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A faster network. n Find out m more inside. week of MARCH 31-april 6, 2016 | Vol. 2 Edition 12 | WEEKLY $2.00 | © 2016 Latin Media House, LLC |

Recovery Act Awaits Supreme Court Decision

Transfer-Pricing Tax Declared Unconstitutional

Kasich and Cruz Court P.R. Rubio Delegates

Bishop Unveils Federal Control Measure

Split Verdict Expected in June page 7

Wal-Mart Prevails in Court Case page 19

No Pledge Prior to First RNC Ballot page 27

Issacharoff Denounces Unilateral Action page 29



Commonwealth to Present Moratorium Legislation Revised Debt-Restructuring Offer to Creditors Will Not be Public Yet; Negotiations Continue

GDB in Peril

Weighing Options in Face of Insolvency In the epic drama building over Puerto Rico’s debt crisis, many government entities play huge parts, yet few more critical than the Government Development Bank (GDB). The island’s fiscal agent would pay some $9 million in interest payments on April 1, but come the following month, it faces a potential meltdown of apocalyptic proportions when roughly $422 million is due on May 2. The bank owes about $4.2 billion to its creditors.

The combination of fast dwindling cash reserves and no timely debt-relief action could land a mortal blow to the GDB’s operations, with ripple effects on the Puerto Rico government and economy. But what exactly does it mean to have the bank even in a partial shutdown? What is the commonwealth government exactly willing to do about this? La Fortaleza says it is waiting for Congress to deliver favorable legislation to deal

with the island’s fiscal crisis. Yet some observers have likened the latter to Samuel Beckett’s “Waiting for Godot” and believe the bank would be pressed to siphon through its available cash to meet at least part of what it owes in May, barring some sort of last-minute funding maneuver that could prevent it from falling off the cliff and avoid creditor lawsuits. BY LUIS J. VALENTÍN & PHILIPE SCHOENE ROURA pages 14-17

While advisers for the Puerto Rico government and creditors talk over restructuring a large chunk of the island’s $70 billion debt, the Alejandro García Padilla administration is about to present legislation that would deal with the more than $2 billion in debt payments hitting this summer, according to Caribbean Business sources. The measure would declare a moratorium on Puerto Rico’s debt service, including the $422 million owed by the Government Development Bank (GDB) on May 2, as well as the roughly $1.5 billion due across the board on July 1. As of presstime Tuesday, La Fortaleza intended to present the moratorium legislation

as soon as this week, two government sources said. On the creditors’ front, advisers for the commonwealth and its creditors continue to negotiate terms for a voluntary debtrestructuring plan that can secure substantial support from all sides, according to sources. “The goal is not to continue negotiating publicly and not to keep releasing proposals. The goal is to use conversations with creditors to come up with something that will have substantial creditor support,” one source with knowledge of the negotiations told this newspaper. BY LUIS J. VALENTÍN continues on page 6


Thursday, MARCH 31, 2016 |

THIS WEEK Editorial

By Philipe Schoene Roura EXECUTIVE EDITOR

No time for ‘Hail Mary Pass’ in Debt Game In the game of American football, there is a desperation play that involves heaving the ball more than 40 yards in the air, hoping a receiver from the offensive team will haul the ball in as time expires. It is called the “Hail Mary pass,” for it is a prayer play that borders on the miraculous—a last resort when there is little time on the clock and the offensive team must travel a long distance to obtain a score to either stay in the game or snatch an improbable victory from what was otherwise certain defeat. Many of those same conditions exist today in Puerto Rico’s gridiron showdown with creditors. The clock is winding down, it is fourth and goal, and the commonwealth’s restructuring brigades have a massive stretch of yardage to cover. In football, Francis “Fran” Tarkenton, the legendary quarterback for the Minnesota Vikings during the 1970s, was known for scrambling before launching his desperation passes. In Puerto Rico’s restructuring game, the quarterback is Jim Millstein, a former chief restructuring officer for the U.S. Treasury, who is scrambling to meet the demands of some 18 creditor groups. He has been fleet of foot—it has yet to be seen if they have tired and are coming to grips with the fact that they will be grinding it out as the clock expires. There will be no Hail Mary pass— not in the U.S. Supreme Court where the recent hearing of oral arguments over the enforceability of the Debt Enforcement & Recovery Act looms large in the outcome of this contest. A decision favoring the Recovery Act would grant the commonwealth a mechanism to restructure its public corporations’ debt. No one should wish the untimely passing of friend or foe—but deep down, the plaintiffs must have felt the planets aligning when Justice Antonin Scalia moved to a higher judicial plane. Scalia was known

for carrying the torch of originalism, bound to interpreting the U.S. Constitution according to the original meaning penned by the document’s drafters; he did not see the Magna Carta as a living, breathing document. Scalia is no doubt in a better place, just as the chances of overturning the appellate court’s ruling have improved as the balance of justices who seem likely to side with the defendants have shifted with his death. There are several possible scenarios in the high court—the Supremes could order the Recovery Act’s validation by the appellate court. The nine (now seven, actually, because of Scalia’s death and Judge Samuel Alito recusing himself ) could send it back to the appellate court and ask for a reconsideration. The one thing that seems certain is that the Supremes will not act in time to help the severely decapitalized Government Development Bank to meet its deb-service payment on May 2. Then there’s Congress, which has a huge audience holding its collective breath in anticipation of draft legislation to be formally submitted this week. As this newspaper was going to press, Rep. Rob Bishop (RUtah) was to have filed a draft of a measure—leaked to the New York Times as a trial balloon—that is certain to draw staunch opposition from Democrats in the Senate who have been aggressively lobbied to defeat the bill. Their opposition traces to very onerous covenants in the text that promise to be voted down. There will be no Hail Mary pass before May 2 and few people seem hopeful that more time will be put on the clock so that creditors and the commonwealth can grind it out. No matter what, this is unavoidable: consensual restructuring and moratoriums will come into play until the mess can be figured out.

No matter what, this is unavoidable: consensual restructuring and moratoriums will come into play until the mess can be figured out.

Contents picture of the week page 24

this week


Editorial Letter from the Editors/Retrovisor

2 4

puerto rico Top Story Lead Stories Banking/Finance Healthcare Cover Story

6 6 7-8 10-11 12-13 14-17

economy Sin Comillas Smart Money Innovation Poll

19 20-21 22 23 24

politics Puerto Rico U.S.

25 25-26 27

hemisphere Latin American Affairs Federal Affairs

28 28 29-30



Guide Community Affairs Advertising

44 45 46

Special features


Women to Watch Big Business Profiles: Security Car Review

31-34 35-40 42-43 Volume 2, No. 12 • Thursday, March 31, 2016 • PO Box 12130, San Juan PR 00914-0130 CARIBBEAN BUSINESS ® (USPS 313150) is published weekly, except the first two weeks of January, by Latin Media House, LLC, 1700 Ave. Fernández Juncos, San Juan, P.R. 00909-2938. Subscription rates: $45 a year + $4.73 state tax +.45 municipality tax = $50.18; $58 for two years + $6.09 state tax +.87 municipality tax = $64.96; $108 a year for foreign + applicable tax and shipping & handling. Customer Service/Subscription telephone: (787)728-8280, toll free 1-844-723-2351. Fax: (787)728-0195. Circulation Department telephone: (787)728-7670. General telephone: (787)728-3000. Fax: (787)2681626. Periodicals postage paid at San Juan PR 00936-9998. Postmaster: Send address changes to CARIBBEAN BUSINESS, PO Box 12130, San Juan PR 00914-0130, (ISSN 0194-8326). Entire contents: Copyright ©2016 by Latin Media House, LLC

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Letter from the Editors

A Turbocharged Caribbean Business

The newspaper you are holding in your hands is a revamped version of Caribbean Business—call it a turbocharged two-liter version. Starting with this edition, you will find the newspaper divided by sections, all color coded in the table of contents, with matching kickers topping layouts throughout the paper. The newspaper kicks off with “This Week,” which features Editorials, the Table of Contents and Retrovisor (a look back at the biggest news taking place over the past week). Look to the blue-coded “Puerto Rico” section for the most important stories related to the island—these are lead stories, the most important beat stories and the FrontPage cover story. Under “Economy,” you will find all things related to the economy in the form of either briefs, huge stories, a spread featuring our stock comment, the past week’s Winners & Losers, the poll from Gaither International, a spread with excerpts from the Sin Comillas website reported by economist Luisa García Pelatti and a section on Innovation. Politics is covered in full, with its own section that is broken into Puerto Rico and U.S. stories—including federal affairs—while the Western Hemisphere is covered in stories on Caribbean and Latin American affairs. Because all work and no play make Jack and Jill dull children, you will always find a bit of rest and relaxation mixed with reporting on community affairs under “Weekend.” Look for new sections to be added over the next several weeks. Our aim at Caribbean Business is to better serve our readers. We hope you enjoy our new turbocharged newspaper, and we welcome your comments as we move forward together. The Editors

Question of the Week Check out our “Question of the Week” at

Will the Government Development Bank be put into Receivership?

Thursday, MARCH 31, 2016

Retrovisor The Week in Hindsight By Rosario Fajardo


Parador Owners in Puerto Rico Optimistic about Holy Weekend

Tomás Ramírez, president of the Puerto Rico Paradores Association, told Caribbean Business that occupation for the island’s paradores was expected to be around 96% during Holy Week, and reach 100% for that weekend. Ramírez stressed that the economic crisis has resulted in a higher occupation rate this year when compared with other years, because many people who usually vacationed abroad have decided to stay on the island and look for local alternatives. However, he stressed this does not mean paradores have not been free from the effects of the commonwealth’s economic crisis—it has increased costs for parador owners, who can’t pass it through to customers, as it would significantly affect demand.

U.S. Indexes Mostly Fall; Travel Companies Sink After Attacks

U.S. stock indexes closed mostly lower last week as airlines, cruise companies and travel booking sites fell following the March 22 attacks in Belgium. Royal Caribbean dropped 3% on March 22 and Priceline declined 2%. Energy and materials companies also moved lower. Healthcare and technology stocks gained ground. The Dow Jones Industrial Average gave up 41 points, or 0.2%, to 17,582. The Standard & Poor’s 500 Index edged down a point to 2,049. The Nasdaq composite edged up 12 points, or 0.3%, to 4,821. Bond prices fell. The yield on the 10-year Treasury note rose to 1.94%.

Trump and Clinton Pad Leads in Race for Party Nominations

A clash of world views is intensifying as the presidential contenders in both parties fight to convince voters they can best protect the nation from a renewed threat of Islamic extremism. As the world grappled with a new wave of attacks in Europe, Donald Trump and Hillary Clinton traded wins with their chief rivals on March 22 in primary contests across three Western states. Trump and Clinton scored victories in the night’s biggest prize of Arizona, while Democratic challenger Bernie Sanders won caucuses in Utah and Idaho. Republican Ted Cruz claimed the GOP caucuses in Utah. Both Clinton and Trump maintained a comfortable lead in the race for delegates, who decide the presidential nominations.


Thursday, MARCH 31, 2016 |

PUERTO RICO Moratorium /

Continued from cover

Caribbean Business previously reported that the commonwealth government sought to announce a revised offer to creditors at some point during the past two weeks, but plans were suspended amid ongoing negotiations between the sides. One government source added that creditor groups asked the government not to publicly release the proposal until all sides are closer on their demands. Moratorium legislation As of press time Tuesday, sources said details on the bombshell legislation being worked on by La Fortaleza were still being fine-tuned,

but in general, it would broadly cover the island’s debt and would most likely include a mechanism to deal with the financially battered GDB (see Cover Story), which is facing a large debt payment and does not have enough cash to pay in full. To this effect, the administration is considering “an FDIC-like [Federal Deposit Insurance Corp.] approach,” with the government bank seeking “to protect depositors and access to its asset value, while figuring out some restructuring of the third-party creditor debt,” said one government source with knowledge of the matter. “Traditionally, the FDIC does a good bank/bad bankact, moves assets and deposits into

TOP STORY a good bank, then leaves behind the third-party debt.” Sources added it remains to be seen if there would be enough support among Puerto Rico lawmakers to make way for La Fortaleza’s moratorium measure and establish the mechanism needed to provide relief to the bank. When asked by Caribbean Business about the GDB, the governor warned there is insufficient cash to meet the May payment, which “could bring an avalanche of lawsuits and before reaching that point, we would have had to have taken preventive measures to protect the Puerto Rico government.” As for when exactly the government would move forward on these preventive measures, García Padilla said that he could not publicly disclose his strategy. Yet, he noted that some of the measures will be taken sooner than others and will “generate all types of reactions.” The commonwealth’s move to present debt-moratorium legislation in the face of the summer debt cliff would come amid strong debate in Congress over draft legislation presented by Republicans in the House to tackle the island’s fiscal crisis. The measure calls for a strong federal fiscal-oversight board, while providing access to a debt-restructuring mechanism, subject to the board’s approval. (See Federal Affairs story on page 29.)

