibility includes coordinating its efforts with “privacy policies so that the integration of drones into the national airspace is done in a manner that supports and maintains the US government’s ability to secure the airspace and addresses privacy concerns.”

With special capabilities and enhanced

equipment, drones are able to conduct detailed surveillance, obtaining highresolution pictures and videos, peering inside high-level windows and through solid barriers, such as fences, trees and even walls. Drones pose unique threats to privacy by virtue of their design, their size, how high they can fly, and their ability to operate undetected in urban and rural environments.

Many people will have no idea that they are subject to surveillance by small, unmanned vehicle. In addition, drones can track multiple targets across a distance of hundreds of miles and gather sensitive, personal information using infrared cameras, heat sensors, GPS, automated license-plate readers and other sensors. Of course, there is no dispute that drones can play an important role in rescue operations. They may also be

useful for news gathering. But these beneficial uses should not obscure the very real risks to privacy created by Unmanned Aerial Vehicles loaded with surveillance technology. Freedom of Information Act cases pursued by the Electronic Privacy Information Center (Epic) reveal that drones may also have the ability to intercept electronic communications and to engage in facial recognition.

For these reasons, more than 100 experts and civil-liberties organizations petitioned the FAA to develop privacy rules for drones. The FAA denied the petition even after Congress told the federal agency to develop a “comprehensive plan” for the deployment of drones in civil airspace. So, Epic has sued the agency to help ensure that appropriate privacy rules are established. We do not believe that a voluntary, “best practices”

approach is the right way to establish meaningful privacy safeguards.

If the FAA has the authority to establish legal rules for drone safety, it also has the authority to establish legal rules to limit drone surveillance. In response to growing public questions, many states are already enacting laws to limit drone activities. Most recently, Florida passed a law prohibiting the use of drones to intentionally record images of people on private property if a reasonable expectation of privacy exists.

The law applies to law enforcement and private individuals, and provides civil damages and injunctive relief. These efforts should be encouraged, and before commercial drones are deployed in the US, federal baseline rules to limit their surveillance capabilities should be established.

NewsSunday

A6 Sunday, May 24, 2015 • Editor: Vittorio V. Vitug

BusinessMirror

114 groups issue call to freeze implementation of K to 12

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By Jovee Marie N. dela Cruz

councils and publications from major universities and colleges, community youth organizations, as well as militant youth groups and the Kabataan Party-list.

Bañez belied the Department of Education’s (DepEd) claim that K to 12 is geared for better employment and quality education, saying that the program will “only increase joblessness, pull down wages and reinforce labor export; bring additional burdens to Filipino youth and their parents; and worsen the current education crisis.”

tion program will result to a steep increase in the number of out-ofschool youths.

“In our own estimates, K to 12 will force about 1 million students to enroll in private schools or state universities that impose skyrocketing tuition, ranging from at least P25,000 to P80,000 every semester.

This implies that K to 12 will increase the number of out-of-school youth in the country, while ensuring profit for capitalist-educators,” Bañez said.

Earlier, the House Committee on Higher and Technical Education has approved a measure calling for the creation of P29-billion transition fund in order to minimize the impact of the implementation of the K to 12 Program on all higher-education institutions (HEIs).

House Bill 5493, authored by Committee on Higher and Technical Education Chairman and Liberal Party Rep. Roman T. Romulo of Pasig City, seeks to provide financial assistance to academic, academic support and nonacademic personnel, as well as HEIs adversely affected by the K to 12 Program.

Out-of-school youth

Tuition hike

T least 114 groups, including student councils, campus publications, national youth formations and organizations of teachers and parents, called on the government to stop the implementation of the controversial K to 12 Program.

National Spokesman and Students, Teachers and Parents against K to 12 Alliance (STOP K to 12 Alliance) convener Charisse Bañez, in a news statement released over the weekend, said that the “K to 12 will bring no benefits to the Filipino youth, parents, teachers and workers, whether in the short or long term.”

