Businessmirror october 21, 2016

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PHL, China ink tourism Keepanopenmind cooperation agreement 632,947 T B Kraftwerk

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Photo: Daniel DeSlover / Zuma Press / TNS

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HE Philippines and China signed on Thursday an agreement to implement the Journeymemorandum of understanding (MOU) on tourism cooperation signed between both countries in 2002.

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Sports

| Friday, OCtOber 21, 2016 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao Asst. Editor: Joel Orellana

OS ANGELES—After striking out in his first two at-bats, Anthony Rizzo was seeking a slump buster. He found one in teammate Matt Szczur’s bat.

Using the borrowed lumber, Rizzo homered and ended a postseason skid with three runs batted in (RBIs). The rest of the Chicago Cubs’ hitters broke out equally as big in routing the Los Angeles Dodgers, 10-2, on Wednesday to even the National League Championship Series (NLCS) at 2-all.

“I know Szczur’s bat has a lot of hits in it,” Rizzo said. “I’ve done it a few times this year, just switching up the bat, switching up the mind-set.”

Addison Russell’s two-run homer highlighted a four-run fourth that stopped Chicago’s 21-inning scoreless streak and ensured the NLCS will return to Wrigley Field for Game Six on Saturday.

“It’s definitely a sigh of relief to have a big night,” Russell said.

Kenta Maeda is set to pitch for the Dodgers in Game 5 on Thursday against Jon Lester. Manager Dave Roberts said he will not start Clayton Kershaw on short rest after the Los Angeles ace threw a bullpen session on Wednesday.

“It’s not an elimination game,” Roberts said.

Following consecutive shutout losses, the Cubs rapped out 13 hits on an 80-degree (26 degrees Celsius) night with the warm Santa Ana winds fluttering the flags in center field.

Rizzo used Szczur’s bat on Tuesday night and got a broken-bat single.

Szczur, left off the NLCS roster, didn’t mind. He wrapped another one for Game Four, figuring Rizzo might want to use the bat that is the same weight and size but a different model than his.

“I just saw him walking up with my bat, and I started laughing,” Szczur said. “And then he hits a homer with it.”

Rizzo and Russell had three hits each. Chicago’s 3-4-5 hitters—a combined two for 32 in the first three games—busted out. Every Cubs starter got at least one hit except Kris Bryant, who walked twice and was hit by a pitch.

“It’s contagious, just like the lack of it is contagious,” Cubs Manager Joe Maddon said. “When you start hitting, it’s contagious, defense, this whole game really follows itself.”

Los Angeles was limited to six hits and made four errors in a game that dragged on for three hours and 58 minutes.

“It happens, but we haven’t had a game like that in a long time,” Roberts said. “You’ve got to brush off and get ready for tomorrow.”

Mike Montgomery won in relief of John Lackey, removed after consecutive walks opening the fifth. Four days shy of his 38th birthday, Lackey allowed two runs, three hits and three walks.

“I thought we put ourselves in a position to get to Lackey, but he escaped,” Roberts said.

At 20 years, 68 days the youngest postseason starting pitcher in major league history, Julio Urias gave up four runs and four hits in 3 2/3 innings. He was the third consecutive left-hander to start for Los Angeles.

“I wish I had taken advantage of this outing,” he said through a translator.

Chicago rattled off three straight hits to open the fourth, sparked by Ben Zobrist’s leadoff bunt single to third.

“With the way that our bats were swinging it at the beginning of the game, we just had to do anything we could. That was my thought process,” Zobrist said. “I felt like if he threw a strike, I could get one down in a good spot and was able to do it.”

He took second on Javier Baez’s single to left, and Willson Contreras followed with a single to nearly the same spot in shallow left, scoring Zobrist.

Baez moved to third and Contreras took second on left fielder Andrew Toles’s errant throw to the plate that skidded all the way to the backstop.

Jason Heyward hit a run-scoring groundout, and Russell followed with his first extra-base hit since September 30 and his first homer since September 19. He jubilantly pumped an arm as he rounded the bases on his two-run drive, which put the Cubs ahead 4-0.

Rizzo homered off Pedro Baez leading off the fifth, snapping his 0-for-11 skid in the series. Rizzo had entered two for 26 in the postseason.

Los Angeles closed to 5-2 in the fifth. With the bases loaded and one out, Justin Turner’s likely double-play grounder caromed off Montgomery’s glove and Russell, who scrambled on all fours at shortstop as the ball went into left-center field for a two-run single.

“If he just gets his glove out of the way, he gets out of the inning,” Maddon said.

Chicago tacked on five runs in the sixth off relievers Ross Stripling and Luis Avilan. Dexter Fowler singled in the first run, Rizzo added two more on a bases-loaded single and Javier Baez hit a sacrifice fly, with a second run scoring on an error by center fielder Joc Pederson.

By then, attention started turning to Thursday.

“It’s about confidence,” Maddon said, “and I want to believe they’re going to show up tomorrow with a lot more confidence than they showed up with today.” AP

Photo: Andy Miah

Cubs demolish dodgers, 10-2

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BATS GO SILENT A power-laden Toronto Blue Jays lineup fizzled against Cleveland, finishing off a five-game American League Championship Series wipeout with a 3-0 loss on Wednesday.

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By Ian Harrison The Associated Press

ORONTO—Five games. Eight runs. Two shutout losses.

A power-laden Toronto Blue Jays lineup fizzled against Cleveland, finishing off a five-game American League Championship Series (ALCS) wipeout with a 3-0 loss on Wednesday.

Bidding to return to the World Series for the first time since 1993, the Blue Jays were held to six hits by rookie Ryan Merritt and three relievers in the Indians’ second shutout of the series.

Toronto lost in the ALCS for the second straight year, following last year’s six-game defeat against eventual champion Kansas City.

“I’m sure there will be some disappointments and grumbling and complaining about how you fell short again, but that’s not coming from me,” Blue Jays Manager John Gibbons said. “I know what these guys did, and I think it’s a pretty good accomplishment. The key is we want to take that next step one of these days, hopefully it’s next year.”

An offense led by Jose Bautista, Josh Donaldson, Edwin Encarnacion and Troy Tulowitzki produced seven extra-base hits in the series—three doubles, two triples and two solo home runs.

Those also were Toronto’s final batters in the ninth, with Cody Allen allowing Bautista’s leadoff double before getting three straight outs for the save, retiring

hAIL The KINGS!

China visit’s haul: $13.5B worth of deals, plus new top foreign ally Kraftwerk is the foundation upon which all synthesizer-based rock and roll and electronic dance music is built. Founded in Düsseldorf in 1970 by the band’s two core

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Donaldson on a game-ending foulout.

Bautista and Encarnacion may have been playing for the Blue Jays for the final time.

Both are eligible for free agency.

“We were staring at a playoff drought for a lot of years around here. And they came through for the team last year, the organization. And then repeated it this year,” Gibbons said. “They really helped put this team back on the map again, what they’ve accomplished. And they really—both of them made their name here in Toronto.”

Toronto slugged its way past Baltimore in the wild-card game, winning on Encarnacion’s 11th-inning home run. The Blue Jays swept Texas in the Division Series, outhomering the Rangers 8-2 and outscoring them 22-10.

Bautista’s two hits in the finale left him three for 18 (.167) with no runs batted in, in the series, and Encarnacion was four for 19 (.211) and drove in two runs. Tulowitzki was two for 18 (.111) with no RBIs and Donaldson six for 18 (.333) with two RBIs. Russell Martin, who chased Merritt with a one-out bloop single in the fifth and advanced on pinch-hitter Michael Saunders’s hit—Toronto’s only runner to reach scoring position. Reliever Bryan Shaw fanned Ezequiel Carrera and Kevin Pillar.

Toronto’s offensive funk was remarkable given the shaky state of Cleveland’s starting pitching. Carlos Carrasco (broken hand) and Danny Salazar (forearm) have missed the entire postseason, and right-hander Trevor Bauer left Game Three after four batters when blood began dripping from his right pinkie, sliced open last week while he repaired a drone.

The Barangay Ginebra San Miguel Kings escape past the Meralco Bolts, 91-88, on import Justin Brownlee’s buzzer-beater “3” in Game Six of the championship series for the Philippine Basketball Association Governors’ Cup, ending an eight-year title drought at the Smart Araneta Coliseum. ROY DOMINGO » C3

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ChICAGO Cubs catcher Willson Contreras tags out the Los Angeles Dodgers’ Adrian Gonzalez at home during the second inning of Game Four on Wednesday. AP

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Duterte: Time to say good-bye to America

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he Philippines and China have signed $13.5 billion worth of private-to-private and government-to-government deals three days into the four-day state visit, a Cabinet official said on Thursday.

Trade Secretary Ramon M. Lopez said in a text message to the BusinessMirror these represent the major gains of President Duterte’s visit to Beijing and

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EFORE President Duterte went after the drug problem with Glocks, we had no international public-relations (PR) problem. In fact, we had no international PR whatsoever. Nobody knew we existed. So when you don’t do anything about a problem, you do not create another problem like bad PR. Continued on A11

Photo: Loona / Abaca Press/

COMPETITIVE TEcHNICIANS

Steppenwolf

of understanding (MOU) and agreements, numbering to at least 12, were signed on Thursday on wide-ranging cooperation on various fronts, from trade and investment to drug enforcement.

A top businessman, who is part of the Philippine business delegation to China, noted that among the projects inked in the private sector is a 1,000-megawatt power plant in Pangasinan and a telecommunications deal between Huawei

Photo: Daniel / Zuma Press /

Photo: Rick Dik

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BusinessMirror

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■ MOU on Production Capacity and Investment Cooperation; Agreement on Economic and Technological Cooperation between the government of China and the Philippines; ■ MOU on Strengthening Trade, Investment and Economic Cooperation; ■ MOU on Drafting China-Philippines Economic Cooperation Development Plans;

resident Duterte spelled out his foreign-policy pivot to China in the clearest terms yet, telling hundreds of Filipinos in Beijing that “it’s time to say good-bye” to the United States.

“Foreign policy veers now toward” China, Mr. Duterte said on Wednesday night, ahead of a meeting with Chinese President Xi Jinping on Thursday. “No more American interference. No more American exercises,” he told a cheering crowd.

Since President Duterte took office in June, the tough-talking 71-year-old leader has repeatedly questioned his nation’s alliance with the US, while touting the economic benefits of friendlier ties with China. His four-day trip to Beijing marks an opportunity to reset relations that have been strained in recent years over territorial disputes in the South China Sea. The President said on Wednesday he would welcome Chinese offers of aid, infrastructure funding and concessional financing.

The countries expect to sign about 25 agreements in sectors like infrastructure, energy and telecommunications, including a $3-billion credit facility from Bank of China, Trade Secretary Ramon M. Lopez said in an interview in Beijing.

“I will not ask, but if they offer and if they’ll ask me, you need this aid? Of course, we are very poor,” Mr. Duterte said of China.

“You need this railway? Yes, sir. And if you can give us a soft loan, give us something like 20 years to pay.”

‘Insulted’ “I will not go to America anymore” for assistance, President Duterte said. “We will just be insulted there.”