And although the administration remains optimistic that changes could still be introduced to the bill in order to achieve legislation that is favorable to Puerto Rico, time is not on their side and all possible measures continue to be evaluated. “To avoid a humanitarian crisis, we are already late. Congress is late,” García Padilla said Monday. “It would be great if Congress provides some tools to address Puerto Rico’s issues, but if they don’t, the creditors and the commonwealth are going to have to solve it by themselves…. There is not going to be some magic endpoint,” a government source told this newspaper. While acknowledging for months the possibility of enacting such emergency measures as declaring a moratorium on debt service, La Fortaleza’s efforts had focused on achieving congressional action that could help the commonwealth deal with its fiscal crisis and looming debt payments. Not public this time With the commonwealth administration on the brink of seeking local debt-moratorium legislation, restructuring advisers continue to meet with representatives of all creditor groups, with “very active” negotiations among the sides, at least two sources told Caribbean Business. The government’s last proposal, made public earlier this year,

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sought to exchange about $49 billion of debt for two new types of securities, while calling for initial haircuts hovering around 45%, depending on the credit. Counterproposals have been delivered by some of the affected creditor groups, including those holding general-obligation and Sales Tax Financing Corp. bonds. Following the release of the government’s last offer, advisers for all sides have been going back and forth over terms in an effort to reach some sort of consensus among the competing interests of all involved. While the last two government proposals and a few of the counteroffers that followed were all made public, it would not be the case from now on—not until broad support is achieved among all sides, sources said. As for the latest developments on Capitol Hill and how they could affect ongoing creditor talks, one government source said creditors had hoped Congress would “change the playing field in some way” that would give them more leverage in negotiations. “I think the recognition has dawned on creditors that there is no magic bullet,” said one government source, adding that active dialogue is taking place. Nevertheless, a long road still needs to be covered before reaching much-needed consensus between the commonwealth and all the creditor groups.


| Thursday, MARCH 31, 2016



Supreme Court has three possible options in deciding case

U.S. Supreme Court Decision on P.R. Recovery Act Hard to Predict BY EVA LLORÉNS VÉLEZ

While experts say the U.S. Supreme Court’s ultimate decision on the constitutionality of the Debt Enforcement & Recovery Act is hard to determine, the top court has three possible options, including remanding it to the U.S. First Circuit Court of Appeals, which with all due probability would declare it unconstitutional again. Based on the questions asked by the justices at the March 22 hearing, it appears that the commonwealth’s lawyer, Christopher Landau, convinced at least three justices to support the

constitutionality of the controversial law, which creates a legal framework for restructuring the Puerto Rico government’s debt for certain public corporations. Two lower courts declared the local bankruptcy law unconstitutional, arguing that it was preempted by the U.S. Bankruptcy Code. But the First Circuit did not answer other issues, namely whether the local law violates the constitutional clause that bans laws that go against contracts. During the March 22 hearing, Landau argued that when Congress chose to shut the “gateway� to municipal government bankruptcy filings in 1984, it allowed

the commonwealth government to deal with its own fiscal crisis as it sees fit. Former Bankruptcy Court chief judge Gerardo A. Carlo-Altieri said a Supreme Court case comprising seven judges avoids a draw, which could benefit the commonwealth in its arguments. Justice Antonin Scalia passed away recently and Justice Samuel Alito recused himself from the case. Carlo-Altieri said the court could enter into a profound constitutional opinion, probably drafted by the chief judge (if there is a majority), affirming the Circuit Court’s decision on preemption and concluding that Congress has the last

word on territories; another option could be another judge writing a simple textual interpretation that the bankruptcy code does not cover Puerto Rico. “That is, that no part of Chapter 9 [of the U.S. Bankruptcy Code] applies to Puerto Rico, not even 903(1)—therefore no preemption—so the Circuit Court [decision] should be reversed and the island has the power to legislate in

this field. Of course, this is all subject to possible remand and that the local restructuring law in some way is held not to violate the contract clause,� he said. Section 903(1) of the U.S. Bankruptcy Code provides that “a State law prescribing a manner of composition of indebtedness of [a] municipality may not bind any Continues on page 8

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Thursday, MARCH 31, 2016 |

LEAD STORY Continued from page 7

creditor that does not consent to such composition.� If the contract impairment issue is litigated on remand, it could run again into a serious ripeness challenge, since the local bankruptcy law has not been used yet by any commonwealth entity, Carlo-Altieri indicated. “A remand also creates questions of timing for the local government and even Congress. Questions have been raised about the effect a prompt decision in favor of the commonwealth could have on the legislative bills being considered, whether Congress would find it necessary to continue to legislate, create a control board mechanism or provide a different sort of restructuring tool, including Chapter 9 or a special type of territorial Chapter 9 for the island and Washington, D.C.,� he said. John Mudd, a lawyer and political analyst, believes the top court

will declare the law unconstitutional because of Section 903 or remand it back to the lower courts to decide on the contract clause and on whether the law is an illegal taking without just compensation. He said that either way, the courts will decide that it is unconstitutional because it violates the contract clause. “It is irrelevant,� Mudd said. Popular Democratic Party Rep. Manuel Natal, who is also a lawyer, advocated for a debt moratorium regardless of what is happening in the Supreme Court, noting that any decision will not take place until June. By that time, the government would have already defaulted on its debt, he indicated. The arguments in Puerto Rico v. Franklin California Tax Free Trust and a companion case on March 22 centered on the reasons why Congress decided to take Puerto Rico out of the bankruptcy law in 1984, since there is no explanation or legislative history on the matter.

At issue is whether Congress may have also forbade the commonwealth from approving its own bankruptcy law when it closed the door on the island’s access to federal bankruptcy protection.

Matthew M. McGill, the Washington, D.C., lawyer representing the bond-holding creditors, said the 1984 incident was really only another example of Congress “micromanaging Puerto Rico’s debt.�

“That is, that no part of Chapter 9 [of the U.S. Bankruptcy Code] applies to Puerto Rico, not even 903(1)—therefore no preemption— so the Circuit Court [decision] should be reversed and the island has the power to legislate in this field. Of course, this is all subject to possible remand and that the local restructuring law in some way is held not to violate the contract clause.� —Former Bankruptcy Judge Gerardo A. Carlo-Altieri on the options facing the U.S. Supreme Court

Justice Elena Kagan confessed that she had come to the hearing inclined to vote against Puerto Rico, but her opinion was changed by Landau’s arguments. She appeared to be inclined to believe that none of the bankruptcy code clauses apply to Puerto Rico, and as a result, the commonwealth government is free to draft its own law. Justice Sonia Sotomayor noted that Puerto Rico was being made to suffer limitations to its authority in deciding its own financial affairs, while Justice Stephen G. Breyer provided different legislative options that indicated he may be inclined in favor of Puerto Rico. Justice Ruth Bader Ginsburg wondered aloud why Puerto Rico was in a legal limbo on the issue of bankruptcy protection, “Why would Congress put Puerto Rico in this never-never land? ...What explains Congress wanting to put Puerto Rico in this anomalous position of not being able to restructure its debt?� she asked.


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Thursday, MARCH 31, 2016 |


Company’s accumulated earnings are expected to be reduced by $12 million to $14 million

Evertec to Restate Its Quarterly Financial Statements From 2013 to 2015

Will Include Adjustments in Its 10-K Annual Report For 2015 When Completed BY JOSÉ L. CARMONA

San Juan-based electronic transaction processing firm Evertec Inc. announced last week it will restate its quarterly financial statements for 2013, 2014 and 2015 as a result of an erroneous accounting treatment. In an 8-K filing, Evertec said it identified an accounting position that required reevaluation with respect to a net operating loss pertaining to certain 2010 expenditures.

Financial Accounting Standards Board’s Accounting Standards Codification Topic 740 (ASC 740), and that the deferred tax asset was accordingly recorded in error. Management and the Audit Committee further concluded that the deferred tax asset in question should be derecognized and a liability for resulting potential tax liabilities should be recorded, following generally accepted accounting principles based on ASC 740. As a result of this conclusion, management, the

on its previously reported Dec. 31, 2014 financial statements are: • The company expects it will no longer have a deferred tax asset for a net operating loss as it estimates its net operating loss will be zero for accounting purposes. • An additional liability of about $3 million to $5 million is expected to be

established for potential tax liabilities. • Accumulated earnings are expected to be reduced by some $12 million to $14 million, the substantial majority of which pertains to a reduction in accumulated earnings in 2010. • The windfall tax benefit available for future use will be reduced from the previously reported amount of about $11 million to between $4 million and $6 million. Evertec estimates it will have no deferred tax asset for a net operating loss or windfall tax benefits available at Dec. 31, 2015. The company said it will be including the restatements in its Annual Report on Form 10-K for the year ended Dec. 31, 2015, and is diligently working to complete and file as soon as practicable.

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Volume 2, No. 12 Thursday, March 31, 2016

Publisher Miguel A. Ferrer

Editor in Chief Heiko Faass Executive Editor Philipe Schoene Roura

EDITORIAL Editor Rosario Fajardo Online Editor Eduardo San Miguel Tió Politics Editor Ismael Torres Regional Editor Juan A. Hernández Senior Reporters José L. Carmona, Dennis Costa, Eva Lloréns Online Reporter Luis J. Valentín Reporter Mario Belaval Special Projects Editor Francis E. López Researcher Blane McLane Sales Department Miguel Cartagena 787-728-3000, ext. 4480 Fax: 787-268-5058 Email: Account Managers Cheryl Lamboglia, Lizzette López Account Executives Jackeline Matos, Michelle Ortiz, Elena Díaz Production Department Manager Blanca Santiago Prepress Manager Carlos Laboy Art Director Manuel López Amador Prepress Supervisor Miguel Avilés Typesetting Supervisor María Donis Pagination Supervisor Annie Maldonado Scanning Supervisor Iván Ramírez

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This net operating loss resulted in a deferred tax asset of about $14 million as of Dec. 31, 2010 and the company reevaluated such asset and its effect on subsequent periods. On March 17, after receiving additional advice, management and the Audit Committee of the company’s board concluded that the referenced deferred tax asset was based on a tax position that did not meet the required threshold to be recorded on the balance sheet in accordance with the

Audit Committee and the board determined that the company’s previously issued consolidated financial statements—as of Dec. 31, 2014 and 2013 and each of the three years in the period ended Dec. 31, 2014, and as of the end of and for each quarterly period in 2014 and 2015—should no longer be relied upon. The company plans to restate its financial statements for the Non-Reliance Periods. Evertec estimates the primary restatement impacts

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| Thursday, MARCH 31, 2016


New housing inventory plunged from 13,419 units in 2006 to 2,345 in 2015

New Housing Construction Continues to Drop, but Some Projects Fairing Well Social Interest, Luxury Homes Performing Better Than Expected BY JOSÉ L. CARMONA

Contrary to general perception, a recent survey on new housing in Puerto Rico revealed that certain housing developments on the island are fairing well, especially social-interest (i.e. low-income) and higher-priced (i.e. luxury) homes. According to the latest Construction & Sales Activity Report (CSAR) by Estudios Técnicos Inc., housing sales continue at depressed levels compared with the historical market behavior of more than 10,000 units sold annually. From a peak of 13,419 new housing units sold in 2006, a mere 2,345 units were sold in 2015, a whopping 82.5% drop. Of last year’s total, 69% of the housing units reflected prices below $200,000, and 28.5% were social-interest housing priced below $125,000.

“We identified 35 new housing projects that reflected a good sales performance in all price levels. About 45% of them were priced below $149,999. In the affordable housing segment, FHA [Federal Housing Administration] financing programs, rural and state-sponsored housing subsidy programs are fundamental in promoting these segments,” the latest CSAR survey revealed. The successful new housing projects are of excellent quality and sold at very competitive prices, the CSAR survey indicated, adding that higher-priced (luxury) housing developments are being impacted favorably by incentives provided by Act 22 of 2012. Positive impact of new housing developments While the government has been criticized for providing financial

assistance for social-interest housing at a time of fiscal crisis, it has been proved over time that these programs, in addition to fulfilling a social role, also serve as a highly effective promotional mechanism for economic development, the CSAR survey said. For instance, in a $110,000 social-interest housing transaction, the central government’s average contribution is a little over $3,000, or less than 3%. However, the government contribution promotes an economic activity valued at more than $100,000, which directly impacts the construction industry sector, which has lost more than 40,000 jobs since 2006, the CSAR survey noted. More than 75% of the new housing inventory is priced below $200,000. However, the outlook for the housing construction sector is not

“We identified 35 new housing projects that reflected a good sales performance in all price levels. About 45% of them were priced below $149,999. —Construction & Sales Activity Report (CSAR) by Estudios Técnicos Inc.

very bright, the CSAR study said, given the island’s economic and demographic context and the resulting challenges facing the sector. The continued outmigration of residents—nearly 300,000 people have left Puerto Rico since 2006—the devaluation of the island’s real estate, the inequity between a home’s value and its mortgage debt and the high delinquency and foreclosure rates, impose

unprecedented challenges to the sector, the survey pointed out. Nevertheless, opportunities remain, the survey said. For example, population data continues to reflect a dire need for housing in Puerto Rico for low- and medium-income residents, as well as seniors and young professionals. These demographic changes are modifying consumers’ preference toward housing of various types.



Thursday, MARCH 31, 2016 |


Puerto Rico advances slowly despite federal government incentives to providers to move to digital records.

Compliance With EHRs Still an Issue instead of a client-server to make the process more expeditious for compliance and meaningful use. “Right now, 75% of all lab tests from our patients are received electronically. We have some 30,000 patients requiring laboratory tests every month,” said Montalvo, while specifying that MSO Puerto Rico serves more than 200,000 patients islandwide.


Compliance with the requirements of Stage 2 of the Electronic Health Records (EHR) provisions of the American Recovery & Reinvestment Act in Puerto Rico remains minimal at best and advancing slowly, despite the incentives provided by the federal government to eligible Medicaid providers for moving from paper to digital records, according to Dr. Raúl Montalvo, president of

MSO of Puerto Rico, an affiliate of MMM LLC. Still, compliance with the “meaningful use” requirement in Puerto Rico is similar to that of the U.S. mainland. Because compliance has been lower than what was originally expected, the Centers for Medicare & Medicaid Services has extended the Stage 2 deadline through 2016, giving eligible providers the opportunity to present evidence of the adoption and meaningful use of electronic health records (EHRs).