“Calls to stop the K to 12 Program continue to spread among different sectors, primarily among the youth, parents and teachers. We will continue waging protest actions and gather more allied organizations nationwide to strengthen our campaign,” Bañez said.

The alliance includes student

Bañez also said that the Aquino administration’s flagship educa-

Meanwhile, Nationalist People’s Coalition Rep. Sherwin Gatchal-

ian of Valenzuela questioned the Commission on Higher Education’s (CHED) approval mechanism regarding the tuition increases in 313 colleges and universities for the new school year in June.

Gatchalian said the CHED should explain if the HEIs that were allowed to increase tuition last year complied with its memorandum that says 70 percent of tuition hikes must go to the salary increase of teaching and nonteaching personnel.

According to CHED Memorandum Order 3, Series of 2012, proceeds from tuition hikes should be budgeted as follows: 70 percent for increase of salaries and other benefits of teaching and nonteaching personnel, at least 20 percent for improvement of facilities and other costs of operation.

“Before the CHED approved the applications of over 300 schools for tuition and other fees increase, did it monitor where the proceeds of last year’s tuition hike were spent?

Did these schools follow the CHED guidelines on the allotment of proceeds? Were there sanctions meted out to noncompliant schools?” asked Gatchalian, a majority member of the House committees on basic education and culture and on higher and technical education.

www.businessmirror.com.ph

Treñas: No LP breakup

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senior member of the ruling Liberal Party (LP) on Saturday denied reported claims that the ruling party is heading for a breakup because of opposing views on the party’s presidential standard-bearer in the 2016 elections.

LP Rep. Jerry Treñas of Iloilo, chairman of the LP’s organizing and membership committee, said the LP, which is headed by President Aquino, maintains openness on all possible scenarios to make sure that it remains the party in power after 2016.

Treñas said the talks of a possible Interior Secretary Manuel Roxas II and Sen. Grace Poe, or a Poe-Roxas, tandem in 2016 are all speculations at this time. He said the LP’s main concern at this point is not on who should be carrying the LP banner but who among the candidates has the qualities and the commitment to pursue the programs and reforms that were started by President Aquino.

“LP is a platform-centered party. LP will not endorse any candidate just because he or she is popular. Our objective is not just to win an election but to ensure that our ideals and our vision for the country is vigorously pursued just like

what President Aquino has been doing for the past five years,” Trenas said.

“We will definitely support a candidate who would ensure continuity on the reforms and programs that were put into place by President Aquino.

We need at least two more terms so that the nation can fully benefit from the fruits of reforms that were carried out by this administration,” Treñas said.

Treñas added that although some LP members are supporting Poe as LP’s possible standard-bearer, a majority of the party members are rooting for Roxas because he his a trueblue LP member.

He, however, said that this disagreement among party members as to who should be supported by LP in the 2016 presidential polls is not enough to cause a party split-up because the party has a well-placed process in selecting its candidates.

“We can disagree but at the end of the day, we will decide as one party and embrace the decision of the majority,” Treñas said. He said that President Aquino will definitely have an influence as to who will be supported by LP but even his decision will have to be approved by the LP members.

Jovee Marie N. dela Cruz

Puregold ‘sari-sari’ store partners reach 350,000

PARTNERS

Puregold acknowledges its VIP partners at the opening of the 12th Sari-Sari Store Convention on Tuesday at the World Trade Center in Pasay City for their strong support for the retail giant’s pioneering program, Tindahan Ni Aling Puring, designed to help neighborhood stores become more profitable and sustainable. From left are Ashish Pisharodi, Mondelez country head; Albert Francis Fernandez, URC-BCFG vice president for sales; Daniel James Horan, Globe senior advisor for consumer business group; Ram Ramachandra, P&G marketing director; Carl Cruz, Unilever vice president for customer development; Vincent Co, Puregold director; Susan Co, Puregold vice chairman; Lucio Co, Puregold chairman; Suresh Narayanan, Nestlé president and chief executive officer; Leonardo Dayao, Puregold president; Ruffy Tiam-Lee, Monde Nissin Corp. vice president for sales and marketing; Raul Nazareno, San Miguel Purefoods Co. Inc. president; Angie Flaminiano, Nutriasia president and chief operating officer (COO); and Cito Alejandro, Del Monte general manager and COO. The annual convention runs until today.