The US has been the Philippines’s closest ally since independence in 1946, and the nations are linked by formal defense treaties. Members of Mr. Duterte’s Cabinet have repeatedly tried to tone down his more inflammatory remarks—such See “Duterte,” A2

See “China,” A2

n japan 0.4658 n UK 59.2217 n HK 6.2112 n CHINA 7.1504 n singapore 34.7591 n australia 37.2021 n EU 52.8808 n SAUDI arabia 12.8519

Source: BSP (20 October 2016 )

News BusinessMirror

A2 Friday, October 21, 2016

www.businessmirror.com.ph

PHL, China ink tourism cooperation agreement Continued from A1

‘ALAY SINING’ It’s hard to believe that these children, Rogin de Pedro and Maranathalie Balitaon, who were born with congenital heart disease, are now able to appreciate the wonders of the world, as they view some of the art items to be featured in this year’s Alay Sining. Art can save lives, which has been proven by the Rotary Club of Makati West (RCMW) that is launching its annual charity art sale from November 11 to 13, at The Gallery, Greenbelt 5 in Makati City. Now on its ninth year, Alay Sining is run under the auspices of the Gift of Life International, which arranges funding for the treatment of children with congenital heart ailments. It has helped over 18,000 children of indigent families in 71 developing countries. Alay Sining is a noteworthy example of partnership between the artists who have supported the drive and RCMW that has successfully helped children to lead normal lives. Among the artists whose works will be on exhibit and sale in this year’s Alay Sining 9 are Abel Agubang, Jinggoy Buensuceso, Glenn Kagandahan, Kenneth Cobonpue, Jojit Nagamos, Jaime Nepomuceno and other leading and up-and-coming artists. Accompanying the two children-beneficiaries are (from left) Alay Sining President Paolo Delgado, RCMW Past President Lou del Rosario and participating artists Jaime Nepomuceno and Sam Penaso. NONIE REYES

China. . .

Continued from A1

■ MOU on Implementation of Tourism Plan 2017-2022; ■ MOU on the Lists of Transportation and Infrastructure Cooperation Projects; ■ MOU on Financing Cooperation between the Export-Import Bank of China and the Department of the Treasury of the Philippines; ■ Agricultural Cooperation Action Plan 2017-2019; ■ Protocol on Cooperation between PDEA of the Philippines and the Narcotics Control Bureau of the Ministry of Public Security of China; ■ MOU on the Establishment of a Joint Coastal Guard Committee on Maritime Cooperation; ■ MOU on Supporting Conduct of

Feasibility Studies for Major Projects; ■ MOU on News Information Exchange Training and for Other Purposes; and ■ the MOU on Cooperation on Animal and Plant Inspection and Quarantine.

The four-day state visit of President Duterte marks the first major step in the Philippines’s perceived pivot to China, with more than 400 top Filipino businessmen accompanying the Chief Executive.

The Duterte administration has made a clear stance on changing its primary diplomatic alliance from the US to China, underlining Beijing’s capability to help the Philippines in infrastructure development.

as All Saints’ Day in the Philippines. The flight will carry more than 100 passengers, according to a news statement from the Department of Tourism (DOT). Tourism Secretary Wanda Corazon T. Teo attended the launch along with major tourism stakeholders, which was held at the White Swan Hotel in Guangzhou.

The Jimei Group, a Macau-based casino junket operator, which now owns Fort Ilocandia and Resort Casino in Laoag, and the Fontana Hot Springs Leisure Park in Clark, Pampanga, initiated the charter flights. The chartered flights between Guangdong and Laoag will run twice a week.

“The tourists will stay at Fort Ilocandia, where they could play golf, and at the casino. They could also explore Ilocos Norte’s sand dunes, cinematic landscapes, beaches and historical sites,” Teo said.

With the launch of the chartered flights, the DOT chief expressed optimism the agency could surpass its 6-million visitor-arrivals target for 2016.

The Jimei Group is chaired by

Duterte. . .

Continued from A1

as telling President Barack Obama to “go to hell”—and stress that a more independent foreign policy doesn’t mean severing ties with the US. President Duterte himself told reporters on Wednesday that this trip wouldn’t lead to a military alliance with China or joint energy exploration in disputed seas. The plight of Filipino fishermen seeking to resume activity

Jack Lam, the so-called godfather of gaming, and is known as one of the largest VIP junket-casino operators in Asia. He brings players to Las Vegas Sands and Wynn Macau, as well as owns the casino at the Mandarin Oriental in Macau.

Ironically, Teo’s brother, broadcast journalist Erwin Tulfo, lambasted Lam in April 2015 in his column in another paper, accusing Lam of operating unlicensed online casinos.

“Lam, who owns the Fontana Leisure and Water Park in the former US Air Base in Angeles City, has reportedly ‘issued sublicenses’ to Chinese and Korean nationals to operate online gambling in the said resort,” Tulfo said.

“Apparently, Lam’s activities have gained the ire of certain officials of the Bureau of Immigration [BI], as well as those of Pagcor [Philippine Amusement and Gaming Corp.], as these clandestine operations involve foreigners who have no proper visas and work permits,” he added. (http://bit.ly/2e3r9PS) The DOT is targeting Chinese visitor arrivals to reach 632,947 in 2016, and 729,715 in 2017. In 2015 Chinese tourists in the Philippines

grew by 24.3 percent to 490,841.

From January to July 2016, Chinese arrivals in the Philippines grew by 64 percent to 422,801.

Teo signed the implementation agreement on the tourism-cooperation program on behalf of the Philippines, with China National Tourism Administration (CNTA) Chairman Li Jinzao representing the Beijing government. President Duterte, who is on his first state visit to China, and Chinese President Xi Jinping, witnessed the signing of the agreement.

Both governments have agreed to “a working group to implement” the tourism-cooperation program, to be composed of officials from the DOT and the CNTA. The working group “will meet at least once a year, whenever necessary, to further discuss the implementation of the tourism programs, as well as the facilitation of the execution of the undertakings.”

The document also provides the exchange of tourism professionals, “to strengthen the mutual development in the field of hotels, resorts, cruise, port, tourism products and other related industries and competency standards;”

the exchange of relevant tourism information and statistics; hold joint workshops and trainings; step up their cooperation in tourism safety and quality assurance; and launch joint promotion programs in identified markets. “ The participants will support each other’s tourism departments and enterprise in holding travel fairs, tourism exhibitions and other promotion initiatives, to inform the traveling public on the other participant’s tourism products and services, as well as cultivate awareness of environment protection and sustainable development in the growth of the participants’ tourism industries,” the agreement added.

The document also requires disputes over the program to be “settled amicably” through consultations and negotiations through diplomatic channels.

China is the largest source of outbound tourists in the world, according to the United Nations World Tourism Organization.

Last year around 120 million Chinese traveled overseas and spent some $500 billion, according to the CNTA.

in the Scarborough Shoal, which China effectively took control of in 2012, will be mentioned “in passing” to Xi, Mr. Duterte said.

drug war over alleged human-rights abuses. According to police data, more than 3,000 suspects have been killed after the policy took effect.

By contrast, the Philippine leader called China “very kind” for funding a drug-rehabilitation center. Hua Chunying, a spokesman for China’s foreign ministry, said on Wednesday Beijing “appreciates President Duterte’s efforts to crack down on drug crimes and improve social security with the fundamental interests and well-being of his country and people in mind.”

She also hailed President Duterte’s efforts to seek a “soft landing” on territorial disputes in the South China Sea. “China and the Philippines are returning to the right path of properly handling relevant issues through bilateral dialogue and consultation regarding the South China Sea issue,” Hua said.

“Friendly neighbors are supposed to get along with each other in this way.”

‘Zero-sum game’ The US has expressed concern about President Duterte’s policies. Philip Goldberg, the US envoy in Manila, said on Wednesday the Philippines’s efforts to improve ties with China “shouldn’t be a zero-sum game.” Mr. Duterte has lashed out at the US, the United Nations and the European Union for criticizing his

Charm offensive MR. Duterte was greeted by Xi with full military honors at the Great Hall of the People, the seat of the ceremonial legislature in the heart of Beijing. The two leaders are due to oversee the signing of a raft of agreements between their governments following their discussions.

China has hailed President Duterte’s visit as a step toward ending years of estrangement between the countries.

Tensions ran high after the Philippines won a major arbitration lawsuit against Beijing’s massive territorial claims in the South China Sea just three months ago.

Mr. Duterte has walked a tightrope in trying to mend damaged relations with China while defending his country’s claims in the disputed South China Sea. In Beijing the Philippine leader known for his devil-may-care, profanity-laden speeches said on Wednesday he would not raise the issue that has angered China unless his Chinese counterpart first brought it up, out of “courtesy” to his host.

“As a matter of courtesy and in the Oriental way, you always wait,” President Duterte said ahead of a meeting with members of the Filipino business community in Beijing on Wednesday.“Because I am a visitor, I can’t destroy the goodwill by just blurting out something.”

He also signaled a major shift in reliance on the US, the Philippines’s long-standing defense-treaty ally, telling the Filipino community members: “So it’s about time to say good-bye, my friend. Your stay in my country was for you own benefit.”

He has already said he wants US visiting troops to leave the southern Mindanao region and to President Barack Obama “you can go to hell.” He has also said he would terminate joint combat exercises between Filipino and US troops. “No more American interference. No more American exercises. What for?” he said on Wednesday night. “I will not go to America anymore. We will just be insulted there.”

In interviews with Chinese state media published and aired this week, Mr. Duterte has said “only China can help” his country, urging the country not to leave out the Philippines from a regional trade initiative and to give his country a railroad “if you find it in your heart.” Bloomberg News, PNA, AP

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Friday, October 21, 2016 A3

Govt should invest in youth education to defuse ‘demographic bomb’—Robredo

P

By Cai U. Ordinario

@cuo_bm

hilippine cities could be left with a “demographic bomb” of unemployed youth who could engage in urban crimes, if the government fails to invest in their education and skills, according to Housing and Urban Development Coordinating Council (HUDCC).

This was part of the National Report on “Better, Greener, Smarter Cities in an Inclusive Philippines” submitted by Vice President Maria Leonor G. Robredo at the UN Habitat III in Quito, Ecuador. Robredo is also the chairman of the HUDCC. The youth bulge of the Philippines could be the solution to reaping the country’s demographic dividend or the curse that will worsen the plight of the poor in cities nationwide.

“The result will be one big missed opportunity for the Philippines to reap the potentially sizable demographic dividends. Worse, the country can be confronted by a demographic bomb, with a large mass of frustrated youth engaged in urban crimes or causing social and political instability,” the report stated.

About 27.6 percent of the country’s population belong to the 15to 29-year-old age group, and has a predominantly young population.

Combined with an additional 33.4 percent of Filipinos below 15 years old, it could be estimated that around 60 percent of the Philippine population is below 30 years old.

Citing the World Bank, the HUDCC said having a large number of young people who cannot find work and decent incomes could result in social and political instability.

“Without the necessary investments in education and technical, as well as life, skills development for the youth, the country’s vast population of young people will end up becom-

27.6%

The proportion of the country’s population aged 15 to 29 ing unproductive or unemployed,” the HUDCC said.

This is the reason Robredo included the youth on a six-point agenda that she bared at the conference in Quito, Ecuador.

The agenda includes the need to invest in human capital through education and skills, and capacitate local governments to plan for a rapidly urbanizing population.

She said there is also a need to mainstream climate-change adaptation and disaster risk reduction through land-use planning. Without these, the country faces the reduction or eradication of the gains of citycentered economic growth.

“Investment in education and skills development for them is needed, so they can become the driving force of the fast-modernizing, urban economy,” Robredo said in her statement.

The United Nations Conference on Housing and Sustainable Urban Development or Habitat III is the third global summit that aims to generate the world’s New Urban Agenda.

It is one of the first global conferences after the Post-2015 Develop-

FILE PHOTO

ment Agenda or the 17 Sustainable Development Goals, which has a goal dedicated to making cities inclusive, safe, resilient and sustainable.

The seven targets of the goal include ensuring access for all to adequate, safe and affordable housing and basic services, as well as the upgrade of slums worldwide.

The targets also include enhancing the inclusive and sustainable urbanization and capacity for participatory, integrated and sustainable human-settlement planning and management in all countries.

PHL economic growth to beat expectations in medium-term despite political noise—report

By Bianca Cuaresma @BcuaresmaBM

T

he Philippines’s economic expansion could be faster than expected in the medium term, despite recent political noise, as the President’s rhetoric is not likely to derail the country’s momentum down the line, an international think tank said.