Compliance of Stage 3 requirments have also been pushed until at least the beginning of fiscal 2017. “We are in the process of transitioning to 100% electronic transmission of laboratory tests from all providers in our network through our web portal InnovaMD,” Montalvo said. According to the MSO executive, while the corporation provides incentives to its providers to make the change to digital, it has opted for a web-based alternative

“Technology allows us to improve patient care by avoiding duplicity in tests and treatment and over usage of services. —Dr. Raúl Montalvo, president

of MSO of Puerto Rico

Once the lab results are available, laboratory personnel file them through InnovaMD, using their specific accounts, and the

results are available for verification by doctors, therapists and/or hospitals in the network. According to Montalvo, around 30% of patients do not pick up their lab results after getting the tests done, which makes the process of evaluating patients more difficult. “Technology allows us to improve patient care by avoiding duplicity in tests and treatment and over usage of services. As a result, patient care is more efficient and effective,” said Montalvo, who estimated that EHRs could save up to $4.7 million in unnecessary tests and/or treatments. Montalvo assured that 99% of MSO’s primary care physicians actively use InnovaMD to file transactions related to coordinated healthcare services offered to their patients. More than 6,370 MMM and PMC Medicare Choice service providers are connected to the InnovaMD portal. PMC belongs to the MMM family. Patients themselves also can access their own medical records through the Health-On-Touch (HOT) portal. Montalvo said 35% of MMM/PMC subscribers are registered in HOT and can access their medical records from their cell phones via a free app available at the app store. Most of the registered patients check their clinical profiles regularly, he said.


| Thursday, MARCH 31, 2016


Pharma companies in Puerto Rico spend at least $5 billion a year on R&D

Increase on Specialty-Drug Prices due to Higher R&D Costs BY MARISOL ROBLES VELÁZQUEZ

With the leading biopharmaceutical companies in the Caribbean heavily embedded in the world of innovation and discovery, an increase on specialty drug prices in Puerto Rico over the past decade now entails a direct correlation with regard to higher spending on research & development (R&D). “Depending on the company, you may have those companies like Allergan invest probably 13% to 14% of our sales (in branded pharmaceuticals) in research & development, [representing] around $5 billion to $6 billion a year,” commented José

E. Viera-Colón, region director of Allergan Caribbean. In total, Pharmaceutical Research and Manufacturers of America (PhRMA) member biopharmaceutical companies invested about $51.2 billion in R&D in 2014. Allergan Caribbean is a member of the PhRMA along with Pfizer, Bristol-Meyers Squibb and Abbott-Abbvie, which also have pharmaceutical plants in Puerto Rico. According to Viera-Colón, the rise in prices of branded medications felt within the Puerto Rican consumers’ pockets cannot solely be taken into consideration without also having in mind the value products have on

improving patients’ lives and benefitting the island’s healthcare system and its economy. “There’s a lot of marketing expense behind it, there’s a lot of sampling expense behind it… consider the rebates and the discounts we provide in order to gain access [for branded pharmaceuticals],” said Viera-Colón during the recent Puerto Rico Health & Insurance Conference held in San Juan. He spoke about the close interconnectivity between Pharmacy Benefit Managers (PBM), medical associations, doctors and patients to provide medications and therapies for curing or treating diseases such as cancer, rheumatoid arthritis

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and multiple sclerosis. Pharmacist Marileny Lugo, who is also operations senior vice president of MC-21 Operation, said the double-digit growth seen in the pharmaceutical market in recent years is significantly driven by the expenditure of specialty drugs, not by the traditional or generic drugs produced. “New brand spending increased by $19.8 billion in the past 12 months… Over 75% of new brand spending is on specialty medicines,” Lugo said. Another pharmacist, Nayda M. Rivera Cruz, who is a government & industry partnership director at Abarca Health LLC, indicated that less than 1% of patients with healthcare plans use specialty drugs, but these patients represent more than 32% of drug spending for these plans. “If there’s any patient who doesn’t have formulary coverage or cannot afford the medicine, the branded pharmaceutical companies provide

a lot of ways, such as co-pay cards, rebate cards and patient-assistance programs, for us to absorb the cost for that patient to have access to their medicine,” Viera-Colón said. He also insisted on the vital importance of patient compliance when told to take their prescribed medications, thus having the feasible option to use a co-pay card to ease the weight of hefty specialty drug prices. However, co-pay cards are not designed to completely help regular Medicaid and Medicare health insurance recipients in Puerto Rico due to coverage restrictions in dental, vision and prescription drugs, increased out-ofpocket costs after a short number of days in the hospital, and patients’ low incomes. “The most expensive medicine, more than anything else, is the one that doesn’t work and the one that you don’t take as the doctor orders,” Viera-Colón said with regard to the lower expenditures in specialty drugs.



Thursday, MARCH 31, 2016 |

Future of GDB Hangs in the


In the epic drama building over Puerto Rico’s debt crisis, many government entities play huge parts, yet few more critical than the Government Development Bank (GDB).

The island’s fiscal agent would pay some $9 million in interest payments on April 1, but come the following month, it faces a potential meltdown of apocalyptic proportions when roughly $422 million is due on May 2. The bank owes about $4.2 billion to its creditors.

The combination of fast dwindling cash reserves and no timely debt-relief action could land a mortal blow to the GDB’s operations, with ripple effects on the Puerto Rico government and economy. But what exactly does it mean to have the bank even in a partial shutdown? What is the

commonwealth government exactly willing to do about this? La Fortaleza says it is waiting for Congress to deliver favorable legislation to deal with the island’s fiscal crisis. Yet some observers have likened the latter to Samuel Beckett’s “Waiting for Godot” and believe the bank would be pressed

to siphon through its available cash to meet at least part of what it owes in May, barring some sort of lastminute funding maneuver that could prevent it from falling off the cliff and avoid creditor lawsuits. Several sources confirmed to Continues on next page


| Thursday, MARCH 31, 2016


Continues from previous page

Caribbean Business that the Alejandro García Padilla administration is already moving forward on several options that would not only address the bank’s debt situation, but also that of the rest of the commonwealth. (See Top Story.)

One such measure would seek a moratorium on payments while the GDB works things out, imposing “an FDIC-like [Federal Deposit Insurance Corp.] approach to the resolution of the situation, with the bank to protect depositors and access to its asset value, while figuring out some restructuring of

“There have been conversations on and off regarding how to help protect the institution and to have a mechanism to deal with its debt,” said one government source who chose to remain nameless. “How much of a chance this has of flying? We don’t know.” the third-party creditor debt,” said one government source with knowledge of the matter. “Traditionally, the FDIC does a good bank/bad bank act, moving assets and deposits into a good bank, then leaving behind the third-party debt.” But in the island’s Legislature, politicians continue at odds over how best to deal with the issue. In fact, they have been at it for months, and among the measures that have been discussed is the good bank/bad bank approach, as well as other ideas to provide some sort of short-term relief to the bank through local legislation, at least two sources said. But rather than keeping the GDB on life-support, some lawmakers have been pushing for months to do away with the bank once and for all. There is once again a movement afoot to revive the idea of parting ways with the institution, say several sources. Meanwhile, the GDB could already be in noncompliance with required liquidity reserves. A recent federal court ruling states that the island’s commissioner of financial institutions has found the bank to be already insolvent, and a request to the Puerto Rico Treasury secretary for a three-month waiver to meet required reserves could be in the pipeline. Back in December, the bank’s board authorized management to ask for the waiver if needed. The institution continues to scramble for ways to ensure the continuation of its day-to-day operations and, in turn, avoid what could turn out to be a devastating domino effect on the rest of the commonwealth. Behind the scenes, the GDB is also waging a war to preserve confidence in its continuation—while avoiding a run on the bank—which could prove to be a more daunting task amid all the noise and suspicions over its fiscal health.

A veil of doubt So far, most government officials have come forward in support of the GDB, recognizing the need to ensure its stability. The García Padilla administration has stated it could seek to amend the bank’s charter law, if necessary, to enforce a moratorium on the payment of GDB debt. However, La Fortaleza has said it continues to wait for congressional action before pulling the trigger. While legislation to deal with the bank’s immediate future could be filed soon, sources have told this newspaper that some high-ranking Puerto Rico lawmakers remain highly skeptical over providing short-term relief to the GDB, and are rather looking into ways to get rid of it, while creating a similar entity with a clean slate. “There have been conversations on and off regarding how to help protect the institution and to have a mechanism to deal with its debt,” said one government source who chose to remain nameless. “How much of a chance this has of flying? We don’t know.” Sources have said that the splintering of the GDB into good/bad entities may be one avenue gaining momentum to deal with its impending fiscal challenges. “Or the creditors could petition for the appointment of a receiver, and the bank can be liquidated,” another government source said. Meanwhile, the bank has been seeking to stave off requests from some government entities that have expressed their wish to take their deposits out of the institution, a development that would further drain the bank’s liquidity position, two sources recently told Caribbean Business. Last year, a legal feud between the Municipal Revenue Collection Center (CRIM by its Spanish acronym) and the GDB over the deposit of certain municipal funds

provided a glimpse of the deep concerns many government players have over the possibility of the bank facing receivership. The bank’s main sources of funding comprise public sector deposits, senior debt issued by the GDB and repurchase agreements. The GDB’s charter law calls for the Puerto Rico Treasury secretary to determine whether the bank is insolvent, who could then ask a local court to appoint a receiver to the bank, suspend operations and settle its obligations as soon as possible. The receiver would take over all assets and liabilities, as well as collect the bank’s outstanding loans, fees and claims. Since the GDB serves as the principal depositary of funds of the commonwealth and its instrumentalities, access to these funds could be significantly limited if the bank is placed under receivership. Thus, a nuclear GDB fallout could contaminate the rest of the government operations at all levels, potentially affecting essential services, and thus, the rest of the local economy. Emergency legislation for the bank could also seek to strengthen and further define the receivership process, including the powers to determine claims and their priority of payment, the commonwealth government conceded in a quarterly financial report filed late last year. Seeing it coming The GDB was conceived as an economic development motor during the administration of Rexford Tugwell, a New Deal economist in the 1940s, tasked with driving the industrialization efforts of the times. Following its heyday, the bank slowly but surely became the lender of last resort for the commonwealth government and public corporations. Continues on page 16



Thursday, MARCH 31, 2016 |

COVER STORY Continues from page 15

Fast-forward to the present, and the chickens have come home to roost. To the very last moment before it ran out of lending capacity, the bank had been financing operational deficits and fruitless projects for years, with an asset portfolio chock full of delinquent loans and credit lines, a majority of them owed by public entities. Government instrumentalities and municipalities owed the bank roughly more than $5 billion. Take for instance the whopping $2.2 billion line of credit given to the Puerto Rico Highways & Transportation Authority (HTA), of which $1.9 billion still sit on the bank’s balance sheet. This loan traces back to the administration of former Gov. Luis Fortuño. That loan must be paid back or the GDB will have to reserve the loan as a loss, a move that could further stress matters beyond oblivion. During an interview in 2015, GDB President Melba Acosta forewarned that the HTA loan payment was critical to the GDB’s survival. The crisis of solvency put the onus on the bank to improve its fiscal health and this was evidenced when it tried mightily to have the Puerto Rico Infrastructure Financing Authority successfully go to market with a $2.95 billion bond deal. Most of the bond proceeds would have gone to pay for the outstanding HTA loan. A confluence of events, namely a delay in amendments to the petroleum-products tax, known as la crudita, that would have secured the intended bonds, and horrendous press on Puerto Rico’s debt crisis, made it impossible for the commonwealth to close the deal. The legislative harangue in the run up to pass amendments to la crudita is emblematic of plots upon subplots in the hallowed halls of the Puerto Rico Capitol building, which would lead observers to the conclusion that some lawmakers would rather see the bank disappear altogether than throw it a lifeline. Red flags over the bank’s fiscal health have been popping up for quite some time, with the gap between assets and loans

GDB President & Chairwoman Melba Acosta

continuously closing for at least the past two decades. The past year and a half has certainly been a bumpy ride for the GDB, which saw a handful of its board members resigning their posts almost simultaneously during the summer. Then-chairman, David Chafey Jr., a former president of Banco Popular, was among those who exited. Popular, the financial institution recently opted out of being the trustee in charge of most of the GDB’s outstanding debt. Meanwhile, Acosta has been acting as chairwoman, and three new members entered the board, including Office of Management & Budget Director Luis Cruz. La Fortaleza still has to fill one more vacancy on the bank’s board. The GDB law states that the governor would do so within 60 days following an untimely vacancy. The García Padilla administration also enacted a highly debated measure that strengthened bank officers’ immunity provisions

From 2014 to early 2015, GDB chief Melba Acosta rallied behind plans to issue roughly $2.95 billion in new debt, with most of its proceeds going to pay a mammoth $2 billionplus loan made to the Highways Authority. Things went south for Puerto Rico on Wall Street and with no access to capital markets, the loan still sits ominously on the bank’s books. under the GDB’s charter law. Given its limited access to external financing, the bank has also set in motion a host of measures in an effort to meet its liquidity needs and maintain operations. Legislation was enacted to require public entities to transfer to the GDB

deposits held in private banks, as well as implement more strict lending controls for the government bank. The GDB has also been selling chunks of assets to come up with cash. For instance, the bank posted earlier this month a notice for institutions

interested in acquiring roughly $32 million in loans made by the GDB to various hotel projects. All these maneuvers have been geared toward propping up liquidity levels at the bank. Yet, it has been months since the bank’s last official update on its cash position was released. Uncertainty over GDB’s current condition The last liquidity update reported by the GDB dates back to September, when it topped at roughly $875 million. At least two sources have confirmed to Caribbean Business that the GDB has stopped reporting its liquidity over concerns there could be a backlash at the bank, such as triggering a bank run that could turn out to have a deadly snowball effect on other government dependencies. Since last year, the Office of the Continues on next page


| Thursday, MARCH 31, 2016


Continues from previous page

Commissioner of Financial Institutions (OCIF by its Spanish acronym), which oversees the GDB, has been examining the bank’s operations and solvency, but has yet to release its findings. Nevertheless, as a result of a legal dispute between the commonwealth and retail giant Walmart over a tax imposed on the company’s local operations, a federal judge conceded that OCIF has already found the bank to be insolvent and receivership may follow. The GDB’s ongoing audit processes have also affected the commonwealth’s long-overdue audited financial statements for fiscal year 2014, which must include an updated snapshot of the bank’s fiscal health. While government officials had pointed to the first week of April for the release of these statements, many observers remain skeptical over this deadline, given the island’s most recent