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etail giant Puregold Price Club Inc. continues to grow and dominate the retail market through its strong partnership with some 350,000 sari-sari store owners, who contribute more than one-third of the company’s total sales revenue.

“The revenue contribution from our sari-sari store partners now accounts for 35 percent of our total sales,” Puregold Vice President for Investor Relations John Marson Hao said at the sidelines of Puregold’s 12th Sari-Sari Store Convention held on Tuesday at the World Trade Center in Pasay City.

The annual convention brings together thousands of Tindahan ni A ling Pur ing (T NA P)

members, who benef it f rom Puregold ’s pioneering program designed to help neighborhood stores become more profitable and sustainable.

In just one year, TNAP members have grown from 300,000 in 2014 to 350,000 this year. It has launched notable initiatives such as access to capital through Puhunan Plus and store reinventions through its Minimart by Puregold program. TNAP also launched its new and improved membership card this year.

As the program draws more members every year, Puregold a lso continues to ex pand its foothold in the retail market, having a total of 248 stores lo-

cated mainly in Luzon.

The retailer also plans to put up additional stores in the Visayas and Mindanao, as part of its nationwide expansion program.

Hao sa id t he y e x pec t t he expansion to the two other regions will significantly increase TNAP’s membership.

TNAP is a customized program made especially for Puregold’s primary customers, particularly sari-sari stores, which are dubbed as the backbone of Philippine consumer economy.

It serves as an avenue of Puregold to fulfill its mission to provide products, services and business opportunities to every Filipino family.

1 hurt as 2 LRT 1 trains collide

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technical glitch was the repor ted cause of the crash that occur red bet ween t wo Light R ail Transit Line (LRT) 1 trains at the Monumento station on Saturday.

A report said the crash interfered with the normal operations of the LRT 1, which led a number of passengers having to take other means

of transportation.

LRT Spokesman Hernando Cabrera said the technical glitch was due to the power fluctuation in the area.

The power f luctuation was responsible for one of the trains stopping and eventually colliding with another from behind.

Meanwhile, he said that only one person—the LRT 1 driver

—was reported to have suffered minor injuries from the crash. He was immediately brought to the nearest hospital.

“LRT 1 is still on degraded operations, Baclaran to Monumento and back only,” Cabrera said on his official Twitter account, adding that that technical personnel are still working to bring back full line operations before lunch time. PNA

Shopping

A BusinessMirror Special Feature

www.businessmirror.com.ph

Sunday, May 24, 2015 A7

THE BODY SHOP CELEBRATES 19 YEARS IN THE PHILIPPINES

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HE Body Shop celebrates 19 years in the Philippines with a new store concept and exciting beauty deals for its customers. It also celebrates its being part of the SM Retail Group.

It will be remembered that Dame Anita Roddick founded The Body Shop in 1976 by Dame Anita Roddick in Littlehampton, England. The beauty brand pioneered corporate activism and was built on a philosophy that business can be a force for good.

With its brand expression, Beauty with Heart, the company continues to be focused on five core values; Against Animal Testing, Support Community Fair Trade, Activate Self Esteem, Defend Human Rights, and Protect the Planet. All products are created using the finest ingredients sourced from the four corners of the globe, which are not tested on animals, and are 100% vegetarian, hence its being known for cruelty free beauty.

As it celebrates 19 years in the Philippines with over 55 stores strategically located nationwide, The Body Shop has expanded its reach by opening its first-ever Shop-in-Shop concept store in the newly renovated The SM Store Makati, making it more accessible to all beauty enthusiasts.