Nomura Global Research, in its recent assessment of Philippine economic dynamics, said the Philippine economy has laid ample strength in its fundamentals that a bright future is still ahead of the country, no matter the controversial style of governance of the new administration.

In particular, the Japan-based think tank raised their forecast of the country growth in 2018 to 6.5 percent. They, meanwhile, retained 2016 projections at 6.7 percent and 2017 at 6.3 percent.

“The Philippines has a population of 101 million people, with a median age of 23.5 years, and the size of its work force is set to expand over the next three decades, besting even Vietnam and Indonesia,” Nomura said.

“The unemployment rate has fallen substantially to 5.3 percent [the lowest in a decade], which suggests this demographic profile is slowly turning into an advantage, as more jobs are generated to productively absorb new entrants into the labor force,” it added.

The global think tank also has high optimism on the new administration, despite controversies surrounding statements made

by President Duterte.

“There are early signs of strong adherence to the 10-point economic agenda, which stresses

The Philippines has a population of 101 million people, with a median age of 23.5 years, and the size of its work force is set to expand over the next three decades, besting even Vietnam and Indonesia.”—Nomura

policy continuity and more reforms. We think the government will likely make steady progress on cutting red tape and corruption, which we view as a credible commitment from [President] Duterte, given his track record in promoting good governance in Davao,” Nomura said.

“We also see a high likelihood of it implementing comprehensive tax reforms, including cuts to both personal and corporate tax rates, which has already been presented to

Congress,” it added.

The think tank said the Duterte administration is set to deliver better infrastructure projects than the previous administration, as crucial reforms made by the Aquino administration allow him to readily implement pending projects.

This, Nomura said, will be beneficial for the country’s goal to attract more foreign direct investments to the Philippines.

ERRATUM

THE caption for the picture that appeared on this page on October 18, 2016, should have read “LUNCH WITH THE MEDIA Facilities Managers Inc. (FMI) President and CEO Bert Bravo (center) discusses the group’s upcoming

anniversary celebration during an intimate lunch with the media held in Makati City. Also present during the event are (from left) FMI Director Vida Ty and Director Ding Doplayna. ALYSA SALEN.” We regret the oversight.

A4

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Friday, October 21, 2016

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Senate energy panel chairman cool to PEMC transformation into IMO T

By Lenie Lectura

@llectura

he chairman of the Senate Committee on Energy said on Thursday there is no need to rush the implementation of a provision of the Electric Power Industry Reform Act (Epira) of 2001 that seeks to transform the Philippine Electricity Market Corp.

(PEMC) into an independent market operator (IMO).

“I think there’s no sense of urgency for them [PEMC] to become [an] IMO. It’s functioning the way it is right now. Kaya gusto lang natin maging IMO is para walang

interference [Noninterference precedes the need for an IMO transformation],” according Sen. William T. Gatchalian.

Under Epira, PEMC is supposed

to last for only one year, and would transition into an IMO. So far, PEMC has existed for 12 years now.

PEMC is the operator of the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

“I think we have time to evaluate that. I have to look at it closely, but my sense there is there’s no rush to look at that,” Gatchalian added.

The Department of Energ y (DOE) earlier issued a draft circular that sets the guidelines for the transition.

The transfer of the WESM to the IMO is also meant to dispel concerns of continuing government intervention at the WESM. Currently, the PEMC board is a 15-man body made up of representatives from each sector of the electric power industry, as well as independent members.

The PEMC Board is chaired by the DOE secretary until its transition into an IMO. Based on the draft circular, the composition of the sevenmember IMO Board includes an economist, academician, finance expert, lawyer, engineer, governance member and the president of the IMO. The economist shall hold office for one year; the academician and lawyer member for two years; the finance member for three years; and the engineer and governance member for four years, The current PEMC president shall carry over to be the IMO president for one year to ensure smooth transition. The president shall be selected every two years.

The economist has to have a five-year experience in a management position related to financial or spot markets, while the

Tesla says all vehicles in production to have full self-driving capability

Tesla’s Model 3 sedan is scheduled to begin deliveries in late2017 and starts at $35,000. TESLA MOTORS PHOTO/BLOOMBERG NEWS

T

esl a Motors Inc. CEO Elon Musk said all vehicles currently being produced at its factory, including the upcoming Model 3, will have full self-driving capability.

Every vehicle built “will have the hardware needed for full selfdriving capability at a safety level substantially greater than that of a human driver,” the company said in a statement on Wednesd ay. T he vehic les have eight cameras and 12 sensors giving full 360-degree visibility, the company said.

“To make sense of all of this data, a new onboard computer with more than 40 times the computing power of the previous generation runs the new Tesla-developed neural net for vision, sonar and radar processing software,” Tesla’s statement said. “Together, this system provides a view of the world that a driver alone cannot access, seeing in every direction simultaneously and on wavelengths that go

far beyond the human senses.”

For Musk, bringing the Model 3 —more affordable than the Model S sedan or Model X sport-utility vehicle—to market fulfills the company’s long-standing vision of accelerating the world’s transition to sustainable transportation.

Customers earlier this year stood in long lines at Tesla stores around the world to place $1,000 reservations, giving Musk an “iPhone momement” that is unprecedented in the auto industry.

Musk first revealed the Model 3 in March at Tesla’s design studio in Hawthorne, California. He said then that the driver-assist Autopilot features would be standard on the car, which also would have a continuous plane of glass to give the cabin an expansive feeling of openness. And, in a March 30 tweet, he hinted that there was more to come: “Tomorrow is Part 1 of the Model 3 unveil. Part 2, which takes things to another level, will be closer to production.”

The tweet prompted speculation that “level” refers to the auto industry’s scale for vehicle automation, with Level 0 being none and Level 5 as a fully self-driving car.

Tesla’s current Autopilot system would be classified as Level 2, with the expectation that the human driver is consistently monitoring the environment and is prepared to engage as needed. The Palo Alto, California-based company has come under fire from Consumer Reports and others for using the name Autopilot.

Tesla now makes the Model S sedan and Model X sport utility vehicle on a shared assembly line in Fremont, California, is preparing to introduce the more affordable Model 3 in late 2017 and has said it will eventually add a semitruck and transit bus. The company also makes the Powerwall battery for homes and the larger Powerpacks for commercial businesses and utilities.

About 373,000 preorders for the

Model 3 have been placed, according to figures Tesla hasn’t updated since May. The car will seat five adults and is expected to begin at $35,000 before incentives.

By auto-industry standards, Tesla is small, making about 100,000 cars a year, although hopes to increase its production to 500,000 vehicles per year by 2018.

Google, ride-hailing service Uber and an assortment of other automakers also are working on a range of self-driving cars in an effort to ultimately turn the steering wheel over to robots.

Consumer watchdogs have questioned whether Tesla’s first Autopilot system was ready to be on the road after a driver earlier this year using the system was killed when his Model S sedan struck a tractor-trailer in Florida.

Tesla maintains Autopilot wasn’t at fault. Government regulators are investigating the circumstances of the accident.

Bloomberg News, AP

academic has to have a doctorate degree and has held a two-year senior academic position in a college or university related to economics or science.

The finance person, meanwhile, has to have more than five years’ experience in senior management position in trading in a financial market.

The lawyer should be a senior partner in a law firm of a size of a 15 or more lawyers, or who has held a position as a government lawyer and who has engaged in litigation and appealed in trial courts.

The engineer has to have an expertise in the operation of the transmission or generation systems for more than two years at a senior management level, and has more than 10 years’ experience working in an energy-related field.

The governance members has to have a directorship position in a publicly listed company or a private corporation with a size over 50 full-time workers.

The president, on the other hand, should have a minimum of five years’ experience in the electric-power industry.

I think there’s no sense of urgency for them [PEMC] to become [an] IMO. It’s functioning the way it is right now.”—Gatchalian

Opec price war offers meager rewards as US shale survives

W

hen the Organization of the Petroleum Exporting Countries (Opec) started its price war, the US shale boom looked doomed.

Two years and one Opec policy U-turn later, executives at the annual Oil & Money conference in London painted an upbeat outlook for shale, with giants like Exxon Mobil Corp. and ConocoPhillips saying the industry hasn’t just survived the bust, but will continue to have a global influence.

“We have confirmed the viability of a very large resource base in North America,” said Ex xon CEO Rex Tillerson.

“Never bet against the creativity and tenacity of this segment of our industry.”

The consequences will reverberate through the energy industry and the world economy. A cohort of shale producers ready to boost output when prices rise could cap any recovery at about $60 a barrel for the next couple of years, regardless of any Opec moves to cut production. Instead of falling victim to the Saudi-led battle for market share, Tillerson said the industry will provide the “spare capacity” to meet future demand.

It’s a view that puts Tillerson at odds with some of the industry’s most powerful voices, including Khalid Al-Falih, the Saudi energy minister, and Patrick Pouyanne, the CEO of French oil giant Total SA. Both men warned that two years of low prices and investment cuts have left the global industry ill equipped to supply enough oil by the end of the decade.

“Many analysts are now sounding warning bells about future supply shortfalls, and I am in that camp,” Al-Falih said.

Whether a shortage arrives by the turn of the next decade is yet to be seen. Fatih Birol, executive director of the International Energy Agency, said oil prices of about $50 to $60 a barrel can stimulate enough supply for short-term needs until 2020.

The Paris-based adviser has also warned about the long-term impact of unprecedented cuts in spending.

In the meantime, the industry’s nearly unanimous view is that shale output can grow again.

The US Energy Information Ad-

ministration expects crude production to start rising again in the first quarter of 2017, reaching 8.8 million barrels a day by the end of next year, from about 8.4 million now. That would still be short of the 9.6-million-barrela-day peak in June 2015.

Still, after a two-year price war the industry has emerged battlehardened, with executives saying over panel discussions and cocktail parties in London that they are more optimistic now they can weather low prices.

ConocoPhillips CEO Ryan Lance told the conference on Tuesday that US shale output will “come back strongly” supported by lower costs. New oil wells are viable in the Permian, Eagle Ford and Bakken shale basins at just $40 a barrel, he said.

“The oil price is essentially unchanged from the conference last year, but the tone from the companies seemed more optimistic,” said Lydia Rainforth, oil equity analyst at Barclays Plc. in London. “Most speakers at the conference referenced $50 to $60 a barrel as a reasonable oil price for the oil market near term.”

In an unusually open speech, Andrew Gould, board director at state-owned Saudi Arabian Oil Co., said that a $50- to $60-abarrel price would be “sufficient to develop the low-cost resources to provide increases that will be necessary over the next three to four years.”

West Texas Intermediate, the US oil benchmark, which closed at the highest price in 15 months on Wednesday, lost 22 cents, or 0.4 percent, to $51.38 at 12:21 p.m. Singapore time.

Perhaps the best indicator of the changing fortune of shale is the plunge in yields of junk energy debt. At its worst in February, investors sold off shale bonds, pushing yields to a record 21 percent. Today they are trading at 7 percent, a level similar to when oil traded at about $100 a barrel.

“The equity and debt market is open for US shale companies”, said David Foley, CEO of Blackstone Energy Partners Lp., the private equity fund. After a two-year hiatus, initial public offerings have returned to the American oil patch, with Extraction Oil & Gas Llc. raising $633 million this month. Bloomberg News

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Indonesia’s new monetary weapon blunted by bad loans

B

ank Indonesia’s shift to a new benchmark interest rate was designed to boost transmission of monetary policy via more bank lending. One problem: getting the banks onboard.

Rising bad loans are curbing the effectiveness of rate cuts, with riskaverse lenders passing on about half of the 100 basis points of easing carried out this year through August, according to Bank Indonesia.