In the island’s Legislature, politicians have been at odds for months over how best to deal with the bank’s fiscal challenges. While some lawmakers would keep the GDB on life-support, others argue it is time to part ways with the institution. fiscal developments, which could further delay their delivery—and a fresh look into the GDB’s state of affairs. The bank has roughly $4.2 billion in outstanding notes, or debt, with short- and medium-term maturities ranging from 2015 through 2026, amid escalating interest rates. Most of this debt was issued during the previous administration, with the bank under the helm of former GDB presidents Carlos García and Juan Carlos Batlle, and chairman Marcos RodríguezEma. Last year, the GDB engaged in discussions with a group of

creditors seeking to exchange existing notes for new paper and more favorable payment terms for the bank. But talks went south and suddenly ended in October, after failing to reach a “mutually acceptable arrangement,” the bank stated at the time. The GDB said it would focus on achieving a broader, voluntary exchange offer for most Puerto Rico creditors—a process that has yet to gain traction, with advisers for all sides still going back and forth over several proposals that have been brought to the table. These include two from the government, while a third offer is already being

discussed, although not publicly, sources have told Caribbean Business. (See Top Story.) The bank could very well use some type of forbearance from its creditors while restructuring talks take place. Nevertheless, discussions with GDB creditors over such relief action have been so far unsuccessful, one source told this newspaper. And as is the case with the rest of the commonwealth, there is very little leverage, as of today, to have creditors voluntarily sitting down at the negotiation table. “The bank’s existence will be perpetual,” reads the GDB’s

charter law, enacted in 1948. Will the bank go under? And if it does, is there a viable Plan B to manage the island’s fiscal nitty-gritty during a debt crisis ready to go up a couple of notches? After all, as the island’s fiscal agent, the GDB leads all fiscal stability and debtrestructuring work for the administration, including overall talks with creditors. The bank serves as a sort of liaison between the commonwealth and its external advisers, chief among them, Millstein & Co.’s Jim Millstein, a former lead restructuring adviser for the U.S. Treasury. Supporters believe the GDB should continue as an entity and be saved at all costs in an effort to bring it back to better times. Naysayers think it is time to move on. And then there are those who do not know quite yet what the best solution may be. All sides see the GDB as the elephant in the room; they stare at it aghast, but have yet to act.

Heiko Faass, CEO Ferrer Faass & Co

You’ll always find a clever mind behind a Caribbean Business. Find out how to empower your mind with Caribbean Business. Visit or call (787)728-7670 to subscribe.

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| Thursday, MARCH 31, 2016


Transfer pricing case

Wal-Mart Transfer-Pricing Tax Declared Unconstitutional Commonwealth Will Appeal

U.S. District Court Judge José A. Fusté


U.S. District Court Judge José A. Fusté ruled March 28 that a transfer-pricing tax the Puerto Rico government sought to impose on WalMart stores in a bid to shore up its coffers is unconstitutional. Fusté’s ruling comes as yet another blow for Puerto Rico’s coffers, with revenue projections slated to be affected for fiscal 2016. “It gives us no pleasure, under these circumstances, to enjoin a revenue stream that flows directly into Puerto Rico’s general fisc. For we, too, are citizens of this island, and we, too, must suffer the consequences of the financial disarray on the horizon. But, we are in this position precisely because the Commonwealth’s insolvency has left the plaintiff, Wal-Mart Puerto

Rico, Inc., with nowhere else to turn. Now that we are here, we cannot shield ourselves from what we have learned, but must rule on the issues presented and order the relief required by law. In doing this, we agree wholeheartedly with the conclusion reached by one of the expert witnesses at the hearing we held: ‘[A]t the end of the day, the Commonwealth should not rely on revenue that it’s not entitled to, to try to pay for essential services,’” the judge ruled. Gov. Alejandro García Padilla responded quickly, saying the commonwealth government would appeal. “Judge Fusté just took $100 million from the Puerto Rican people to give to Walmart. You just took $100 million from children who ride school public transportation, who receive special education, from public schools, from municipalities

for asphalt,” the governor said. “Now I have to look for that money somewhere else. Of course I’m going to appeal the decision, and immediately.” Wal-Mart Puerto Rico had filed a lawsuit against the commonwealth government after local officials implemented the transfer-pricing tax hike last year through the signing of Act 72 of 2015. The law effectively increases the rate in which corporate property coming from outside Puerto Rico is taxed, specifically from 2% to 6.5%, on entities that generate more than $2.75 billion in business annually on the island. In their suit against the island’s Treasury Department, Wal-Mart Puerto Rico execs alleged government officials were singling out the retail giant for inequitable tax treatment.

They argued the unconstitutionality of such a practice, citing the U.S. Constitution’s Commerce Clause—which gives Congress the power to regulate commerce with foreign nations and among the states—as well as equal protection laws. Wal-Mart Puerto Rico sells about $3 billion worth of merchandise each year and remits more sales tax to the commonwealth than any other retailer. It buys around $1.6 billion in inventory from local vendors and suppliers each year. It also buys more than $700 million in inventory from its parent company, Wal-Mart Stores Inc., and related affiliates in mainland United States. Earlier this year, Wal-Mart announced that it is planning to close 269 stores worldwide, including seven in Puerto Rico. While legal experts questioned the ability of federal courts to interfere with tax collections, Wal-Mart has argued that the new law violates the aforementioned Commerce Clause because it places the 6.5% tax on property bought outside the commonwealth, but not if said property is bought in Puerto Rico. The plaintiffs also dismissed claims by the commonwealth government that Wal-Mart Puerto Rico had used transfer pricing to evade its proper tax burden. They also alleged that the new tax rate would amount to more than 91% of Wal-Mart’s net income in Puerto Rico, with Iván Baez, corporate affairs director, even saying the company would leave the island if the tax hike were to take effect. In their questioning of the limits that federal courts have in interfering with state taxes, local officials stated that the Butler Act, a close relative of the federal Tax Injunction Act, prevents lawsuits that seek to restrain the collection of any tax imposed by the laws of Puerto Rico. The commonwealth government contended that a more valid way to challenge a tax is to pay it first and then sue to get the money back. A total of 11 witnesses participated in the trial, including Government Development Bank (GDB)

President Melba Acosta and Puerto Rico Treasury Secretary Juan Zaragoza. Fusté noted in his ruling that the commonwealth is insolvent and no longer able to pay its debts as they become due. The Treasury Single Account, which functions as the commonwealth’s main operating account, will reach almost a $1 billion negative balance by the end of June 2016. The Financial Institutions Commissioner’s Office found the Government Development Bank of Puerto Rico insolvent as well, which means it may need to go into receivership. When, in 2015, the commissioner approached the [GDB] about conducting a liquidity review, the bank dragged its feet and took more than six months to disclose “the minimum necessary information to produce” the review. The commissioner later described the “flow of information” from the bank as “extremely slow and inadequate.” The commissioner was able to evaluate the bank’s internal financials, however, focusing “particular attention on the adequacy and sustainability of [its] liquidity levels.” Based on the bank’s internal information, the commissioner found that the bank’s “[l]iquidity levels are critically deficient in relation to [its] weakened financial conditions caused by an elevated debt exposure and obstructed access to capital markets,” rendering “[t]he continued viability of [the GDB] questionable,” Fusté said. Island officials recently warned about the negative impact of the litigation as it updated projections for fiscal years 2016 to 2020 to account for year-to-date actual results. “General fund inflow assumptions do not account for the potential risk of a material negative impact [$115 million in fiscal 2016] from the ongoing Wal-Mart litigation,” according to a footnote in an update issued Jan. 18 to the Puerto Rico Fiscal & Economic Growth Plan. —Reporters Dennis Costa and José Carmona and Editor Rosario Fajardo contributed to this story.



Thursday, MARCH 31, 2016 |








HIGH 52-wk 52-wk 52-wk 52-wk 52-wk STOCK SYMBOL 52-wk LOW 52-wk HIGH 52-wk STOCK SYMBOL LOW HIGH Popular Inc. BPOP 25,80 35,83 STOCK SYMBOL LOW HIGH STOCK SYMBOL LOW HIGH Popular 25,80 35,83 Triple-S Inc. Management Corp. BPOP GTS 17,34 27,07 Popular Inc. BPOP 25,80 35,83 Popular Inc. BPOP 22.40 35.81 Popular Inc. BPOP 25,80 35,83 Triple-S Management Corp. GTS 17,34 27,07 Evertec Inc. EVTC 14,93 23,12 EvertecManagement Inc. EVTC17,34 11.2727,07 23.12 Triple-S Corp. GTS Triple-S Management Corp. GTS 17,34 27,07 Evertec Inc. EVTC 14,93 23,12 FirstBancorp BanCorp FBP14,93   6.76 OFG OFG 6,25   2.0623,12 17,83 Evertec Inc. EVTC Evertec Inc. EVTC 14,93 23,12 OFG Bancorp OFG   4.56 17.25 OFG OFG 6,25 17,83 FirstBancorp BanCorp FBP 2,97 6,76 OFG Bancorp OFG 6,25 17,83 Triple-S Management Corp.OFG GTS 17.3417,8327.23 OFG Bancorp 6,25 First BanCorp FBP 2,97 6,76 First BanCorp FBP 2,97 6,76 First BanCorp FBP 2,97 6,76



3/24 1/8





12/31 PRICE PRICE PRICE 12/31 PRICE 12/31 28,34 12/31 3/18 28,34 23,91 28,34 28.57 28,34 23,91 16,74 14.00 23,91 23,91 16,74   3.15 7,32 16,74 16,74   7.20 7,32 3,25 7,32 24.74 7,32 3,25 3,25 3,25

1/8 PRICE PRICE PRICE 1/8 PRICE 1/8 25,84 1/83/24 25,84 22,07 25,84 27.94 25,84 22,07 15,47 13.42 22,07 22,07 15,47   2.69 6,30 15,47 15,47   6.96 6,30 2,99 6,30 24.70 6,30 2,99 2,99 2,99




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CHANGE CHANGE -2,50 CHANGE CHANGE -2,50 -1,84 -2,50 -0.63 -2,50 -1,84 -1,27 -0.58 -1,84 -1,84 -1,27 -0.46 -1,02 -1,27 -1,27 -0.24 -1,02 -0,26 -1,02 -0.04 -1,02 -0,26 -0,26 -0,26

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the Standard & Poor’s (S&P) 500 Index and Dow Jones Industrial Average