The brand is housed in a 22.5 sqm space, that showcases the latest Pulse Shop-in-Shop concept for easy shopping. Its lighting is condusive for browsing products, and its spacious layout makes it convenient to shop for the best skincare and beauty favorites. With accessible bays for product varieties, each highlights bestseller items and cult favorites from bath and body, down to make-up, skincare, & fragrance.

Get fruity with these Juicy Deals at 40% off - Almond, Papaya, Passion Fruit, Blueberry, Raspberry, Early-Harvest Raspberry, Lychee and English Dawn White Gardenia infused in shower gels, body lotions, and body butter, as well as eau de toilette, and body mist fragrances,

THE Body Shop’s iconic Big Sizes—750 ML Shower Gels, 400 ML Body Butters, and 300 ML Body Scrubs-are at 40% off until June 3. Relax, refresh and recuperate with The Body Shop's cleansing shower gels that lather up in the bath or shower to leave skin feeling clean, fresh and gently scented. After bath, enjoy the deliciously scented body butters that will help keep skin feeling soft, smooth and hydrated for up to 24 hours.

THE Body Shop’s new shop-in-shop design at The SM Store Makati makes shopping more convenient and beauty-ful.

AT The Body Shop in SM Makati Store, one can discover a World of Ingredients -- sourced through the Community Fair Trade.

The Body Shop's Tea Tree range, which is known as the perfect regimen for clearer looking skin, and is clinically proven to clear and hydrate. The Body Shop’s Tea Tree products are made from high quality Community Fair Trade organic tea tree oil inside distilled from hand-picked leaves, as well as tamanu oil extract which is reputed to help generate new tissue and improve the healing process for skin.

The Pulse Shop-in-Shop concept aims to provide consumers not just a unique, interactive and memorable over-all beauty experience, but at the same time allows the shoppers to experience the brand values and products

that are derived from the finest natural ingredients around the world, making every shopper feel good about themselves. This Shop-in-Shop concept may also be found at a 15.4 sqm space at the SM Store at the SM Mall of Asia

The Body Shop's Japanese Cherry Blossom Gift Set is at 50% off. A skin-softening body lotion infused with Japanese Cherry Blossom, this romantic, captivating blend of floral and hinoki wood accord was inspired by a spring day in Kyoto. Other selected Gift Sets are also on 50% off.

The Body Shop's Lip & Cheek Stain is now at Php395. This dual-purpose liquid stain gives lips and cheeks a hint of natural-looking color. It is made with natural ingredients from the Community Fair Trade, marula oil comes from the Eudafano Women’s Co-operative in northern Namibia.

As it celebrates 19 years in the Philippines, The Body Shop is treating everyone with exciting deals until June 3, 2015. Everybody can enjoy The Body Shop’s Big Sizes and Fruity Deals at 40%, as well as Selected

Gifts at 50% off.

The Body Shop now accepts SM Advantage Card for points earning and redemption, SM and Sodexo premium pass in all The Body Shop stores nationwide.

2nd Front Page BusinessMirror

A8 Sunday, May 24, 2015

www.businessmirror.com.ph

PAL still eyeing more European destinations, but...

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By Lorenz S. Marasigan

EFORE legacy carrier Philippine Airlines (PAL) expands its operations in Europe, two requirements must be met: one, a high passenger demand; and two, a level playing field on competition with Gulf carriers.

The company’s president, Jaime J. Bautista, clarified that the airline has not totally abandoned the prospect of expanding its operations to other European destinations under the 28-member bloc’s territory. It is just a matter of proper timing and sound regulatory policies.

Regulations and demand, he said, are intertwined. It is, in fact, evident in today’s local aviation industry—at least on the European and Middle Eastern fronts.

Gulf carriers, Bautista said, are threats to PAL’s business, as these companies offer lower fares owing to government subsidies.