Economists are almost evenly split on whether the central bank— which announced in April it was adopting the seven-day reverse repurchase rate—will cut for a sixth time this year at its meeting on Thursday.

The new benchmark, which replaced the 12-month reference rate in August, is having some impact: deposit rates and corporate bond yields have declined almost in line with central bank easing. But lenders saddled with souring debt aren’t hurrying to follow suit after their nonperforming loan ratios climbed to 3.2 percent at the end of July, from 2.7 percent a year earlier, according to Indonesia Financial Services Authority.

“Transmission isn’t the issue here, it’s risk,” said Doddy Zulverdi, executive director for monetary management at Bank Indonesia. “Banks are trying to rein in nonperforming loans, so they’re not in a position to bravely lower rates to give out more and more loans.”

Average bank-lending rates in Indonesia have fallen by 52 basis points this year through August, according to Zulverdi. In that period, the central bank made four cuts of 25 basis points each. During Bank Indonesia’s last bout of easing when rates were lowered by 100 basis points

over five months through February 2012, lending rates only declined 26 basis points.

Central bank easing always takes time to filter through to the economy, said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. (OCBC) in Singapore. Indonesian lenders have long memories, too, and many are probably wary after being burned in past periods of volatility, including spikes in inflation that came “out of the blue,” he said.

“The policy rate suddenly goes up like crazy, as well, and banks that have positions for a low-rate environment suddenly get whacked,” Wiranto said. “They have seen quite a few cycles.”

Wiranto cited Bank Indonesia’s decision to raise its reference rate at an unscheduled meeting in November 2014 to counter inflation triggered by a government decision to trim fuel subsidies. The central bank was also forced to raise rates in 2013 when the rupiah tanked amid tapering talks by the US Federal Reserve, and five years earlier it hiked because of oil-price movements, he said.

Fed hike?

External factors are again on the minds of Indonesian central bank officials as they prepare to meet: investors are pricing in about a two-thirds chance of a US rate hike in December. The Federal Open Market Committee voted 7-3 for no change in September, with minutes

Thais honor late king by getting tattooed

A tattoo artist works on the strokes of the Thai number 9 showing a silhouette of the late King Bhumibol Adulyadej, also known as King Rama IX, in Bangkok, Thailand, on Wednesday. In honor of the memory of late Thai King Bhumibol Adulyadej, some Thais collect portraits, some purchase commemorative banknotes while others get tattooed. AP

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ANGKOK—In honor of Thailand’s late king, some Thais are collecting portraits of the monarch, some are purchasing commemorative banknotes—and some are getting tattooed.

The death of revered King Bhumibol Adulyadej last week, after a reign of 70 years, triggered an outpouring of grief. Many Thais have been wearing black, praying at temporary shrines and taking part in activities, such as alms giving.

“I wanted to have a memory in my heart about the loss of our king.

He’s not going anywhere, he’ll always be here,” said Supreeda Sorapakdee, 42, as he pointed to his left chest. On it is a new tattoo of the No. 9 in Thai with a silhouette of the king. Bhumibol’s title was King Rama IX. “This tattoo goes right above my heart,” he said.

Sak Lai Tattoo Studio, where Supreeda got his tattoo, has had more than 10 customers requesting designs related to the king since his death on October 13. Fifteen more have made appointments for the coming week. Other tattoo parlors in Bangkok are also facing completely filled schedules.

“I feel like this is a phenomenon that cannot be found in any other country,” said Leck NY, owner and artist at Sak Lai Tattoo. “People want to record the memory of their love, respect and loyalty for the king onto their body. This is different from other ways of expressing love—it’s a deeper and more personal expression because it’s with you forever.” Quotes about the king are also popular designs.

Another tattoo studio, Inkception, has had more than 20 customers for king tattoos and has a stream of bookings.

“Some people come in without having ever been tattooed before, and they come in requesting a tattoo related to the king,” Inkception tattoo artist Pornthep Nutamarn said, as he finished a design on a woman’s arm reading “King of Kings 9.” “It’s like a memory, so that any time you see it, you can remember his majesty.” AP

released last week describing the decision as a close call and several members saying a hike was needed “relatively soon.”

Indonesia’s Finance Minister Sri Mulyani Indrawati said in an interview earlier this month that central bank decisions are “always driven by the evidence, the data,” when asked whether her meetings with Federal Reserve (the Fed) Chairman Janet Yellen conveyed a greater sense of urgency among US officials.

“Many central banks in emerging countries, developing countries are already anticipating that this is going to come,” Indrawati said, referring to tighter US monetary policy.

Thursday’s decision

Fourteen of 26 economists surveyed by Bloomberg expect Indonesia’s central bank to keep the benchmark rate at 5 percent on Thursday, while the rest predict a 25-basis-point cut.

Coordinating Minister for Economic Affairs Darmin Nasution said there was no reason to refrain from lowering the rate for a second straight month, with inflation at the lower end of the target band of 3 percent to 5 percent, local newspaper Kontan reported.

“We expect Bank Indonesia to give time for the effective transmission of monetary policy in the domestic financial markets after the interest-rate cut last month,” Juniman, chief economist at PT Bank Maybank Indonesia, who uses one name, said by e-mail. He expects the central bank will pause after cutting for a fifth time in September.

OCBC’s Wiranto, on the other hand, said Bank Indonesia was likely not done cutting rates this year and wanted to make one more, probably before the US election in November and the Fed decision in December.

“This month is the most likely candidate,” he said. Bloomberg News

Editor: Max V. de Leon • Friday, October 21, 2016 A5

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Friday, October 21, 2016 • Editor: Lyn Resurreccion

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Iraqi special forces join Mosul offensive vs IS

briefs

Unesco urges halt to plan for Bangladesh coal plant DHAKA, Bangladesh—The United Nations (UN) agency devoted to preserving world heritage has joined environmental groups urging Bangladesh to halt plans for a massive coal-fired power plant near ecologically sensitive mangrove forests on the country’s coast.

The United Nations Educational, Scientific and Cultural Organization (Unesco) and the International Union for Conservation of Nature say in a report released this week that the project poses a “serious threat” to a region that protects the nation from flooding and holds one of the world’s last populations of wild tigers.

Bangladesh countered on Thursday that the concerns were misplaced, and that construction would continue. It says the 1.3-gigawatt power station is crucial to expanding electricity capacity in a country where only six out of 10 people have access to power. The country’s junior Power Minister Nasrul Hamid said Unesco’s report ignored government assurances that the plant would be safe. AP

Strike enters 2nd day at 14 Pennsylvania state universities HARRISBURG, Pennsylvania— Professors at 14 Pennsylvania state universities are expected to hit the picket lines again on Thursday as their strike enters its second day.

Members of the Association of Pennsylvania State College and University Faculties went on strike at 5 a.m. on Wednesday after contract negotiations with the state stalled. The union represents more than 5,000 faculty and coaches.

The Pennsylvania State System of Higher Education said it made concessions and gave the union its best offer on Tuesday night.

Spokesman Kenn Marshall said the state system was disappointed the union decided to strike because officials felt they had made significant progress overnight toward a settlement. AP

Germany: Officer dies after raid on anti-gov’t extremist BERLIN—A German police officer has died a day after being shot by an anti-government extremist during a raid. The police in Bavaria say the officer died in a hospital early on Thursday as a result of his injuries.

The 49-year-old shooter was arrested on Wednesday by an armed response unit that had been sent to his home in the Bavarian town of Georgensgmuend to confiscate more than 30 weapons he legally possessed for hunting. Local authorities had revoked his license because he appeared increasingly unreliable.

The man, whom they didn’t identify, was a supporter of the Reich Citizens’ Movement, an extremist group that refuses to acknowledge the authority of the post-war Federal Republic of Germany. Three other officers were injured in the shootout— one from gunfire and two others by flying glass. AP

Israeli trekker dies in Himalayas in India LUCKNOW, India—An Israeli trekker died after falling into a Himalayan crevasse, the second such accident involving foreigners in northern India in the past week, police said on Thursday.

Ariel Frajman was on an expedition with his wife and a son to the Gomukh glacier, which is about 4,460 meters high in Uttarakhand state, police officer Daddan Pal said.

Frajman slipped and fell into a gorge on Wednesday, Pal said.

Arijail Spira, an Israeli embassy spokeswoman, said his body was being brought to New Delhi. His death comes after two members of a Polish team died in the last week, while scaling a 6,543-meter high peak in the area. AP

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A Syrian girl is sitting on her family’s belongings as they prepare to leave with other families from the government-besieged Damascus suburb, of Moadamiyeh, Syria, on Wednesday. A Syrian negotiator says 38 buses carrying nearly 2,000 people, including 700 gunmen, have been evacuated from a government-besieged Damascus suburb, following a deal to empty it of rebels. AP

Syrian forces prepare corridors out of Aleppo

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EIRUT—Hundreds of residents left a formerly rebel-controlled suburb of the Syrian capital of Damascus on Wednesday, as government and Russian forces prepared to open corridors out of the contested city of Aleppo in the hopes of facilitating an exodus from its rebel-held quarters.

Aleppo’s besieged eastern quarters experienced relative peace for the second consecutive day in the run-up to the hoped-for evacuation on Thursday, after weeks of bombardment left the area in ruins.

Russia’s military has promised two corridors will be opened for militants to flee to the neighboring rebel-held province of Idlib, between 8 a.m. and 7 p.m., while other corridors will allow civilians to move to government-held areas.

The government’s overture to rebels and civilians trapped in Aleppo’s east follows a pattern of evacuations around the country that the United Nations has likened to “forced displacement.”

On Wednesday some 2,000 residents of the once autonomous Moadamiyeh suburb of Damascus were carried by government buses to Idlib as part of an arrangement to restore government control after three years of siege at the hands of the military.

Hassan Ghandour, a former Moadamiyeh resident who liaised between the suburb and besieging forces, said on Wednesday the evacuees included 700 gunmen. He said the government is to release all detainees from the suburb in exchange for the evacuation.

Severa l ac t iv ists a l so lef t with the convoy. Wassim al-Ahmad told The Associated Press it would be “impossible” to live again under government authority, saying he didn’t trust official promises for amnesty.

Some of those remaining in Moadamiyeh struck a defiant tone.

“I’m not going to settle anything

640 The estimated number of people, who have been killed in rebel-held parts of Aleppo since a truce brokered by the US and Russia collapsed on September 19

with the government,” said local resident Mahmoud, who declined to give his family name, out of safety concerns. “I’m going to stay in my home.”

“I’ve spent five years of my l ife besieged here. I’ve been through war, siege, starvation... bombardment and poison gas— I’ve sur vived with all this so I can stay here.” The suburb and two other areas around the capital were gassed with sarin poison in 2013, according to a UN investigation. A Human Rights Watch report concluded the government was the most likely culprit.

Some 28,000 people remain in Moadamiyeh, down from a prewar population of 105,000, according to the government.

In Aleppo, government buses queued at checkpoints leading to the besieged east prepared to take evacuees to Idlib on Thursday, according to the media arm of the Lebanese militant group Hezbol la h, which is f ighting a longside the gover nment in

Syria. The government’s foreign ministry said soldiers were withdrawing from the designated corridors to reassure evacuees.

It is unclear how many people will take up the government’s offer after weeks of siege and bombardment pulverized the east and shattered its medical network.

The Britain-based Syrian Observatory for Human Rights says more than 640 people, including 128 children, have been killed in rebel-held parts of Aleppo and t he su r rou nd i ng r u ra l a rea s since a truce brokered by the United States and Russia collapsed on September 19. It said 88 people, including 14 children, were killed in retaliatory shelling on government-held Aleppo.

Bassam Heji, a member of the Nour el-Din al-Zinki rebel faction, said the Russian offer is a “trap” that only ref lects its intention to “exterminate” the residents of the eastern, rebelheld Aleppo neighborhoods.