Despite a that stronger-than-expected report forhikes December, officials raised expectationsU.S. forjobs-growth more interest-rate this Despite a stronger-than-expected U.S. jobs-growth report for on December, posted their worst five-day start to a year onDow record last Friday, continthe Standard & Poor’s (S&P) 500 Index and Jones Industrial Average year, weighed down on commodity stocks last Thursday. The topDespite a stronger-than-expected U.S. jobs-growth report for December, the &a Poor’s (S&P) Index and Dow Jones Industrial Average uedStandard concerns slowdown in 500 China damage the global At three stock indexes mainly closed flat for theJones day and foreconomy. the shortposted their worst five-day to acould year record last Friday, on continthe Standard & Poor’s (S&P) start 500 Index andon Dow Industrial Average posted their worst five-day start to a year on record last Friday, on continthe end of trading last Friday, the Dow fell 1.02%, the S&P 500 lost 1.08% ened week since the stockinmarket Good The dollar ued concerns a slowdown China was couldclosed damage the Friday. global economy. At posted their worst five-day start to a 0.98%. year record lastdeclines Friday,economy. on continued concerns a slowdown in China couldon damage the global At andend Nasdaq Composite dropped weekly the S&P had athe weekly gain of more than 1% against a basket currencies after the of trading last Friday, the Dow fellThe 1.02%, theofS&P 500on lost 1.08% ued concerns a slowdown in China could damage the global economy. At end lastlargest Friday,since the Dow fell 1.02%, loston 1.08% and the of Dow wereFederal the September 2011,the andS&P the500 largest reathe chorus oftrading U.S. signaled interest-rate and the Nasdaq CompositeReserve droppedofficials 0.98%. The weeklymore declines on the S&P the end of trading last Friday, the Dow fell 1.02%, the S&P 500 lost 1.08% and the Nasdaq Composite dropped 0.98%. The weekly declines on the S&P increases than the market had priced in. Thebylatest wasBureau St. Louis Fed cord to mark the start of a year. Data released the U.S. of Labor and the Dow were the largest since September 2011, and the largest on reand the Nasdaq Composite dropped 0.98%. The weekly declines the and the Dow were the largest since September 2011, and the largest onS&P rePresident James Bullard, who said lastincreased Thursday another U.S. inStatistics showed U.S. nonfarm payrolls bythat 292,000 inon December cord to mark the start of a year. Data released by the U.S. Bureau of Labor cord to mark the start of a year. Data released by the U.S. Bureau of Labor and the Dow were the largest September 2011,U.S. andpayrolls the largest onthe reterest-rate hikerate “may not besince faratoff.” Last week’s remarks followed and the jobless held steady 5%. In addition, for October Statistics showed U.S. nonfarm payrolls increased by 292,000 in December U.S. central bank’s March meeting, inincreased which halved its rateStatistics showed U.S. payrolls byFed 292,000 in December cord mark the start ofnonfarm a year. Data released by the the U.S. Bureau of previLabor andtoNovember were revised to show 50,000 more jobs created than and the jobless rate to held steady atfour, 5%. Infor addition, U.S.In payrolls for October hike expectations two, from this year. turn, dollar and the jobless rate held steady ata 5%. addition, U.S. payrolls for October Statistics showed U.S. nonfarm payrolls increased by 292,000 inathe December ously reported. Oil prices fell for fifthIn day last Friday. Fears of slowdown and November were revised to show 50,000 more jobs created than previindex was pushed higher last Thursday to a fifth day of gains—its best and November were revised to show 50,000 more jobs created than previand jobless rateglobal held steady at 5%. addition,investors U.S. payrolls for October inthe China and the economy keptInspooking last week, creatously reported. Oil prices fell for a fifth day last Friday. Fears of a slowdown run since April. For the week, the Dow Jones Industrial Average addously Oil prices fell for a fifth day Fears ofthan afell slowdown and November were revised to show 50,000 more jobs created previing a reported. turbulent start to the trading year. Forlast theFriday. week, the Dow 6.2% to in China the global economy The kept S&P spooking last week, created 1.76%and to close at 17,515.73. 500investors Index inched up 0.68% in China and the global kept spooking investors last creatously reported. Oil prices fell day lastwhile Friday. Fears of week, a Composite slowdown 16,346.45. The S&P 500economy lostfor 6%a fifth to 1,922.03, the Nasdaq to at 2,035.94, the Nasdaq Composite edged ingclose a turbulent start towhile the trading year. For the week,Index the Dow fell 0.53% 6.2% to ing a turbulent start toeconomy the trading year. For theinvestors week, thelast Dow fell 6.2% to inhigher China and the 7.3% global kept spooking week, creatIndex dropped to 4,643.63. to close at 4,773.51. 16,346.45. The S&P 500 lost 6% to 1,922.03, while the Nasdaq Composite 16,346.45. Thestart S&Pto 500 6% to 1,922.03, while the Nasdaq Composite ing a turbulent thelost trading year. For the week, the Dow fell 6.2% to Index dropped 7.3% to 4,643.63. Index dropped 7.3% to 4,643.63. On the local front, the Government Development Bank’s Puerto Rico Stock 16,346.45. The S&P 500 lost 6% to 1,922.03, while the Nasdaq Composite After five weeks of gains, the Government Development Bank’s

Index (PRSI) posted a4,643.63. heavy(PRSI) loss during itsin first of the year, spearPuerto Rico 7.3% Stock closed theweek red during the shortIndex dropped toIndex On the local front, the Government Development Bank’s Puerto Rico Stock On the local front, the Government Development Bank’s Puerto Rico Stock ened week, withweek’s all components reporting week, headed by last massive stock selloff.weekly For theloses. week,For thethe PRSI lost Index (PRSI) posted a heavy loss during its first week of the year, spearIndex (PRSI) posted aGovernment heavy loss during its week ofPuerto the year, spear65.18, or towith close at 1,625.68. Last week’s top 150.86, or erased 8.62%, to close at 3.85%, 1,598.79, allfirst components in the red for the Onthe thePRSI local front, the Development Bank’s Rico Stock headed by last week’s massive stock selloff. For the week, the PRSI lost nongainer was First BanCorp, which fell 46 cents, or 14.60%, to close headed by last week’s massive stock selloff. For the week, the PRSI lost five-day period. Leading last week’s nongainers was OFG Bancorp, which Index (PRSI) posted aclose heavy loss during itsallfirst week of the year, spear150.86, or 8.62%, to at 1,598.79, withInc., components in the 58 red cents, for the at $2.69. It was followed by Evertec which dropped 150.86, or 8.62%, to close at close 1,598.79, with all in red forInc., the erased $1.02, or 13.93%, to at $6.30. It components was followed bythe Popular headed by last week’s massive stock selloff. For the week, the PRSI lost five-day period. Leading last week’s nongainers was OFG Bancorp, which or 4.14%, to close at $13.42 after announcing a restatement of its fifive-day period. Leading last week’s nongainers was OFG Bancorp, which which skidded $2.50, orat8.82%, to close $25.84. Sharesin ofthe First BanCorp 150.86, 8.62%, close withat allIt components red forInc., the erasedor$1.02, orto 13.93%, to1,598.79, close at $6.30. wasShares followed by Popular nancial statements for 2013, 2014 and 2015. of OFG Bancorp erased 13.93%, to close at $6.30. It wasManagement followed by Popular Inc., fell 26 $1.02, cents, or or 8%, to last close at $2.99. Triple-S Corp. which edged five-day period. Leading week’s nongainers was OFG of Bancorp, edged down 24$2.50, cents,oror 3.33%, close $6.96. Popular Inc.BanCorp lost 63 which skidded 8.82%, to to close at at $25.84. Shares First which skidded $2.50, orto8.82%, to$22.07. close atShares $25.84.ofShares ofInc. First BanCorp down $1.84, or 7.70%, close at Evertec lost $1.27, erased oror13.93%, close $6.30. It wasManagement followed by Popular Inc., cents, or 2.21%, to close at $27.94. Triple-S Corp. 4 fell 26$1.02, cents, 8%, toto close at at $2.99. Triple-S Management Corp. fell edged fell 26 cents, or 8%, to close at $2.99. Triple-S Management Corp. edged or 7.59%, to close at or $15.47. which skidded $2.50, 8.82%, to close at $25.84. Shares of First BanCorp cents, or 0.16%, to close at $24.70. down $1.84, or 7.70%, to close at $22.07. Shares of Evertec Inc. lost $1.27, down $1.84, or 7.70%, to close at $22.07. Shares of Evertec Inc. lost $1.27, fell cents, or 8%, close at $2.99. Triple-S Management Corp. edged or 26 7.59%, to close atto $15.47. or toCarmona close at $15.47. By José By7.59%, José L. L. Carmona down $1.84, or 7.70%, to close at $22.07. Shares of Evertec Inc. lost $1.27, Senior Reporter, Banking/Finance senior reporter, Banking/FinanCe Business orCaribbean 7.59%, to close at $15.47. By José L. Carmona CariBBean BUsiness By José L. Carmona senior reporter, Banking/FinanCe senior reporter, Banking/FinanCe BUsiness ByCariBBean José L. Carmona

Sin Comillas is a Spanish-language digital media website that specializes news in suchdigital areas media as economics, banking, Sin Comillasinisbusiness a Spanish-language website that Sin Comillas istourism. a Spanish-language digital mediainwebsite that planning and Sin Comillas was founded 2010 by Sin Comillas is a Spanish-language digital media website specializes in business news in such areas as economics, that banking, specializesand in business news inGarcía such areas as economics, banking, economist journalist Luisa Pelatti. specializes in tourism. business news in such areas as economics, planning and Sin Comillas was founded in 2010 bybanking, planning and tourism. Sin Comillas was founded in 2010 by planning SinLuisa Comillas was founded in 2010 by economistand andtourism. journalist García Pelatti. economist and journalist Luisa García Pelatti. economist and journalist Luisa García Pelatti.

Public-Debt Audit Committee to Hold First Meeting Public-Debt Audit Committee to Hold First Meeting Public-Debt Next Week Audit Public-Debt Audit Committee Committee to toHold HoldFirst FirstMeeting Meeting Next Week Next Week Week Next

Some Credit Unions Would Take Over 100 Years to Cover Losses BY LUISA GARCÍA PELATTI SIN COMILLAS

Credit unions’ investments in Puerto Rico bonds have resulted in an unrealized loss of more than $500 million, an amount that would exceed the credit unions’ capital. These numbers mean that even with the new accounting law (Act 220 of 2015) that gives Cossec credit unions up to 15 years to recoup realized losses, some credit President unions would be unable to write off losses even after 100 years. Daniel Sin Comillas has learned that several advisers to the U.S. Congress Rodríguez would recommend the Cooperatives Supervision & Insurance Corp. Collazo (Cossec by its Spanish acronym) become part of the National Credit Union Administration (NCUA) in an attempt mitigate the next systemic risk that repPuerto Rico Senate President Eduardo Bhatia called for the to first meeting Tuesday, 19, ofunions the Public resent in light of a possible Puerto Rico governDebt Audit Committee. The committee will examine and evaluate the hiring, refinancing and/or renegotiatPuerto Rico Senate President Eduardo Bhatia called for the first next Tuesday, Jan. 19, of the Public mentmeeting default. The as recommendation would also Puerto Ricoof Senate Eduardo called the first meeting next Tuesday, 19, of the Public ing process PuertoPresident Rico’s public debt,Bhatia the origin andfor destination of resources, well as Jan. the performance of Debt Audit Committee. The committee will examine and evaluate the hiring, refinancing and/or renegotiatseek greater transparency in the credit union Debt Audit Committee. The committee will examine and evaluate the hiring, refinancing and/or Puerto Rico Senate with President Eduardo Bhatia called the first meeting next Tuesday, Jan. 19, renegotiatof but thewas Public programs financed internal or external debt. Thefor first meeting was originally set for December ing process of Puerto Rico’s public debt, the origin and destination of resources, as well as the performance industry’s data. Other sources claim that theof ing process of Puerto Rico’s public debt, the andand destination of resources, asin well as and the performance of Debt AuditThe Committee. TheAudit committee willorigin examine evaluate the hiring, refinancing and/or renegotiatcancelled. Public-Debt Committee was created through Act 97 of 2015 July, has to render programs financed with internal or external debt. The first meeting wasrole originally setonly for December but was NCUA’s would be as advisers to programs financed with internal ordebt, external debt. The meetingofwas originally butthe wasof ing process ofperformance Puerto Rico’s public the origin and first destination resources, as set wellfor asDecember the performance reports of its every six months. cancelled. The Public-Debt Audit Committee was created through 97 of 2015 in July, and has to render U.S.Act Treasury Department. cancelled.financed The Public-Debt Audit or Committee was created through Act 97originally of 2015 inset July, has to render programs with internal external debt. The first meeting was forand December but was reports of its performance every six months. The last time reported inforreports of its performance every months. was The commission has to define thesix methodology to conduct audit Act of Puerto $70 billion as orcancelled. The Public-Debt Audit Committee created the through 97 of Rico’s 2015 Cossec in July, and debt has to render on the the indebtedness impact of credit unions’ dered byoflaw, create a database that for all manner of analysismation regarding process and reports its performance every sixallows months. The commission has to define the methodology to conduct the audit of Puerto Rico’s $70 billionbonds debt as orinvestments in indebtedness government was Theup commission has to define the methodology conduct the auditing audit of Puerto Rico’s $70 billionprocesses. debt as orset an information transparency system for thetoinvestigative, and future dered by law, create a database that allows for all manner of analysis in regarding the indebtedness process and August 2015. At the time, Cossec dered by law, create a database that allows for all manner of analysis regarding the indebtedness process and The commission has to define the methodology to conduct the audit of Puerto Rico’s $70 billion debt as orset up an information transparency system for the investigative, auditing and future indebtedness processes. President Daniel Rodríguez Collazo set upby an information transparency system forP.R. the investigative, auditing and future indebtedness processes. Besides Bhatia, the committee’s members House Speaker Jaime Perelló; Senate majority spokesperdered law, create a database that allowsare for all manner of analysis regarding the indebtedness process and revealed that credit unions’ unrealsonup Aníbal José Torres;transparency Senate Minority Leader Seilhamer, Puerto Rican Independence Party Sen. María set anBhatia, information system forLarry the House investigative, and future indebtedness processes. Besides the committee’s members are P.R. Speakerauditing Jaime Perelló; Senate majority spokesperized losses amounted to $400 million. Besides Bhatia, the committee’s members P.R. House Speaker JaimeMinority Perelló; Leader Senate Jenniffer majority spokesperde Lourdes Santiago; House Majority Leaderare Charlie Hernández; House González; son Aníbal José Torres; Senate Minority Leader Larry Seilhamer, PuertoSin Rican Independence Partyto Sen. María Comillas has had access data for son Aníbal José Torres; Senate Minority Leader Larry Seilhamer, Puerto Rican Independence Party Sen. María Government Development Bank President &are Chairwoman Melba Acosta; Statistics Institute Executive Mario Besides Bhatia, the committee’s members P.R. House Speaker Jaime Perelló; Senate majority spokesperde Lourdes Santiago; House Majority Leader Charlie Hernández; House Minority Leader Jenniffer González; Sept. 30, 2015, and credit unions are de Lourdes Santiago; House Majority Leader Charlie House Rican Minority Leader Jenniffer Marazzi; economist José Alameda; lawyer & CPA JuanHernández; Lorenzo Martínez; Puerto Rico Syndicate of González; Workers son Aníbal José Torres; Senate Minority Leader Larry Seilhamer, Independence Party Sen. María Government Development Bank President & Chairwoman Melba Puerto Acosta; Statistics Institute Executive Mario now talking about an unrealized loss of President Roberto Pagán; FirstBank President Aurelio Alemán; Irma Hilario Arroyo, representing the Caguas Government Development Bank President & Chairwoman Melba Acosta; Statistics Institute Executive Mario de Lourdes Santiago; House Majority Leader Charlie Hernández; House Minority Leader Jenniffer González; Marazzi; economist José Alameda; lawyer & CPA Juan Lorenzo Martínez; Puerto Rico Syndicate of Workers $504 million. Credit unions have $472 Savings Loan Cooperative; and P.R. Chamber of Commerce President Frank Medina. Marazzi;&economist José Alameda; lawyer &&CPA Juan Lorenzo Martínez; Puerto Rico Syndicate of Workers Government Development Bank President Chairwoman Melba Acosta; Statistics Institute Executive Mario President Roberto Pagán; FirstBank President Aurelio Alemán; Irma Hilario Arroyo, the Caguas million in capital, representing which would represent President Roberto Pagán; FirstBank President Aurelio Alemán; Irma Hilario Arroyo, representing the Caguas Marazzi; economist José Alameda; lawyer & CPA Juan Lorenzo Martínez; Puerto Rico Syndicate of Workers Savings & Loan Cooperative; and P.R. Chamber of Commerce President Frank negative net Medina. capital of $32 million.with the These appointments were made November heads ofPresident both legislative compliance Savings & Roberto Loan Cooperative; andlast P.R. Chamberby ofthe Commerce Frank bodies, President Pagán; FirstBank President Aurelio Alemán; Irma Hilario Arroyo, representing the Caguas A total of 41 credit unions are experiencing disposition of law that states that if the governor didn’t complete the appointments within 10 days after the Savings & Loan Cooperative; and P.R. Chamber of Commerce President Frank Medina. These appointments were made last November by the heads of both legislative bodies, in compliance with the deficits: three are credit unions with less than law went into effect, by mutual the heads ofheads the Legislature would carry them These appointments were madeagreement last November by the of both legislative bodies, inout. compliance with the disposition of law that states that if the governor didn’t complete the appointments withinin 10assets days after the $10 million repredisposition of law that states that if the governor didn’t complete the appointments within 10 days after the These appointments were madeagreement last November by theofheads of both legislative bodies, inout. compliance with the law went into effect, by mutual the heads the Legislature would carry them senting 10% of the overall seg“The country its fiscal situation are at athe critical moment whereby determined law went intoand effect, by mutual agreement heads of the Legislature would carryaction themhas be taken redisposition of law that states that if the governor didn’t complete the appointments within 10 unions days after the ment; 10 are credit that garding the debt. In this process, transparency is indispensable for all parts, especially for the people of Puerto law went into and effect, by mutual agreement the headsmoment of the Legislature would have carry themhas out. “The country its fiscal situation are at a critical whereby determined action to be taken rebetween $10 million and Rico. is the spirit of thesituation creation of Audit Committee through Act 97 ofhas 2015, it is my “TheThat country and its fiscal arethe at Public-Debt a critical moment whereby determined action to and be taken re$50 million inpeople assets, of outPuerto of a garding the debt. In this process, transparency is duties indispensable forinall parts, especially for the commitment that action is taken to carry out the described that law,” Bhatia said. garding the debt. In this process, transparency is indispensable for all parts, especially for the people of Puerto “The and its fiscal at a critical moment whereby determined action to be taken retotalAct of 30 inhas this category; Rico. country That is the spirit of thesituation creation are of the Public-Debt Audit Committee through 97 of 2015, and it is19 my Rico. That is the spirit of the creation of the Public-Debt Audit Committee through Act 97 of 2015, and it is my garding the STAFF debt. this process, is indispensable forinall parts, especially forhave the people Puerto out of 33 betweenof$50 commitment thatIn action is taken transparency to carry out the duties described that law,” Bhatia said. BY SIN COMILLAS commitment that action is taken to carry out the duties described in that law,” Bhatia said. Rico. That is the spirit of the creation of the Public-Debt Audit Committee through Act 97 of 2015, and it is my BY SIN COMILLAS STAFF commitment that action is taken to carry out the duties described in that law,” Bhatia said. Continues on next page BY SIN COMILLAS STAFF BY SIN COMILLAS STAFF