Currently, some Gulf airlines serve destinations from Manila—with a layover at the Middle East—to Europe.

“Now, if we give more entitlements to Middle Eastern carriers,

BAUTISTA: “For us to be able to continue flying to Europe, our operations will have to continue to be profitable.

It depends on the situation in the future.”

what they will do is to carry passengers from Manila to Europe.

They can offer cheaper fares, although there is a layover,” Bautista told reporters in a chance interview.

He explained that PAL will find it hard to make profit if it expands its operations in Europe, if the seemingly unfair competition with Middle Easter carriers persists.

THE new Airbus A350 extra-widebody commercial jetliner on its first demonstration tour. Airbus

He urged the government to review its regulations in aviation and ensure fair competition in the market.

“We really need to compete. If there is a level playing field, okay lang, eh. We compete with them on the Middle East routes. They have more flights than PAL, because they carry passengers beyond Manila and the Middle East. I think this is the reason they want more entitlements for them to be able to carry more passengers beyond their hub,” Bautista said.

He added: “So iyon ang nagi­ ging disadvantage namin. We should be getting passengers from Manila to London, but because of these flights to the Middle East, ki­ nukuha nila [ang mga pasahero].”

Bautista also asked the gov-

ernment to “look at the third and fourth freedoms of the air.”

The third and fourth freedoms allow basic international service between two countries, with the former being the right to carry passenger from one’s own country to another and the latter being the right to carry passengers or cargo from another country to one’s own.

But even with these two freedoms granted, air-services agreements may still restrict some aspects of the traffic. These include the frequency of flights, the capacity of the aircraft and the airports to be served.

“Sobra-sobra iyong entitlements ng Middle East,” Bautista commented.

Hence, PAL’s expansion to Europe

will depend on market conditions— demand- and regulations-wise.

“For us to be able to continue flying to Europe, our operations will have to continue to be profitable,” Bautista said. “It depends on the situation in the future.”

The flag carrier was supposed to expand its services in Europe, after the European Union removed the Philippines from its aviationsafety blacklist two years ago. It currently serves one European market, London.

Should PAL decide to expand its European operations, Bautista said the company could either lease or buy a brand-new airliner from French airplane maker Airbus.

On Wednesday Airbus flew in from Taipei its new Airbus A350 extra-wide-body (XWB) to Manila.

PAL is now evaluating the prospect of acquiring or leasing one of these new aircraft for its Transpacific operations.

“There would be a need for us to get some long-haul aircraft for expansion in North America, Europe and Rome,” Bautista said.

“This would be the next-generation aircraft. We will study this very carefully.”

The A350 is the latest addition to the market-leading Airbus widebody product line. Seating up to 369 passengers in a two-class layout, the aircraft can fly on routes of up to 8,000 nautical miles, enabling nonstop service from Ma-

nila to Europe or North America.

The aircraft features the latest aerodynamic design, carbon-fiber fuselage and wings, plus new fuelefficient Rolls-Royce Trent XWB engines. Together, these latest technologies translate into unrivaled levels of operational efficiency, with a 25-percent reduction in fuelburn and emissions, and significantly lower maintenance costs.

For passengers, the A350 XWB brings new levels of in-flight comfort, with more personal space in all classes. In the premium cabin, airlines can install the most luxurious lie-flat seats, while the extra-wide fuselage allows for comfortable full service or budget layouts in economy class. The aircraft also features wider panoramic windows, larger overhead stowage compartments and a new draught-free air-conditioning system, as well as the latest in-flight entertainment and connectivity systems.

The A350 XWB has been especially successful in the Asia-Pacific region, where airlines have ordered a total of 244 aircraft, representing almost a third of the 780 orders recorded so far worldwide. Carriers from the region that have already ordered the aircraft for their future long-haul operations include Asiana Airlines, Air China, Cathay Pacific Airways, China Airlines, Japan Airlines, Singapore Airlines, Thai Airways International and Vietnam Airlines.