The arrangement follows a proposal by the UN Syria envoy, Staffan de Mistura, to allow al-Qaedalinked militants to leave Aleppo in exchange for a truce and local autonomy for the city’s eastern districts. Rebels, along with many residents, rejected the offer.

Russia and Syria moved ahead unilaterally with the evacuation arrangements without making any promises for an extended cease-fire or self-administration, although Russian President Vladimir Putin has held out the hope of an indefinite halt to his country’s airstrikes on Aleppo after meeting with the French and German leaders, who condemned Moscow’s actions in the Syrian city.

Russia had promised an eighthour pause on Thursday in attacks on the city by Syrian government forces under the cover of Russian air power in order to allow suffering civilians to leave and to give rebels safe passage.

“We informed them of our intention to continue, as much as possible, considering the situation on Syrian territory, a pause in the air strikes. We are ready to do this for as long as there are

no clashes with rebel formations entrenched in Aleppo,” Putin said after meeting German Chancellor Angela Merkel and French President François Hollande in Berlin.

Turkey’s President Recep Tayyip Erdogan said his government would work with Russia’s government to evacuate the al-Qaeda-linked Fatah al-Sham Front, formerly known as Nusra Front from the east.

Erdogan warned about the possibility of an influx of at least one million people to Turkey in the event of a population movement from Aleppo.

“We cannot pay this cost. Those who incite this must sit down with Turkey and talk,” he said.

Elsewhere, a 44-truck convoy delivered food aid and health supplies to the rebel-held pocket of Douma, east of Damascus, the UN and the Syrian Arab Red Crescent said. The suburb and surrounding towns are besieged by progovernment forces.

Kurdish-led forces, meanwhile, pressed their campaign to drive Islamic State (IS) militants from areas in northern Aleppo province, expanding the front line with rival Turkish-backed opposition fighters also operating in the area, according to local rebels and activists.

The Russian military accused a US-led coalition air strike of killing six civilians in Hassajek, hours before the announcement that the village had been taken from IS. Despite the brief lull in the fighting for Aleppo, most of the surrounding province has become Syria’s hottest theater of combat, showcasing the complexity of the terrain where rival forces are vying for control.

In the area of Hassajek, three r iva l g roups are batt l ing IS: t he Ku rd ish-led forces, Tu r key-backed Sy r ian rebels and troops loyal to the government of President Bashar a l-A ssad.

The Britain-based Syrian Observatory for Human Rights said the Kurdish-led forces, known as the Syrian Democratic Forces, gained control of Hassajek, killing at least 10 IS militants in fighting there. AP

HAZER, Iraq—Iraqi special forces charged into the Mosul battle on Thursday with a predawn advance on a nearby town held by the Islamic State (IS) group, a key part of a multipronged assault on eastern approaches to the besieged city.

The addition of the elite troops, also known as counterterrorism forces, marked a significant intensification of the fight for Iraq’s second-largest city. As they advanced, attack helicopters fired on the militants and heavy gunfire echoed across the plains.

Maj. Gen. Maan al-Saadi said the elite Counterterrorism Forces advanced on the town of Bartella with the aid of US-led coalition airstrikes and heavy artillery on the fourth day of a massive operation to retake Iraq’s second-largest city.

“God willing, we will take this town today,” he said.

The special forces are expected to lead the way into Mosul, where they will face fierce resistance in an urban landscape, where IS militants are preparing for a climactic battle. The offensive is the largest operation launched by Iraqi forces since the 2003 US-led invasion, and is expected to take weeks, if not months.

The Kurdish forces known as peshmerga, who are also taking part in the offensive, announced a “ large-scale operation” to the north and northeast of Mosul on Thursday. “The operation will be in three fronts,” the peshmerga said in a statement, and follows recent gains by the peshmerga to the east of Mosul and Iraqi security forces to the south.

Peshmerga forces stationed on mountains northeast of Mosul descended from their positions and charged toward the front line.

They used bulldozers and other heavy equipment to fill trenches and moved armored vehicles into the breach after about an hour of mortar and gunfire at IS positions below in the village of Barima.

Military operations also appeared to be under way in the town of Bashiqa, northeast of Mosul. Thick smoke could be seen billowing from the town early on Thursday. A day earlier, Bashiqa was pounded by air strikes and mortar fire from Kurdish peshmerga positions high above.

The approaches to Mosul run through clusters of mostly abandoned villages where IS militants have planted roadside bombs and other booby traps. Bartella, a traditionally Christian town which fell to IS two years ago, is believed to be empty of civilians.

“Our intelligence tells us the district is full of improvised explosive devices [IEDs],” al-Saadi said, referring to the homemade explosives IS has planted in huge numbers during past campaigns.

Amer al-Jabbar, a 30-year-old soldier with the Iraqi special forces, said he was happy to be taking part in the attack and hoped to avenge two brothers killed while fighting for the Iraqi security forces.

“I had one brother who became a martyr in 2007 and another who became a martyr in 2014,” he said. “I want to avenge them and I’m ready to die.” Another soldier called in coordinates for airstrikes by Iraqi attack helicopters hovering overhead. One of the helicopters was struck by a sniper, but managed to land safely.

An intense gun battle erupted as the convoy of some 1,000 special forces made its way toward Bartella. The troops were about 15 kilometers from Mosul. IS captured Mosul during a lightning advance across northern Iraq in 2014, and IS leader Abu Bakr al-Baghdadi announced the formation of a self-styled caliphate from the pulpit of a Mosul mosque. Mosul is the largest city controlled by the extremist group and its last major urban bastion in Iraq. AP

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Trump won’t say he’ll accept election results if he loses

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onald Trump refused to say he’d accept the election’s results if he loses, an extraordinary statement on one of the underpinnings of US democracy, as one of the most unconventional US presidential campaigns entered its final stretch.

Hi l lar y C l inton ca l led t he Republican nominee’s remark “horrifying” in what was one of the most dramatic moments on Wednesday night in Las Vegas during their final debate before the November 8 election.

“I will look at it, at the time,” Trump said, as he accused the media of dishonesty and being part of rigging the election against him.

“They’ve poisoned the minds of the voters, but unfortunately for them I think the voters are seeing through it.”

Always the showman, Trump said he’d let Americans know his decision about accepting the results after the election. “I will tell you at the time,” he said. “I’ll keep you in suspense.”

Clinton expressed shock, echoing comments made earlier this week

by President Barack Obama on the importance of a peaceful transfer of power in the US. “Let’s be clear about what he is saying and what that means,” the Democratic nominee said.

“He is denigrating, he’s talking down our democracy, and I, for one, am appalled that somebody who is the nominee of one of our two major parties would take that kind of position.”

Running mate

Cases of vote fraud are rare in the US and Trump has offered no evidence of widespread irregularities.

Less than an hour before the debate, Trump’s running mate, Indiana Gov. Mike Pence, said in a Bloomberg interview that he and Trump had “made it clear that we’ll accept the will of the American people” and expressed confidence that they would win.

But after the debate, Pence shifted. He told reporters that there is fraud in some polling locations and so the nominee will “take a wait and see approach.”

Some of Trump’s allies also tried to frame his refusal to say he would concede by suggesting it won’t matter, because he’ll win or that a challenge to the results may be required.

Trump’s allies

Sen. Jeff Sessions of Alabama told reporters that Trump will accept the results “if they’re fair and he’s had the opportunity to challenge them if need be.”

Republican National Committee Chairman Reince Priebus said he thinks there can be widespread voter fraud and Trump “ isn’t willing to carte blanche concede it isn’t possible.” Former Alaska Gov. Sarah Palin, the party’s 2008 vice-presidential nominee, told reporters after the debate that she has no reason to believe the election is rigged.

“I can’t say the election is rigged because it hasn’t taken place yet, but let us hope that these are legitimate votes taken and, of course, the results will be accepted,” said Palin, who endorsed Trump during the primary race. “We’ll live with it if it’s legit.”

‘Great disservice’

Other Republicans expressed alarm. Sen. Lindsey Graham of South Carolina said Trump is doing the party and the country “a great disservice” by suggesting the outcome of the election is out of his hands. “If he loses, it will not be because the system is ‘rigged’ but because he failed as a candidate,” Graham said on Twitter. Arizona Sen. Jeff Flake, a vehement Trump opponent, called Trump’s assertion “beyond the pale.”

With 19 days left in the campaign, the two are scheduled to be in the same room just one more time before the election, at

Thursday night’s annual Al Smith charity dinner in New York.

T he debate, moderated by Chris Wallace of Fox News, came after a tumultuous few weeks for Trump. His slide in state and national polls started with a lackluster performance in the first debate on September 26 and continued with the release of a 2005 recording of Trump making lewd comments about women and subsequent allegations from several women that he inappropriately touched them.

Substantive issues

At the start, the two candidates offered sharply differing views on the Supreme Court, gun control and abortion. Although much of the debate dealt with substantive issues, it quickly got personal and combative when it turned to accusations against Trump that he groped women and to questions of whether he tolerated Russia’s interference in the US election.

The candidates repeatedly talked over each other, with Trump interjecting, “wrong” several times as Clinton spoke. At one point, as she made a jab about his taxes while talking about the Social Security Trust Fund, he proclaimed: “Such a nasty woman.”

Trump accused Clinton of pushing the stories of the women who came forward to allege sexual misconduct, and he again denied behaving inappropriately.

“I didn’t even apologize to my wife, who’s sitting right here, because I didn’t do anything,” Trump said. Of his accusers, he said, “I think they want either fame or her campaign did it.”

Clinton’s criticism

Clinton criticized Trump over the allegations and his general treatment of women, a voting bloc that has been central to her lead in the polls.

“Donald thinks belittling women makes him bigger,” she said. “He goes after their dignity, their selfworth, and I don’t think there is a woman anywhere who doesn’t know what that feels like.”

A snap poll conducted immediately after the debate by CNN found 52 percent of those who watched thought Clinton won, compared with 39 percent who said Trump was the winner.

The two candidates also clashed over Russia and the hacking of Democratic Party e-mails that US officials have blamed on President Vladimir Putin’s government.

Clinton def lected questions about leaked e-mails from her campaign by criticizing Trump for failing to denounce Russian interference in the US election. Trump shot back by saying the US has no idea who was behind the hacking.

Putin’s role

“Hillary you have no idea,” he said.

“She doesn’t like Putin because Putin has outsmarted her at every step of the way.” Trump has repeatedly praised Putin as a strong leader and refused to put the blame on Russia for hacking Democratic Party and Clinton campaign files even though US security and intelligence officials have done so.

“I’ve never met Putin. This is not my best friend, but if the United States got along with Russia it wouldn’t be so bad.”

Clinton suggested that Putin prefers Trump because “he’d rather have a puppet as president.”

Wallace asked Clinton whether she kept the pledge during her 2009 confirmation hearing as secretary of state to avoid any conflict of interest with the Clinton Foundation, especially with questions about whether those seeking grants involving Haiti relief were considered separately from non-donors.

Clinton said everything she did as secretary of state was proper, and the foundation was a “world-renowned charity.’’ Trump called it “a criminal enterprise.” Bloomberg News

Friday, October 21, 2016

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Treasuries volatility nears 2-year low before US polls

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gauge of swings in Treasuries approached the lowest in almost two years, as investors refrain from setting new positions before the US presidential election and amid the outlook for higher Federal Reserve (the Fed) interest rates.

Three-month implied volatility on US 10-year interest-rate swaps, a measure of projected yield fluctuations over the next 90 days, touched 68.8 basis points on Thursday. It reached 67.50 level last month, the lowest since November 2014, according to data compiled by Bloomberg.

“If you want to buy bonds, it’s not a good time,” said Hiroki Shimazu, an economist and strategist at the Japanese unit of MCP A sset Management in Tokyo.