| Thursday, MARCH 31, 2016


SIN COMILLAS Continues from previous page

million and $100 million in assets; and nine are credit unions with more than $100 million in assets, out of a total of 22. Larger credit unions, meaning those with more than $100 million in assets, could recover from losses ($13 million on average per credit union) in four years. However, it could take smaller credit unions an average of 19 years to recover. But the biggest problems are found in midsize credit unions that have more than $10 million and less than $100 million in assets. In these cases, the average recovery time is around 19 years on average, but it could take some credit unions 45, 53 or even 119 years to recoup losses. An NCUA membership would also provide greater coverage to Cossec in case of a government default. The net reserve is $240 million, which falls short of helping credit unions whose losses could be three times higher than that amount. But credit unions have an obstacle to become NCUA members. For example, they do not comply with GAAPs (Generally Accepted Accounting Principles) after Act 220 was approved last year. This law was passed to help cooperatives that will be affected by the possible default. The credit union industry has about $1.5 billion in government bonds. Out of that number, the savings & loan sector has about $1.1 billion in its portfolio. Most of this amount, about $469 million, is invested in Government Development Bank (GDB) bonds; $126 million in general-obligation (GO) bonds; and $90 million in Sales Tax Financing Corp. (Cofina by its Spanish acronym) bonds. The rest includes investments in the Corporation for Public Financing ($82 million); Puerto Rico Electric Power Authority ($73 million); Puerto Rico Aqueduct & Sewer Authority ($72 million); and Public Buildings Authority ($55 million), among others. Cossec has $50.4 million in government bonds: $34.2 million in GDB bonds, $14.4 million in Cofina bonds and $1.8 million in GO bonds. n

Pensions Suspended for Catholic Schools Teachers BY SIN COMILLAS STAFF

The Archdiocese of San Juan has reported its decision to cancel its retirement plan for Catholic school teachers as of July 2016. Pension payments currently exceed contributions and, in light of the “difficult financial situation” faced by both participating schools and schoolchildren’s parents, officials have been unable to increase contributions to the retirement plan or tuition costs. The last pension payment will be made in June 2016. The situation was reported via a letter dated Monday, March 14, to which Sin Comillas had access. After consulting with experts, the Superintendence of Catholic Schools Pension Plan’s Board of

Trustees recommended ending the retirement plan, and participating schools voted in favor of bringing the plan to an end. The retirement plan was launched in 1979 as a definedbenefits plan and, from day one, it was stated that it could end at any time. Only participating employers have made contributions to this retirement plan, not beneficiaries. The Archdiocese of San Juan explained in the letter that many retirement plans have been canceled or amended to reduce benefits due to an increase in participants’ life expectancy and reduced investment income as a result of drops in the stock market, which has made it very expensive to retain these plans. n

U.S. Treasury Secretary Asks Congress for Immediate Action BY SIN COMILLAS

U.S. Treasury Secretary Jacob J. Lew has called once again on Congress to act immediately to help Puerto Rico out of its fiscal crisis. “There is an immediate crisis in Puerto Rico; it is not a future crisis. For all practical purposes, they are in default because they are not paying some of their bond issues. They have large payments due in May and July, and we do not see a way they can make those payments. The need for action is immediate,” said Lew during his speech last week before the U.S. House of Representatives’ Financial Services Committee. “I think the work is being

done—I have not seen the product of the work done by the [U.S. House] Natural Resources Committee—but the work being done is very important and it is very time sensitive,” Lew said, adding that the legislation presented must include a supervisory authority and the possibility of restructuring Puerto Rico’s $70 billion debt in its entirety. Lew believes that even general-obligation debt should at least be restructured and he is against a single solution for all the island’s debts. The Treasury secretary does not believe that Puerto Rico’s debt problems will affect other municipal bonds and quoted three analysts who have

U.S. Treasury Secretary Jacob J. Lew

presented studies that support this view. Each bond issue is considered independently. “I think the worst thing that could happen to the municipal

bond market would be a disorderly restructuring taking place in Puerto Rico, which is what will happen if Congress takes no action,” he said. n



Thursday, MARCH 31, 2016 |


Puerto Rico has not even scratched the surface of what is possible.

Focus on the Signs that Give Us Confidence By Nicholas Prouty

The following is a speech delivered by Nicholas Prouty at the Puerto Rico Investment Summit held at the Puerto Rico Convention Center Feb. 11 & 12. A few years ago, the Governor of Puerto Rico and I received invitations from President Clinton to participate in the 20th Anniversary of the Summit of the Americas. While we were in Miami, the former President complained to me that when it came to Alejandro García Padilla, life was unfair. That although, he and the Governor could each get on the cover of the New Republic for their commitment to democratic ideals, only Gov. García Padilla could command the cover of GQ! I have been asked to share my thoughts on Puerto Rico’s future. I am completely locked into the evolution of this amazing island for three reasons: First, it is where my daughter’s fondest memories will be made, that is when she reaches my age and looks back on the images of her childhood, our life in San Juan and our weekends snorkeling in the pristine waters off Fajardo will be front and center; second, because a large part of my business depends on what happens here, locally; and third, because I see a bright future, a

Historians will look back upon this period, at THIS moment, and write books on how Puerto Rico became one of the great turnaround stories. historic exercise in evolution and transformation. You are going to hear from the panelists [at the Summit that day] that Puerto Rico made history at mid-century when it embarked on a successful process of industrialization and quasi-political autonomy. That was nation building. Historians will look back upon this period, at THIS moment, and write books on how Puerto Rico became one of the great turnaround stories.

For many, that future is hard to envision—so many factors remain undecided but most sensible people seem to agree that Puerto Rico will only emerge from this situation as a result of restructuring, reforming, economic growth and greater clarity on the status issue. Bear in mind that this situation is decades in the making and it will take time, discipline and some creativity to sort out. However, in the meantime, this Acts 20/22 program exists and its impact on

both your family’s financial future and the lives of everyday Puerto Ricans could be amazing. You know, maybe, these unresolved questions do not matter, but if you are like me, moving to Puerto Rico because of a favorable tax rate, great schools and the same legal protections afforded to any other American, frankly it still is not enough. You would have to be convinced that Puerto Rico has a future. Who wants to move to a place filled with despair, resentment and hostility? I don’t live in a bubble, so that stuff has an impact on me—I walk the dog at night, I go out for coffee. If I am constantly bombarded by negativity, I will feel uncomfortable and I will go somewhere else. As a businessowner, however, I am guided by an unwavering belief—that every problem has a solution. And when I apply that same logic to Puerto Rico and look at the underlying trends guiding the island’s future—it is clear that Puerto Rico will emerge from this crisis. It will emerge not because it deserves to—nobody deserves anything in life—or because Washington will write some big fat check. It will emerge because of overlooked fundamentals—fundamentals that go straight to the very nexus of the transition from an old economy to one grounded in service and knowledge. And you know, I guess I would be truly worried about Puerto

Rico if I really thought the island had tried everything and nothing worked. Puerto Rico has not even scratched the surface of what is possible. This is not about austerity nor is it about a bailout. Those are false choices presented by disingenuous actors. A vast majority of the island’s food is brought in by ships from Jacksonville, Fla., despite some of the most fertile soil and abundant precipitation around—the problem is not the natural resources or the people. I mean I have hundreds of employees here and they work hard, are solutions-oriented and are interested in lifting the island. The central gap has been a lack of vision, the creation of a permanent bureaucratic class, and an unwillingness to hold people accountable, measure results—fortunately, we have seen all those problems before—just ask Rudy Giuliani and Mike Bloomberg—all those problems have simple solutions. So let’s focus on those signs that give me such confidence. I will begin with the 20/22 investors. The very fact there are more than a thousand of us here is the best validation that the program works— that Puerto Rico works. It is a huge force pushing the economy and, in many ways, we have become our own self-fulfilling prophecy. —Nicholas Prouty is the founder & CEO of Putnam Bridge


| Thursday, MARCH 31, 2016


Organizations aimed at spurring startups to new heights are popping up everywhere

Accelerators, Incubators Give Hope to Puerto Rico’s Entrepreneurs

SBTDC Puerto Rico Short for Small Business & Technology Development Center, the local chapter of the SBTDC is based at the Inter American University of Puerto Rico and works in close collaboration with the SBA. It forms part of the SBA’s Small Business Development Center network, which offers services in about 1,000 offices and 58 universities throughout the U.S. In Puerto Rico, the program is located at Inter American’s eight campuses and a specialized center in San Juan’s Hato Rey district.

MIT REAP Another initiative whose local chapter is closely related to Grupo Guayacán, the MIT Regional Entrepreneurship Acceleration Program (MIT REAP) is touted as a capstone global initiative at the Massachusetts Institute of Technology (MIT) that is designed to help regions accelerate economic growth and job creation through innovationdrive entrepreneurship. Partner regions form multidisciplinary teams and commit to a two-year learning engagement with MIT, during which they work with MIT faculty and the broader REAP community to implement a regional strategy for enhancing their respective ecosystems.

EnterPRize Another offshoot of Grupo Guayacán, EnterPRize has made waves for more than 10 years as an entrepreneurial platform that has granted access to equity-free seed capital for emerging entrepreneurs in Puerto Rico. Throughout the years, the organization has served more than 1,850 startups, awarding more than $1.5 million in seed capital and inkind services. The organization has strict requirements for potential firms, among them that the startups must incorporate global opportunities, markets and scalability as an integral part of their business models.

Dev Titans Billed as a community group in which members teach diverse subjects on technology, business and the internet, DevTitans was developed as an initiative to stimulate the establishment of more entrepreneurs and so-called “intraprenuers”— basically employees who behave as entrepreneurs within a large organization—in Puerto Rico. The group was formed with the intention of having monthly free trainings, networking and events that will foster their growth as a community. The Technology Professionals Association of Puerto Rico and Microsoft founded DevTitans in December 2013.