“Whoever wins the presidential election will be negative for the bond market because they’ll plan a large economic stimulus package. There’s higher inf lation.”

In their third and final debate, the two main US presidential

68.8 The basis points reached in the three-month volatility on US 10-year interest-rate swaps

candidates battled over their tax and spending plans, with Democratic contender Hillar y Clinton saying she wanted to see the “ biggest jobs program since World War II.” The Republican nominee Donald Trump presented himself as an expert negotiator, repeating his

pledge to renegotiate the North American free-trade agreement if elected.

Trump trailing

The face-off came after a tumultuous few weeks for Trump, with Clinton leading the Republican nominee by 9 percentage points in a Bloomberg Politics poll of likely voters nationwide. Clinton’s policies are better-known than Trump’s, and riskier assets will benefit as her candidacy improves, while financial markets may become more volatile if Trump gains ground, Shimazu said.

The yield on 10-year Treasury notes was little changed at 1.75 percent as of 12:53 p.m. in Tokyo, according to Bloomberg Bond Trader data. The price of the 1.5 percent security due in August 2026 was 97 25/32.

Treasuries have slumped in October as a bond-market gauge of inflation expectations rose to the highest five months. The probability of a US rate increase by December has climbed to 64 percent, Fed fund futures indicate, from 59 percent at the end of September.

Still, Fed Chairman Janet Yellen, in a speech last week, laid out the argument for keeping monetary

policy easy, while hinting at letting the economy run hot.

‘Mostly positive’

The US economy maintained a steady growth pace between late August and early October, as a tight labor market with nascent wage pressures contributed to a “mostly positive” outlook, according to the Fed’s latest Beige Book economic survey.

Traders await the European Central Bank’s policy-setting meeting on Thursday for signals about its monetary stimulus efforts. Most economists in a Bloomberg survey predict it will prolong its bondbuying program, which is soaking up €80 billion ($88 billion) of debt a month, and won’t start to taper its asset purchases before the second half of 2017.

“We’ve got a lot of uncertainty hanging over the markets,” Kathleen Gaffney, the co-director of investment-grade fixed income at Boston-based money manager Eaton Vance Corp., said in an interview on Bloomberg Television this week.

“When you stack up the downside versus the upside, it’s skewed more for the downside” in Treasuries, she said. “You just want to get out of the way.” Bloomberg News

China’s economic change shows Trump’s trade rant is vintage 2005

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onald Trump has fired up his base of supporters with the accusation that China’s stealing American jobs and gaming its currency to stoke exports.

“They are a manipulator, grand master level,” the Republican United States presidential candidate said in a speech at the New York Economic Club last month. He vows to impose punishing trade tariffs of up to 45 percent if China doesn’t change the predatory practices he sees.

Such fiery rhetoric is powerful, but the characterizations are dated—by about a decade. This year shows the US now has far more to fear from an economically hobbled China, where growth is the weakest in decades.

In January the prospect of a Chinese hard landing contributed to a sell-off in stocks in America and around the world. China’s stabilization, through pumping up domestic demand and shifting away from its historic reliance on exports, put a floor under the global economy and markets.

China’s efforts to wean itself off of exports were visible in the latest data released on Wednesday, which showed public investment and consumption were key pillars to the country’s stable 6.7-percent growth last quarter. China’s services sector now accounts for more than half of its $11-trillion economy, while exports are shrinking.

“Donald Trump’s views on China do seem stuck in a time warp,” said David Loevinger, a former China specialist at the US Department of the Treasury and now an analyst at fund manager TCW Group.

China no longer appears the mercantile superpower that Trump represents. That was more applicable back in 2005, when the country’s current-account surplus was still swelling and before it loosened a long-held currency peg to the dollar.

The surplus is now less than 3 percent of GDP, compared with the peak of near-10 percent in 2007.

The International Monetary Fund (IMF) predicts a continued drop to just 0.8 percent by 2021. And rather than actively drive down its currency, China has drawn down foreign exchange reserves to stem its slide and limit destabilizing capital outflows.

Currency policy

Western trading partners, including the US, have abundant evidence for criticizing China over dumping steel on the global market, its glacial financialmarket reforms and corporate-debt binge.

It’s tougher to characterize China as a currency manipulator. True, its currency has weakened 3.7 percent this year. Yet, the yuan has appreciated by more than 22

Port area in Hong Kong Bloomberg News

percent since China abolished its currency peg in 2005.

In the increasingly unlikely event of a Trump administration that slapped punitive tariffs on China, the move would court a devastating trade war that would hurt both economies, TCW’s Loevinger said.

While the US continues to have a gaping goods-trade deficit with China, its exports of services to the country are growing rapidly, reaching $42 billion in 2014 and making it the US fourth-largest services export market, according to the US China Business Council.

Between 2006 and 2014, services exports to China grew more than 300 percent.

China is also an increasing source of investment capital for the US, as its companies and households seek to diversify their holdings at least in part to the world’s No. 1 economy.

As No. 2—and No. 1 when it comes to global growth contribution—the damage from Trump-style tariffs to China would cause pain felt round the world. It would be highly contractionary, deflationary and wipe hundreds of billions off China’s GDP, according to Kevin Lai, chief economist for Asia, excluding Japan, at Daiwa Capital Markets in Hong Kong.

Doubling up

A trade war with China could hamper US access to an economy that’s increasingly consumer driven. Retail sales in the country climbed 10.4 percent in the year through September compared with 2015, a pace that would see them more than doubling by 2023. The gains are vastly outpacing

manufacturing, which rose 6 percent by the same measure.

“His remarks about the yuan being undervalued and the Chinese stealing US manufacturing jobs were headlines from the long past,” Cao Heping, a professor at Peking University’s school of economics, said of Trump.

Debate mention

The China issue featured in the first Trump debate with Democratic rival Hillary Clinton, though wasn’t a focus of their final encounter on Wednesday night at the University of NevadaLas Vegas. Trump in the first tetê-à-tête accused China of manipulating its currency.

A separate area where the China question has been environmental policy. The Trump campaign criticized Clinton for a climate plan that would put costs on the US even as China keeps increasing emissions, the New York Times reported on Wednesday.

Trump hasn’t been alone in criticizing trade with China. Former Democratic candidate Bernie Sanders repeatedly highlighted his opposition in congressional votes to trade deals that ended up, in his view, enabling an exodus of US manufacturing jobs to China, among other countries.

Clinton has said she will take tougher action against “unfair trade practices like when China dumps cheap steel in our markets.” At the same time, she drew a contrast in June with Trump, whom she said “wants to start a trade war with China.” She went on: “We went down that road in the 1930s. It made the Great Depression longer and more painful.”

Xi worries

The candidates’ would-be counterpart, President Xi Jinping, continues to grapple with domestic economic challenges. His government is still relying on cheap credit to keep economic activity moving forward, as private companies limit their investment.

Surging house prices in the biggest cities are casting a long shadow.

And China’s policy-makers have work to do to prove they’re committed to opening the economy more to private and foreign competition. There have been tensions over restrictions on foreign investment—so much so that China is considered the most closed of major economies by the Organization for Economic Cooperation and Development.

Few dispute that China’s cheap manufacturing base has over time hurt employment and wages at America’s factories.

In the first eight months of 2016, the US ran up a $225-billion trade gap with China.

It’s also true that China needs to get a grip on its growing debt pile and unproductive state-dominated industries. Researchers at the IMF this week said authorities in Beijing need to urgently rein in corporate debt.

Yet, unlike the mid-2000s, when China grew at double-digit rates, thanks primarily to export-fueled growth, the current Chinese economy is far more balanced. “Trump’s ideas about China sound old to me,” said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis SA in Hong Kong. “But it is also in the world’s interest that China resolves its longstanding issues to lift productivity even at the cost of lower growth. That is healthier for the world in the medium run.” Bloomberg News

A10 Friday, October 21, 2016 • Editor: Angel R. Calso

Opinion BusinessMirror

editorial

What is truth in the digital age?

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uckminster Fuller was an American inventor best known for the creation of the geodesic dome and for the phrase “Spaceship earth”.

He also researched what he called “Knowledge Doubling”, calculating that until 1900, human knowledge took about one century to double. That time period is now about 13 months.

The human race has progressed from the Industrial Age to what we call the “Digital Age”. The Digital Age is a combination of the “Information Age” and the “Communication Age”. With the coinventions of the computer and the Internet, we have, not only the sum total of human knowledge, almost everything that happens on planet Earth in real time.

Sometime this past Wednesday afternoon, a Tweet was posted on the Twitter account of the Philippine Department of Education (DepEd), announcing that all classes at all levels in Metro Manila would be suspended the following day. Hundreds of schools and thousands of people had this information instantly and made arrangements, many retweeting the information to hundreds of thousands more people.

Some time later, the suspension Tweet disappeared from the DepEd Twitter account. Naturally, there was mass confusion and no firm answers were forthcoming whether or not classes were suspended.

The following day the DepEd “publicly apologized for mistakenly posting false information about class suspensions for Metro Manila.”

The DepEd said they got their information “from a fake account impersonating a ‘trusted’ government agency.”

The DepEd took information from the Internet that they assumed to be true and passed it on without verification, which was then taken as the absolute truth and passed on again. Mass information combined with the instant communication of the digital age is not always correct.

The photos and videos of the police van running over protesters at the United States Embassy took minutes to be distributed to thousands and then to tens of thousands more. Almost instantly, this terrible event was seen, interpreted, discussed and judged. But this is a two-edged sword that can cut both ways.

Before the digital age, that event might have been a “he said, she said” between authorities and the public as to what really happened.

No longer can that occur with everyone now holding a camera, and that is a good development. And while the public has every right to make a “rush to judgment”, sometimes that rush is not right.

Were the injuries a result of one individual’s abominable actions, for which he should spend a very long time in prison? Was this the result of a complete breakdown in the command and control of the officers on the scene, for which senior police officials should also do jail time? Is there an inherent and disastrous defect in police crowd handling that also caused the deaths and injuries at the protest held in Kidapawan, North Cotabato, earlier this year? We must have the answers.

But we all have an obligation to seek and find the truth. However, that will not be achieved if we immediately accept the first information disseminated at the speed of light. As the popular meme goes, “The problem with Internet quotes is that you can’t always depend on their accuracy.”—Abraham Lincoln, 1864.

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Contemplating change at 4 in the morning Tito Genova Valiente

annotations

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y night bus, which had become now an early-morning bus, has rumbled into the great city of Manila. It is 4 in the morning. As it lumbered in, passengers had started calling out their particular destinations. This bus has retained its provincial mind, instead of dropping everyone off at a designated spot, the bus could stop anywhere. This bus technically has no terminal.

As passengers got out, lights went on and off. It started to rain when we reached Buendia, but the bus rolled past the area. The driver stood up when we were under what looked like a cemented awning. We were under a massive flyover under construction. The driver was apologizing for not stopping where the passengers where supposed to be, a comfortable, brightly lighted street corner. That junction was closed because of the ongoing construction.

The passengers could not do anything, as the driver politely pointed to where the corner of Buendia would be. The three ladies slowly got down

and, as I peered from my window, walked across metals and stones, and stepped on rain puddles.

I wonder what these long bridges are for. The project is so big, it could only mean it is an idea for the national: Monoliths for the monolith called “nation”. The cities are not anymore, in the sense of intellect, involved in these structures. These superhighways and massive roads do not have people in mind. We cannot walk on them. They are for cars speeding through cities and cities, until they reach quickly the smaller cities and the endpoints called towns.

The time between 4 and 5 in the morning is my favored time. As young men, my brother and I would leave at about that time the town of San Fernando, on the island of Ticao. My brother had passed on many years ago and was spared of being saddened by this modernization of cities. Still, early mornings remind me of those wondrous summers with kin on an island beautiful in its isolation.

As the bus moved below the construction, it passed by low-cost tenements. How do people navigate their way out of the shambles and danger of huge precast beams and kilometers of steel and iron? When they bought these homes, they were right in front of a big highway that connected them to offices. They could have walked. As it is now, they are under a bridge, which is meant for cars and trucks, and not humans.

It was nearly 5 in the morning. I was too agitated to notice the blackand-gray horizon turn into the pal-

est of orange. Strange that mornings have no charm anymore for us in the cities.

The time between 4 and 5 in the morning are my favored time. As young men, my brother and I would leave at about that time the town of San Fernando, on the island of Ticao. My brother had passed on many years ago and was spared of being saddened by this modernization of cities. Still, early mornings remind me of those wondrous summers with kin in an island beautiful on its isolation.

As the bridge snaked its way through districts of Makati and Manila, I began to think of dirt roads that got muddy after the rain, of cowpaths that led to spring and stream. I thought of those people who did not walk under skies made of concrete and asphalt.

The driver announced once more: Ermita! I looked around and marveled at the ugly hotels huddled among uglier, dark buildings. I assured myself: Inside one of these hotels is a nice room, even a bathtub and a window that looks out to slums and the most beautiful sunset in the world.

E-mail: titovaliente@yahoo.com.

opinion@businessmirror.com.ph

Opinion

Reload

Keep an open mind

BusinessMirror

Siegfred Bueno Mison, Esq.

Teddy Locsin Jr.

THE PATRIOT

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or today, allow me to share excerpts of my personal testimony I shared during the Fellowship of Christians in Government (Focig) General Assembly held in Camp Aguinaldo.

At West Point, my very first roommate was Jim Nelson, a tall Caucasian from Minnesota. I think we were purposely connected by divine providence. He was the first American I met in my life, as I was the first Asian he met in his life. I believe our God planted a seed in me through Jim to have a better understanding of His Word. So, 17-year-old Jim taught 17-year-old Fred basic Bible principles, such as the relationship between good works and faith in God. But due to the toxic schedule of my cadetship, compounded by the exuberance of my youth, my quest for more knowledge about His Word stopped there.

As a side note, after his mandatory service in the US Army, Jim Nelson went to China as a missionary immediately thereafter. He’s now married, has a business providing HR requirements to companies, but still spreads the Word of God in every which way he can.

My 12 years in the Army, 12 years in a law firm, plus my teaching profession in law schools, kept me very busy and preoccupied with the things that mattered in this mortal world—house, car, career, money. However, during my more recent stint with the Bureau of Immigration (BI), through the intervention of Niels Riconalla and his team (Amyjane, Sito and Ronnel), the light within me was rekindled.

I suppose God thought, or rather mandated, that June 2015 was the right time for me to be “reloaded” to finish what Jim Nelson started out in September 1983 when we were teenagers.

Niels a nd his tea m spent four Monday mornings in the bureau sharing life experiences and lessons with the members of our executive committee. Little did I realize that most, if not all, of those in the BI had our own candles within ourselves. Some candles were lit. Some were shining brightly than others. To me, Niels was my Jim Nelson Part 2. After a long 33-year interim period, I was “reloaded”, in preparation to understand and help others light up their own candles. In the BI, Niels and his team managed to bring out the spiritual side of leadership, the values-based management, and the work-life balance necessary to render decent public service. And the way the team presented their life-changing lessons was done in

a way that Muslims, Catholics and members of other religion happily welcomed it.

Personally, my encounter with our God could not have come at a perfect time. I have been separated with my family for a long time now.

My marriage has been annulled. I have a lingering problem with my three wonderful children who I sorely miss—Regina Victoria, J. Siegfred and Regina Elena. But my faith keeps me grounded and steadfast.

The irony in my professional life is that I attended West Point but left, perhaps foregoing the “guaranty” to be a general like my father and my brother. In the BI, some say I did many good things, but was fired, a mere five months before the change in administration. Whatever the BI accomplished during my stint from June 2011 to January 2016, I cannot claim credit nor any of my colleagues in the bureau.

T he s p i r it u a l comp one nt brought by Focig was extremely helpful. But the ultimate credit goes to our omnipresent God. Knowing that I am exactly where He wants me to be, I try to find a silver lining in everything. I worry less now, for I know God is with me now and wherever else I go. My faith tells me our God is already there before me. Psalms 16:8 says, “I know the Lord is always with me. I will not be shaken, for He is right beside me.”

Some are “shocked and awed” and worried as the Duterte administration has undertaken a major overhaul, especially in the field of law and order. I say things will get worse before they get better. But let’s all be comforted by our faith that God will take care of our country and of our people. In Philippians 4:6: “Do not be anxious about anything, but in every situation, by prayer and petition, with thanksgiving, present your requests to God.” Let’s always pray but we should also do our share and change how we do things. Let’s follow rules, even if others do not. Let’s help the government in any way we can by simply doing good to others. I admit that I have yet to fully mature in my faith. I am still in the middle of a transformation process just as our country is undergoing the same. While the journey might be difficult, I am comforted by the fact that I am “reloaded”.

Samsung’s biggest mistake Adam Minter

BLOOMBERG VIEW

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his week Samsung representatives are standing by at some of the world’s busiest airports, ready to exchange Galaxy Note 7 phones for something new and less combustible. After dozens of fires, two recalls and the complete cancellation of the product, the US government on Saturday warned that anyone knowingly bringing a Galaxy Note 7 and its potentially explosive battery onto a plane could be subject to criminal prosecution.

There’s plenty of reason to blame Samsung for this debacle. It rushed the phone to market. It didn’t subject the batteries to independent testing, as its competitors routinely do. It was slow to acknowledge the scale of the problem. And it failed to properly coordinate its response with regulators.

But perhaps Samsung’s biggest

mistake was one common to many phone makers: In the race to make the slimmest devices possible, it created a product that can no longer be easily repaired or refurbished. For years, this trend has been harmful to consumers and the environment; now it’s clear that it can hurt a manufacturer’s bottom line and reputation, too.

Free fire Continued from A1

W

hat then do we do with the drug problem?

Its size is accurately assessed at 3.8 million users.

Does it pose an existential threat to our country?

I used to think so. But international opinion thinks we can live with the existential threat as we did in the past six years. “Buhay pa nanam kayo,” UN rapporteurs might say.

Indeed, don’t let the numbers scare you. We are 110 million Filipinos; 3.8 million is a drop in the bucket.

I went over the matrix of thousands of local and national government officials, most of them living, a coupla dem dead, but all of them indisputably involved in the drug trade. However, until recently (in the case of the previous administration) no case was made of drug money electing anyone to national

Friday, October 21, 2016 A11

office. And even if drug money dictated election results, our strict antidrug laws did not change. They stay as strict on paper as they are worthless in practice. No raids were conducted with any energy nor was any system pursued with a view to extinguishing the drug trade.

And that is the reason we had no PR problem. We did nothing about the drug problem. We didn’t have hysterical people running around crying, “Shabu, shabu, extrajudicial killing, extrajudicial killing.” So, clearly, the root of our PR problem with the drug problem is Mr. Duterte’s insistence on doing something serious about it.

But is it worth the effort?

Sure, 3.8 million are into drugs.

But who are these people?

Anyone we know?

People who watch this channel can afford to buy a TV. Addicts cannot. The people watching us

The economics of altruism Joselito T. Sescon

EAGLE WATCH

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ichard McElreath and Robert Boyd (2007), both professors of anthropology at the University of California, defined altruism as a behavior which reduces the absolute fitness (welfare) of the actor and increases the absolute fitness (welfare) of the recipient(s).

All over the world, official development assistance, mostly from governments and multilateral institutions, were imposed with accompanying conditions coursed through delegated institutions probably in anticipation to the Samaritan’s problem. Yet, more than government and foreign assistance, there are far many charitable acts given and received among members of communities in societies without preconditions.

Way back in 1975, the famous American biologist Edward O. Wilson called on altruism as the central theoretical problem of sociobiology, the study of the genetic basis of the social behavior of all animals, including humans.

Thirty years later in 2005, Science magazine ranked the evolution of cooperation, by which they mostly meant altruism, as among the “top 25 big questions facing science over the next quarter-century.” Today, the studies of altruism continue excitedly and spanning the socialscience disciplines of psychology, economics, evolutionary science, biology and politics.

In everyday language, an altruist is someone who goes out of his or her way to help others. The biblical famous example of an altruist is the “Good Samaritan” who took pity and helped a man who was stripped of his clothes, beaten and left half dead by robbers on his way from Jerusalem to Jericho. In a little twist of this biblical story, James M. Buchanan, who won the Nobel Prize in Economics in 1986, wrote an essay in 1975, titled “The Samaritan’s Dilemma”. Technically, he wrote and analyzed a social problem deriving from the altruistic desire of a Good

Samaritan to help a person in need, but may end up being exploited.

He cited increasing economic affluence as only one among many explanations for the pervasive phenomenon he called the Samaritan’s dilemma in 20th-century Western society. His hypothesis is that modern man has become incapable of making the choices that are required to prevent his exploitation by predators of his own species, whether the predation is conscious or unconscious.

It has been exactly four decades since Buchanan wrote the essay.

Although it may not be popular nowadays to the new generation of economists, the essay has spawned many studies, both theoretical and empirical, providing analysis and solutions to the Samaritan’s dilemma. Most of the studies dealt with the problem in specific conditions frame in a two-person game theoretic model, such as foreign aid to developing countries and providing assistance to rural farmers. There are two parts in the most commonly proposed solution to the Samaritan’s dilemma that are not far from what Buchanan prescribed. The first part is public precommitment to the application of rules designed

to punish and deter exploitative behavior. Such rules are likely to take the form of conditionality: assistance will be forthcoming only if the beneficiary agrees to conform to certain behavioral guidelines, and assistance will be cut off if that agreement is violated. The second part, as Buchanan mentioned in the original essay, is (Samaritan) delegating the power of decision to an agent, one who is instructed to act in accordance with the strategic norms that are selected in advance.

In other words, developing institutions locked in to strategic policy prescription and delegated with power to make decisions. The delegation to an agent is to prevent the exploitation of the altruist given his or her good intentions.

From current observations, we can see evidence of this two-part solution that are truly implemented in the likes of Conditional CashTransfer Programs, the local version of which is the Pantawid Pamilyang Pilipino Program of the Department of Social Welfare and Development; in the provision of aid to countries and communities; and practiced by international institutions, such as the International Monetary Fund, by setting conditions for countries

The immediate problem with the Galaxy Note 7 is a manufacturing defect that makes its batteries prone to short-circuiting and combustion.

That didn’t need to be a fatal flaw: As recently as 2014, one of the topselling points for Galaxy Note phones was that a user could switch out the battery pack with ease. If the Note 7’s batteries could have been quickly replaced, the toll of the current crisis would have been far smaller.

In 2015, however, Samsung began to transition away from replaceable batteries. It wanted to produce a thinner device, which made accessing interior components more difficult. And it wanted to make its phones waterproof, which required embedding batteries and made DIY repair a fantasy except for the most competent technicians. (One expert recently explained that replacing a Note 7 battery requires “blasting the back of the phone with hot air, prying away the glass and pulling out a layer of components before going after the battery with a tiny plastic crowbar.”)

There’s plenty of reason to blame Samsung for this debacle. It rushed the phone to market. It didn’t subject the batteries to independent testing, as its competitors routinely do. It was slow to acknowledge the scale of the problem. And it failed to properly coordinate its response with regulators.

ing through the trouble. And that’s precisely what the manufacturers want: An overly expensive battery replacement is really just the starting point for upselling a new phone.