Several Organizations Aim to Boost Tech Startups on Island It’s often a long, hard road from a promising idea to a successful, scalable business enterprise, with plenty of pitfalls along the way; thankfully, business incubators and accelerators can make the journey a little easier to carry out. Just as their names imply, incubators help startups and early-stage enterprises, while accelerators take slightly more mature companies and try to give them a much-needed growth spurt. Both types of organizations mostly achieve this by providing training seminars, giving access to valuable industry contacts and granting seed money, among

other initiatives. (We should mention a third type of organization along these lines, those being co-working spaces, with places like Piloto 151 in Old San Juan and Engine 4 in Bayamón becoming key collaborative centers among the island’s burgeoning startup community). Organizations of this kind have gained a particular relevance in Puerto Rico, especially with regard to its ongoing economic crisis. In a push to diversify the island’s economy away from the old standbys of manufacturing and tourism, various incubators and accelerators have focused on innovation-driven enterprises that focus primarily on technology.

In fact, high-tech initiatives have almost become synonymous with the startup concept, which by definition embraces new ideas and processes. And while U.S. federal government agencies, such as the Small Business Administration (SBA), usually cast a wider net when it comes to supporting small and midsize businesses, plenty of other accelerators and incubators focus more on technologically inclined startups that hold promise in an ever-changing business landscape. The following is but a sample of the various incubator and accelerator programs based in Puerto Rico that are paving the way to bring about the next big economic driver on the island.

Parallel 18 This Puerto Rico government-funded tech-startup accelerator took a page from the highly successful Start-Up Chile program, to the point where it hired its former director, Sebastián Vidal, to head the new endeavor. The accelerator recently selected 38 startups in Puerto Rico, Latin America and Europe from 415 applicants. Starting April 14, the chosen firms will undergo a five-month acceleration program, which includes $40,000 in seed money for each startup that comes from a $2 million government fund. Another thing that sets Parallel 18 apart is that it does not focus solely on homegrown companies, but also wants to bring outside companies into the local ecosystem.

GVA (Guayacán Venture Accelerator) One of the many offshoots of private sector-driven nonprofit Grupo Guayacán Inc., GVA has focused on already-established companies since its launch in 2010. The program guides companies to critically evaluate their business models, incorporate strategies for rapid growth and determine the type of resources needed to execute their strategies. With more than 62 alumni companies to date, the program offers a rigorous advanced executive-education curriculum offered by top-level academics and professionals.

Founder Institute Puerto Rico Founded in 2009 in Palo Alto, Calif., as a response to the 2008 worldwide financial crisis, this incubator has created upwards of 1,200 companies, most of which remain operational, in its 80-plus chapters around the world. The local San Juan chapter was established in late 2012 and has had a busy agenda, helping launch more than a dozen high potential and growth entrepreneurs. Sofía Stolberg, CEO of Piloto 151, is co-director of Founder Institute Puerto Rico and all events take place at its coworking space.




Thursday, MARCH 31, 2016 |

Females in Puerto Rico buy more chocolates than males


Chocolates & Candy: Feeling the Love Since Valentine’s Day

Snickers, Hershey’s Milk Chocolate Most-Bought Brands in Puerto Rico BY ROSARIO FAJARDO

Chocolates and candy are a staple of any major holiday, but it is no secret Valentine’s Day is the holiday when chocolates and candy are indispensable. With that in mind, a purchase increase for chocolates and candy is to be expected during the month of February, but this year’s increase has carried on into the month of March, as 21% of people interviewed said they have purchased chocolates or candy during the “past 24 hours,” which is similar to the 22% purchase incidence for February, according to this week’s Gaither International survey.

This continuing trend could be attributed to the Easter holiday celebrations that follow soon after Valentine’s Day, indicated Melanie Dederick, a client service associate at Gaither International. During the month of February, the purchasing incidence has experienced a 4% increase since the beginning of the year (from 18% to 22%). February 2016 also saw a 2% increase compared with that of February 2014, when the incidence was reported at 20%. When asked whether they have seen advertisements for chocolates and/or candy during the past three months, 48% of respondents said they recall having seen an ad for these products. Inquiring further, the top-five products they recall

having seen an ad for were: Snickers (24%), Hershey’s Kisses (21%), Dove chocolates (17%), Mon Cheri (11%) and Twix (10%). In general, 52% of people interviewed said they have not consumed chocolate products during the past week, but among those who have consumed these products, most (38%) consume one to two chocolate bars, at most. Among genders, the top brands purchased were Snickers with a purchase incidence of 20% among males and Hershey’s milk chocolate for females with 25%. “In terms of overall purchasing incidence among genders, females seem to be purchasing more chocolate than males with 60% of them saying they bought a chocolate or candy

product during the past 24 hours,” Dederick said. Among the different age groups, the segment that mostly purchases these products is that of local residents ages 35 to 54 with a 31% purchasing incidence. The preferred candy or chocolate bars among the different age segments are: Hershey’s milk chocolate among those ages 12 to 34, Snickers among those ages 35 to 54 and Hershey’s Kisses among those ages 55 and older. “It remains to be seen whether this category will keep a steady growth during the rest of the year

or if it will remain stagnant until the Fall season, when Halloween approaches and sales are expected to increase again,” Dederick said. The results are from Gaither International’s Media Brand Profiles tracking survey, which interviews more than 80 people daily from among a representative sample of Puerto Rico’s population 12 years and older. Polling is conducted by Gaither International and the results are reported exclusively by Caribbean Business.


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For Bernier, a Tough, Long Road to La Fortaleza not pay, but we would postpone payment because the government does not have the resources,” he said in an interview with Caribbean Business. Bernier added that he does not support a federal fiscal-control board that would take over many of Puerto Rico’s affairs, such as managing the budget and the functions of the Legislature. “If that board violates our constitutional order and interferes with our democratic process, I am against it. If they [Congress]want to help… the focus has to be on a board similar to the one U.S. Sen. Bob Menéndez [D-N.J.] [proposes], which leaves the Puerto Rican constitutional order in the hands of the Puerto Rico government

and leaves fiscal issues in Puerto Rican hands. If they are not going to approve Menéndez’s proposal, something similar should be approved,” Bernier said. Regarding the development of his campaign, Bernier said it is “very intense because I have to do in less than a year, what other candidates have had three years to do.” He said that besides campaign tasks, his other responsibilities include his role as PDP president, handling the party’s electoral and political restructuring in the face of the November general elections, addressing all that is related to finances “and gearing up the party to win the elections.” With a lot of enthusiasm in his voice, he said that everything

indicates that he will have the support of the people in the next general elections, “but it is a process that we cannot stop, it is going to require all the commitment and all the effort of the different sectors [of Puerto Rico] to do things in a different way.” Bernier said that his experience meeting with people on the campaign trail has been a good one in which “beyond the PDP, I have been received with a lot of respect, a lot of affection and trust. “I have not had to adjust my way of being. On the contrary, I am still the same, communicating in a simple and direct manner with people. I have dedicated all my life to public service, beyond political parties,” he added.

David Bernier, gubernatorial candidate for the Popular Democratic Party BY ISMAEL TORRES

David Bernier, the gubernatorial candidate for the Popular Democratic Party (PDP), began his campaign just a few months ago, more than three years after his main opponents from the New Progressive Party, Ricardo Rosselló and Pedro Pierluisi had begun theirs. At the same time, Bernier, who is behind the two NPP gubernatorial candidates in most polls, is seen by many as carrying the heavy burden of Gov. Alejandro García Padilla’s performance and the much-questioned management of Puerto Rico’s $70 billion public debt. Even though Bernier tells people during his campaign stops throughout Puerto Rico that the public debt is the result of years of an “irresponsible” political class that did not know how to adequately deal with Puerto Rico’s top priorities, there is no denying that as the former secretary of State, he was second in

command in García Padilla’s administration. “I tell people that we are in this crisis because decades ago, the political class did not come to an agreement and caused damage [to Puerto Rico]… Afterwards there was a lack of planning with our credit and now we are facing this crisis with a lot of difficulty because we do not make common cause to address those problems,” he said. That line, which Bernier often repeats to voters who hear him, is accompanied by another regarding the non-payment of the public debt and the benefits for Puerto Rico if creditors would agree to a moratorium so the government can begin to pay off debt in five years, after just paying interests on that debt. “The non-payment of the debt will be inevitable if the issue is not addressed in a diligent manner in the U.S. Congress in the coming weeks. This is why I believe a moratorium on the debt payment is necessary. It is not that we would

“If that board violates our constitutional order and interferes with our democratic process, I am against it. If they [Congress]want to help… the focus has to be on a board similar to the one U.S. Sen. Bob Menéndez [D-N.J.] [proposes].



Thursday, MARCH 31, 2016 |


As a politician, many people see Pesquera as conciliatory

Pesquera Bets on His Experience, Relationship With Federal Government BY ISmAEL TORRES

Engineer Carlos Ignacio Pesquera, who was the New Progressive Party’s candidate for governor in the 2000 general elections, is confident he will secure his party’s candidacy for resident commission in the June 5 primaries because of his experience in efforts related to important infrastructure projects for Puerto Rico. He said the experience he acquired working with the administration of then-Gov. Pedro Rosselló as the main mover of infrastructure projects, along with his work with federal agencies and Congress to identify funds to implement them, gives him a great lead over his opponent, Rep. Jenniffer González, in the primaries. Still, as happens during many local primaries, the main issues being discussed are being overshadowed by such arguments as who best dominates the English language and the importance of being able to speak the language well to deal with federal government functionaries at executive and legislative levels. Experience Pesquera states that his performance at the federal level—working with such federally funded projects as the Tren Urbano, the roads and highways systems, improvements to the electric-power system, construction and improvements to treatment plants of the P.R. Aqueduct & Sewer Authority and the so-called Superaqueduct, or “Supertubo,” which brought drinkable water from the island’s northern region to the San Juanmetropolitan area—are his presentation card as resident commissioner. “During those years, from 1993 to 2000, I was able to work

directly with Congress through such committees as transportation and infrastructure, which allowed me to experience the complexity of those processes and ways to achieve positive results for Puerto Rico,” Pesquera said. He pointed out that one of the problems he faced at a federal level, both in the House of Representatives and with executive agencies, was distrust toward Puerto Rico for its noncompliance with agreements. “One of the problems I confronted was the lack of credibility we had before the federal government. Promises were made but not followed through,” said Pesquera, talking about his experiences with fed-

identify—not just on the congressional level but also from executive agencies—funds that can be assigned to Puerto Rico for its economic development. Pesquera said the financial crisis seriously affects maintenance of the infrastructure, which is of vital importance for economic development because, if roads, the water and electric systems as well as buildings are not maintained, it makes it harder, for example, to attract more tourism to Puerto Rico. By the same token, it would make it difficult to get new companies to set up operations on the island if the infrastructure is not properly maintained. As a politician, many people see

“The key here is to treat functionaries on equal terms, without begging, and with a dignified attitude. If you do that, there is respect and good results,” he said. eral entities when he went in search of funds to carry out infrastructure projects during that period. “The key here is to treat functionaries on equal terms, without begging, and with a dignified attitude. If you do that, there is respect and good results,” he said. From 1993 to 2000, he said a lot of debt was issued but most went to necessary infrastructure for Puerto Rico’s economic development, such as projects to improve the transportation, electricity, and drinking water systems. He noted that his experience with the federal government puts him in a good position to aspire for the position of resident commissioner, whose main function is to

Pesquera as conciliatory, someone who avoids confrontation, a feature for which he was criticized when he ran unsuccessfully against Sila María Calderón, of the Popular Democratic Party, for the governor’s seat, and who capitalized on Pesquera’s so-called passive attitude in her favor. But at the time, as seems to be the case today, his academic success, professional performance and so-called “sexy” looks were not enough for him to prevail. Pesquera graduated with a degree in engineering from University of Puerto Rico’s Mayagüez campus, and has master’s and doctoral degrees from Cornell University. His specialty is structural engineering.

Carlos Ignacio Pesquera, New Progressive Party candidate for resident commissioner

He has been active in academia, in industry and politics, where he has been able to experience the bitter taste of those who treated him with contempt and even ill will, in most cases from his own party. For the NPP’s June 5 primaries, Pesquera is competing to be the candidate for resident

commissioner as the running mate of current Resident Commissioner Pedro Pierluisi, who is aspiring to be selected as the gubernatorial candidate against Ricardo Rosselló, whose running mate to be the resident commissioner candidate is Jenniffer González, former P.R. speaker of the House.

| Thursday, MARCH 31, 2016




Cruz supporters moving quickly to grab nomination

Second Round of Voting in Republican National Convention Could Stop Trump

Puerto Rico Delegates Will Not Support Trump BY ISMAEL TORRES

The 18 pending state primaries leading up to the Republican National Convention, which will take place July 18-21 in Cleveland, opens up the possibility that billionaire Donald Trump may not receive the minimum number of delegates required to be confirmed as the GOP’s candidate for the presidency. With this scenario in mind, supporters of Texas Sen. Ted Cruz are moving fast to get the support of delegates who would be free to vote, as long as there is no clear favorite in the first round of voting at the convention. Up to now, former Florida Gov. Jeb Bush, surgeon Ben Carson and Florida Sen. Marco Rubio have dropped out of the race. Still in the running are Trump, who leads the field by a wide margin with 739 delegates, Cruz (465 delegates) and Ohio Gov. John Kasich (143 delegates). A candidate needs 1,237 delegates to win the Republican nomination. While Kasich’s delegate count is low, if he reaches the convention, he could receive wide support from non-committed delegates if Trump does not secure the delegates needed to be nominated in the first round of voting. However, Cruz supporters are doing everything they can to prevent delegates who are not committed to

lean towards Kasich, although polls show that the Ohio governor is the favorite among non-committed delegates, in particular those who supported Rubio. Edwin Mundo, electoral commissioner of the Republican Party in Puerto Rico, said the island’s 23 delegates are waiting for the party’s national convention in Cleveland to see what happens. After the first round of voting, they will decide which candidate they will support. “We are going to wait for the National Convention in July and see which position is most favorable for the New Progressive Party,” he said to Caribbean Business. While not providing details, he added, “What I can assure you is that Puerto Rico will not vote for Donald Trump.” Mundo said Kasich is being evaluated, but it has not been determined whether the Ohio governor will still be running when the National Convention takes place. Between now and the

Republican National Convention in July, 18 primaries remain, beginning with North Dakota on April 1 with 28 delegates at stake, followed by Wisconsin on April 5 with 96 delegates at stake; New York on April 19 with 291 delegates; as well as Delaware with 36 delegates; Maryland with 118 delegates; Pennsylvania with 210 delegates; Rhode Island with 33 delegates; and Connecticut with 70 delegates. On May 3, Indiana will hold its primary with 92 delegates at stake; and on May 10, there will be primaries in Nebraska with 36 delegates and West Virginia with 34 delegates. Oregon will hold its primaries on May 17 with 73 delegates at stake, followed by Washington on May 24 with 44 delegates. The primary cycle comes to a close on June 7 with primaries in California with 546 delegates at stake; Montana with 27 delegates; New Jersey with 142 delegates; New Mexico with 43 delegates; and South Dakota with 25 delegates.