The Note 7 recall is a blunt reminder that, in a crisis, those harder-to-repair phones can become a vast liability. Instead of switching out 2.5 million batteries, Samsung is now preparing to “dispose” of 2.5 million phones, at a cost that will easily exceed $1 billion, not to mention long-term reputational damage.

And the cost to the environment may be steeper. By one estimate, the average new phone requires 165 pounds of raw materials, including gold, copper, rare earths and oil.

Even under the best circumstances, recyclers can recover only a small percentage of such ingredients. Samsung hasn’t disclosed what it plans to do with all those recalled phones, but it’s a safe bet that it will amount to an enormous waste.

It doesn’t need to be this way.

Manufacturers are fully capable of

Samsung’s new approach offered one other advantage. Replacing batteries is now a high-margin business for phone makers. Apple charges $79 to swap out a battery on an out-ofwarranty iPhone 6, even though replacement kits, complete with tools, can be found online for less than $30.

Those who already have the tools— such as the fast-growing independent phone-repair industry—can purchase the batteries online for less than $10. Samsung had the same idea: It costs $45 for an authorized service center to swap out a battery for the premium S6. But many owners will simply upgrade instead of go-

are clothed in cotton; not covered with tattoos.

[Now don’t get angry. This is not my view. This is just a thought experiment.]

But, clearly, it is not the scale of addiction that is worrisome but the bad international effect on our previously nonexistent international reputation.

Frankly, after Edsa no one knew us anymore. This is why our former president was awkward on the international stage, like an uninvited guest at an exclusive party rather than at a rave where you can dance by yourself. He was always lurking at the extremities of the photo lineup.

Therefore, since doing something about drugs got us into all this trouble with the civilized world, how about going back to doing nothing about it? That worked.

It is just a thought. Don’t get angry.

in accessing standby funds to bail out ailing economies. All over the world, official development assistance, mostly from governments and multilateral institutions, were imposed with accompanying conditions coursed through delegated institutions probably in anticipation to the Samaritan’s problem. Yet, more than government and foreign assistance, there are far many charitable acts given and received among members of communities in societies without preconditions. For all these charities given and received, is there really no escaping the Samaritan’s dilemma? Is there another game that people play in giving and receiving charity? Are there generalized conditions where the beneficiary does not exploit the altruist giver?

Without doubt, the sciences will continue to study altruistic desires of animals and human beings. In fact, there are findings that in some conditions of giving and receiving help, acts of exploitation on the part of the recipient only happen if the nature of help given is a substitute to the receiver’s desire to help herself.

In other words, it is always admirable to extend help, but it is better to know first what help exactly does the recipient needs to complement her desire and efforts to help herself.

There are conditions that it is easy to know what help is needed, such as helping the dying man in the Parable of the Good Samaritan, but there are complex conditions also, such as providing aid to an ailing economy, or helping farmers and informal settlers, indigenous peoples, homeless families, among other marginalized and poor communities.

Joselito T. Sescon is a lecturer at the Department of Economics, Ateneo de Manila University. He finished his MDE and MA Economics from the University of the Philippines School of Economics.

designing products for easier repairs, and some are doing so. When Apple designed the iPhone 7 to be water resistant, it didn’t rely on adhesives but instead opted for repair-friendly gaskets and seals. FairPhone, a Dutch social enterprise, has sold tens of thousands of premium modular phones that allow customers to snap out batteries with ease. LG has carved out a profitable niche making highend phones that do the same.

These companies are figuring out something that the auto industry realized years ago: There’s a market for durable products that can be repaired and upgraded, either in a driveway or at a service center. Repairable devices can be a hedge against a Note 7-type recall. They also allow companies to make money over the life span of their products by selling replacement parts, while cementing long-term relationships with their customers.

Auto dealerships mastered this art long ago. Samsung, when it finishes cleaning up the mess left behind by the Note 7, should try to do the same.

2nd Front Page BusinessMirror

A12 Friday, October 21, 2016

www.businessmirror.com.ph

DOF’s proposed excise-tax hike on cars may dampen auto industry growth–DTI CHINA’s SWITCH TO LATTES ACTS AS GROWTH PROP

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hoppers in the world’s second-largest economy are becoming increasingly well heeled and sophisticated: instant coffee is giving way to the fresh variety; boutique beers are growing in popularity; and mainstream beauty products are losing their shine in favor of more expensive gloss. At the same time, sales of instant noodles are in decline.

Separate reports from Morgan Stanley and London-based market research company Mintel Group Ltd. point to the potential growth of discretionary spending in China.

It’s an important shift for the economy. As traditional growth drivers, such as heavy industry and exports lose steam, consumption is filling some of the gap. GDP rose 6.7 percent in the third quarter from a year earlier, paced by services, which expanded 7.6 percent in the year to date.

Retail sales jumped 10.7 percent in September from a year earlier.

Consumption contributed 71 percent of GDP growth year-to-date, according to an estimate by Citigroup Inc. In a nation of tea drinkers, fresh coffee houses are growing market share. That’s partly down to status. In smaller cities, holding a white paper cup with a Starbucks’s signature Sirena is seen as a status symbol.

Beer drinkers are also looking for higher-quality beverages than mass-produced cheap lager: the volume of imported beer surged to about 84 million liters in August, from nearly zero a decade ago.

China will likely become the world’s largest beauty market this year, and domestic consumers are contributing 40 percent of global growth for cosmetics and personal-care products, according to Morgan Stanley.

Chinese beauty shoppers are trading up to premium brands, and mainstream names will keep “losing share to brands at the higherend or brands providing a new experience through both marketing and product offering.”

An index provided by a leading e-commerce company JD.com shows the volumes of cosmetics sold online have been growing rapidly. Bloomberg News

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he Department of Trade and Industry (DTI) is now soliciting comments from auto industry players on the Department of Finance’s (DOF) proposed excise-tax hike on automobiles, hinting that the proposal may dampen the robust growth that the auto industry is enjoying and may disrupt the rollout of its flagship manufacturing stimulus program.

The DTI’s move came on the heels of a DOF’s draft proposal to hike excise taxes on luxury goods, including automobiles, to offset other planned revenue-offsetting measures that form part of the DOF’s tax-reform package.

DTI-Board of Investments Director Corazon Halili-Dichosa commented that there’s no unified position yet on the part of the DTI, but the department is currently consulting stakeholders in the auto industry, especially in light of the takeoff of the Comprehensive Automotive Resurgence Strategy (CARS) Program.

“We have to see the effect of this program on demand, especially with the CARS Program. Will this offset what we’re trying to achieve?

The study hasn’t been concluded,” Dichosa said.

While there is no estimated impact yet on the proposed tax hike on auto industry, Dichosa conceded there will be a softening of demand at the outset.

“It may curtail demand for auto on the outset, but we want to see the view of the finance [department],” she added. The CARS Program is the DTI’s manufacturing stimulus program created to attract investments in the auto industry, and make the Philippines an automotive hub in the Asean region.

Currently, vehicles locally assembled in the country face a $1,800 gap in production cost versus neighboring manufacturing countries.

The program aims to boost the local auto industry’s competitiveness by bridging this gap, essentially providing a $1,000-per-unit fiscal support through the CARS. It entails a mandatory local production of body shell and large plastic parts as part of its localization requirement, and a 200,000-unit production requirement over the course of the program.

However, this is seen to hit a major snag as the DOF, now on high gear to pass a comprehensive tax-reform package, is looking at luxury goods as a possible offsetting measure to recoup revenues to be lost in lowering personal income tax.

Specifically, automobiles are seen to be affected by this luxury good excise-tax hike, jacking up the cost of automobiles, including CARS participating models.

The two participant auto players—Toyota Motors Philippines and Mitsubishi Motors Philippines—are under pressure in the CARS Program to sell at least 200,000 units to avail themselves of the incentives of the program, a goal that is now made even more difficult because of the DOF’s proposal.

According to an earlier BusinessMirror report, House Ways and Means Committee Chairman Dakila Carlo E. Cua said the excise tax on automobiles priced below P600,000,

currently at 2 percent, will be increased to 5 percent.

Under the DOF bill, there shall be a levied, assessed and collected an ad valorem tax on automobiles based on the manufacturer’s or importer’s selling price, net of excise and value-added tax.

Under the measure, if the net manufacturer’s price/importer’s selling price is P 600,000, the excise tax will be 5 percent. If the net manufacturer’s price/importer’s selling price is P 600,000 to P1.1 million, the excise will be 20 percent of net manufacturing/importation price.

If the net manufacturer’s price/ importer’s selling price is P 1.1 million to P2.1 million, the excise will be 40 percent of net manufacturing/ importation price.

If the net manufacturer’s price/ importer’s selling price is P 2.1 million, the excise will be 60 percent of net manufacturing/importation price.

Toyota’s enrolled model to the CARS Program, the Vios, has a suggested retail price of P800,000. Mitsubishi’s own bids, the entry-level versions of Mirage and Mirage G4, are priced starting at P550,000 and P570,000, respectively.

Industry stakeholders and the DTI are expected to draft their position paper in response to the DOF’s proposal in the coming weeks.

Catherine N. Pillas

It may curtail demand for auto on the outset, but we want to see the view of the finance [department].”

—Halili-Dichosa

Smart, Globe tie-up with DICT to help govt solve traffic mess

By Lorenz S. Marasigan

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@lorenzmarasigan

ECAUSE the chronic traffic congestion in Metro Manila will take years to resolve—as these require infrastructure-related solutions—the information and communications technology (ICT) industry sees it fit for President Duterte to impose Band-Aid solutions through the use of modern technology.

According to a document obtained by the BusinessMirror, the industry— led by the Department of Information and Communications Technology and telco players Smart Communications Inc. and Globe Telecom Inc.—is keen on providing necessary tech-based solutions to help alleviate the effects of traffic congestion on both enterprises and employees.

Representatives from both the private and the public sectors agreed to adopt “a unified stance, wherein ICT-based solutions are seen as a key in resolving the problem of traffic congestion in the country,” the document from the Summit on Coordination Meeting on Implementing ICT-based Solutions to Mitigate Traffic Congestion Nationwide read.

One of the key initiatives that the par tnership w i l l under ta ke is the move to use a tech-based traffic-management scheme, which will provide synchronized traffic-signal prioritization schemes and real-time alternate routes information.

Likewise, the industry committed to install “broadband connectivity in major highways, roads and thoroughfares to allow commuters to access e-mail and work while on road.”

This, according to the document, will promote the culture of telecommuting, which, in simpler terms, is the method by which an employee does a task away from the office.

With this, the private sector committed to “seriously consider implementing

telecommuting as an alternative-work arrangement for their employees, insofar as it may be applicable, considering the nature of their duties and functions, area of their assignment and the existing infrastructure in place, without unduly comprising work productivity.”

It also committed to assist the government in developing and providing identified tech-based solutions and infrastructure necessary for the importation of telecommuting.

The public sector, on the other hand, committed to create tax-based incentives for both public and private companies that participate in the off-site work arrangement, and to the “expansion of tax-based incentives in special economic zones, such as the Philippine Economic Zone Authority, to cover telecommuting.”

But to do this, the government must eliminate the bureaucratic red tape that telcos have been citing as the perpetrator behind their slow capacity building.

Hence, the government committed to help “remove barriers to facilitate and accelerate the expansion and improvement of the broadband infrastructure toward increasing penetration, last-mile connectivity, and lower costs for high-speed remote and mobile access through the Internet for telecommuting.

These include the streamlining of the required permits and licenses necessary for the rollout and continued operations of broadband facilities and infrastructure; the strict implementation of applicable laws, rules, regulations and orders on fast-tracking services; and the regulation and implementation of reasonable rental rates for where broadband facilities are constructed and located.

It also committed to allow telcos “reasonable but unhampered access and usage of public thoroughfares in order to implement their continuing expansion and improvements with dispatch and without undue delays.”