Puerto Rico bucks the trend 28

Thursday, MARCH 31, 2016 |



Latin America, Caribbean Debt Decreases, Revenues Stable BY JUAN A. HERNÁNDEZ

Debt in Latin American and Caribbean countries has kept decreasing in recent years, while tax revenues in the region are relatively stable and have only experienced a nominal increase, according to the Revenue Statistics in Latin America & the Caribbean, which was recently published by the Organization for Economic Cooperation & Development (OECD). The average tax-to-gross domestic product (GDP) ratio for Latin American and the Caribbean countries rose from 21.5% in 2013 to 21.7% in 2014, compared with 21.4% in 2012 and 20.8% in 2011. Although tax-to-GDP ratios are increasing across both regions, the report highlights that the 21.7% average is still well below the corresponding 34.4% OECD average in 2014. While this has been happening, external debt has been significantly reduced in almost every country in the region, according to the 2015 Fiscal Panorama for Latin America & the Caribbean report published by the Economic Commission for

Latin America & the Caribbean (ECLAC). “Between 2000 and 2014, 11 of the 19 countries in Latin America managed to lower the ratio between public debt and the GDP. In only five countries (Chile, El Salvador, Mexico, the Dominican Republic and Uruguay) did the ratio increase, while in the remaining three (Costa Rica, Guatemala and Venezuela), the ratio kept constant,” the report stated. What is the relevance of a country’s debt-to-GDP ratio? “By comparing what a country owes to what it produces, the debt-to-GDP ratio indicates the country’s ability to pay back its debt. Often expressed as a percentage, the ratio can be interpreted as the number of years needed to pay back debt if GDP is dedicated entirely to debt repayment,” according to the website Nevertheless, there are significant variations in the level of indebtedness from one Latin American country to another. In Brazil, for instance—the country with the highest ratio—public debt came to represent 62% of its GDP. The second country with the highest debt

ratio was El Salvador with 46%. According to ECLAC, a moderate level of indebtedness for countries is defined as those in which public debt represents 36% to 46% of its GDP. In terms of their tax revenues, countries in Latin America have experienced but a minimal increase, if any, in this economic indicator. Only Costa Rica, Uruguay, Bolivia, Argentina and Brazil have registered tax revenues above the Latin American average, as a percentage of their respective 2013 GDPs. The ECLAC report stated it is possible to estimate that countries with higher tax revenue ratios over their GDPs are also the countries with higher per capita incomes. But after comparing 2014 per capita incomes for several countries in the region, that assertion could not be corroborated because at least two countries with higher per capita incomes than that of Argentina have lower tax revenue/GDP ratios. More specifically, Uruguay and Chile, with a per capita of $16,199 and $14,447, respectively, have total tax revenues as a percentage of their GDP at 27% and 19.8%, respectively, for that same year.

Mauricio Macri, president of Argentina

On the other hand, Brazil, which has a per capita income lower than Argentina’s, has a debt-to-GDP ratio of 33.4%, or 1.2% higher. What is happening in the Caribbean? In most of the Caribbean countries, the debt-to-GDP ratio stayed over 70%, except for the Bahamas, Guyana and Trinidad & Tobago, all of which had ratios on or around 60%. This indicates that these countries have a high level of indebtedness. The Dominican Republic and Jamaica had debt-to-GDP ratios of 14.1% and 24.2% respectively. Both countries are well below the OECD’s average ratio. Puerto Rico, Cuba and Haiti were not included in the report. However, Puerto Rico’s economy seems to follow a different drumbeat. For fiscal 2014-2015, Puerto Rico’s tax revenues going into its general fund coffers were $7.335 billion, an increase of a little over $135 million compared with fiscal 2013-2014. The general fund receives revenues from personal, property, motor vehicle and corporate income taxes; the sales & use tax (IVU by its Spanish acronym), and tobacco and spirits taxes, among others. Among local taxes that do not entirely go into the fund include the 2.75% portion of the IVU that goes to the Sales Tax Financing Corp. (Cofina by its Spanish acronym) and the

petroleum products tax (a.k.a. la crudita), which goes to the Infrastructure Financing Authority (AFI by its Spanish acronym). Total service to the debt for fiscal 2015-2016 would be $4.482 billion, but only $1.2 billion will come from Puerto Rico’s general fund, according to Government Development Bank reports. The balance is to be paid indirectly from revenues directed to other funds and entities such as Cofina and AFI. Puerto Rico’s debt-to-GNP (Puerto Rico uses gross national product instead of GDP) was estimated at 150% in 2007 according to government figures. But that figure includes the debt of public corporations (such as Prepa and Prasa), which is not included in international debt statistics, thus giving the impression the island’s debt is greater when compared to that of some other countries. So, while revenues have stayed more or less the same, Latin American countries have managed to steadily lower their debt over the past 16 years. But, even though Puerto Rico has followed the Latin American trend of nominal revenue increases, its debt has skyrocketed, leading to a 68% debt-to-GNP ratio, as of 2014, according to the GDB, making the island one of the most indebted jurisdictions in terms of percentages in the world. —Editor Rosario Fajardo contributed to this story.


| Thursday, MARCH 31, 2016

federal affairs

Some of the legal consequences of Congress’ proposed financial control board

Fiscal Control Board Would Leave P.R. Without Sovereign Immunity BY EVA LLORÉNS VÉLEZ

If Congress were to approve a fiscal control board for Puerto Rico with broad powers, it likely would not generate the certainty that creditors want but rather years of litigation, constitutional ambiguity and a negative impact on debt obligations, a legal expert said. A significant portion of the debt consists of general obligations secured by the revenues of Puerto Rico or sovereign debt that is guaranteed by the P.R. Constitution. The U.S. assumption of the sovereign powers of self-governance over Puerto Rico would expose the U.S. government to claims against it. “One potential consequence of a congressional takeover of Puerto Rico, either by suspension of the duly elected officials under the Puerto Rican Constitution or by the imposition of a fiscal oversight board that would displace local authority, would be a breach of the sovereign obligation of Puerto Rico over its debt. This could have legal consequences of unknown dimensions,” Samuel Issacharoff, professor at New York University School of Law, said in a written analysis. Republicans propose control board for P.R. U.S. House Natural Resources Committee draft legislation from Republicans for a control board in Puerto Rico surfaced in the press and was formally introduced this week. The committee dubbed the legislation the Puerto Rico Oversight, Management & Economic Stability Act, or Promesa by its acronym. The bill contemplates the creation of a strong, five-member fiscal oversight board appointed by

the president with wide-ranging authority that experts say echoes the one created in 1995 for the District of Columbia. The board is empowered to create a debt-service reserve fund that would be used to secure future debt issuance. While the debt will not be guaranteed by the U.S. government, it will be guaranteed by the board and will carry the security interest that the board deems relevant. Any borrowing incurred under the board’s supervision must be approved by the board and must be consistent with the board’s mission and objectives for the local budget. If the board does not approve debt issuance, the commonwealth will be required to revise its budget to reduce expenditures. Board would approve contracts over $1 million The legislation does not give priority to the payment of pensions and would allow for benefit reductions in either core or ancillary benefits. It would require all contracts in excess of $1 million to be approved by the Puerto Rico Legislature and, by default, the board. The legislation also creates a so-called Revitalization Coordinator with the ability to approve or disapprove contracts that the governor’s office may seek to sign, subject to the board’s ultimate authority. As proposed, the bill would also create a Chief Management Officer in charge of the local government’s day-to-day efficiency. The board would employ the officer along with an Executive Director to help obtain the services Puerto Rico needs to appropriately deal with its government operations. These officials are empowered to seek aid from federal agencies

“[The Bill] would hurt creditors of all sorts since the value of the bonds seriously diminishes…. It would expose Puerto Rico to considerable liability upfront.” —Samuel Issacharoff, law professor

for everything from data collection to personnel management to tax collection; to overrule the management decisions of local Puerto Rico officials; to employ consultants; and to restructure the operations of the local government. Board’s orders legally enforced Any officer of the local government who refuses to obey the board’s orders would be subjected to criminal penalties, including jail time and fines. The government would be required to establish reporting requirements, including independent projections for cash flow, tax revenue, and expenditures that are prepared in accordance with generally accepted principles. The commonwealth will receive

some minimal relief from the minimum wage under a provision that allows employers to pay the reduced federal wage of $4.25 an hour to employees under age 25 for the first 90 days of their employment. The legislation also provides for some economic incentives, especially related to infrastructure development but not the earnedincome tax credit or the child tax credit. No Chapter 9 While the legislation excludes Puerto Rico from Chapter 9 of the Federal Bankruptcy Code, it would create an independent debtrestructuring mechanism under the board’s supervision. The draft bill requires a budget plan and financial data before bankruptcy can begin,

and it orders the board to negotiate with stakeholders before entering into any kind of forced restructuring process. The bill also provides for stays on creditors’ claims. Gov. Alejandro García Padilla criticized the fact that the island would have to wait for the proposed board’s determination to make use of the restructuring. “As proposed, it is dishonorable and degrading. At the expense of more and greater sacrifices by Puerto Ricans—to the benefit of our creditors—access to the necessary restructuring mechanism would be achieved. That condition is not acceptable,” García Padilla said. Law Prof. Issacharoff said two consequences of the bill will follow. The first is that the federal government will find itself liable for the debt and will render it worthless by stripping the legal guarantees from the debt. Second, he said the U.S. takeover of political responsibility for Puerto Rico could compromise the island’s ability as a debtor to claim sovereign immunity because congressional abrogation of Puerto Rico’s self-governance implicates a repudiation of Puerto Rico sovereignty. “This would immediately hurt creditors of all sorts since the value of the bonds seriously diminishes…. It would expose Puerto Rico to considerable liability upfront,” he said.



Thursday, MARCH 31, 2016 |


‘The U.S. will always take its citizens back, but other countries will not, necessarily.’

The Early Birds get Their Passports on Time


Passport Services of the U.S. Department of State is getting ready for what the office expects will be an avalanche of renewals next year, the 10th anniversary of the Western Hemisphere Travel Initiative (WHTI), which requires people traveling to the U.S. from areas within the Western Hemisphere to show a valid passport or other approved secure identification document. After the Sept. 11, 2001 attack on the U.S., both the departments of State and Homeland Security embarked on the design of a procedure that would strengthen the country’s border security and, at the same time, facilitate entry of U.S. citizens and foreign visitors. The WHTI is the result of the Intelligence Reform & Terrorism Prevention Act of 2004. “The big issue that we are attending to right now is the 10-year anniversary of our Western Hemisphere Travel Initiative. In 2007, we issued about 18.6 million passports…and we went underwater. It was a very long, difficult spring and summer in which we simply could not get people their passports in a timely manner,” said Brenda Sprague, deputy assistant secretary for Passport Services.

Because of the huge number of passports expiring in 2016 and 2017, the agency is advising the public to look at their passport’s expiration date and, if they are within six to nine months of the date, it is time to get a new one. The situation with the number of renewals could get even more complicated now that the European Union and Mexico are enforcing a requirement that people must have at least six month’s validity on their passports. The U.S. also enforces an identical requirement. “The whole point of the six-month validity is that we want to make sure people leave when their visit is over. The United States will always take its citizens back, but other countries will not, necessarily. So, if you don’t have your valid passport, they can deny your return, and we don’t want to be faced with that…. Now, other countries are following this example,” Sprague said. There have been a significant number of cases where people go to the airport thinking, ‘I have six months on my passport,’ and the airline has turned them away because they would have been turned away when they got to France or Germany or Mexico. To the American traveling public, this is a big shock, according to Sprague. “For the past eight years, we have been planning for the 10th

There are people who go to the airport thinking ‘I have six months on my passport’ and the airline turns them away because they would have been turned away when they reached their destination. year, which is the renewal period, that doesn’t happen again. So we have been pushing very hard to encourage people to apply early,” Sprague said. The agency does not have statistics regarding the number of passengers being turned away because their passports expired within six months of the date of their travel. Anecdotally, at the agency’s offices in New York, Atlanta and Washington, for example, “a disproportionate number of our walk-ins” are people who thought their documents were fine but they were not. This situation has bumped the agency’s immediate urgent stream of travelers to the passport agencies, mostly on the East Coast and along the country’s southern border, where there are mostly Europeans and Mexicans, respectively.

How long does it take to issue a passport? For urgent renewal cases, and if there are no outstanding warrants or child support holds, and the workload at the specific office is not too heavy, the process is rather quick. According to the deputy assistant secretary, a passport could be ready “sometimes within the hour,” but in general the process takes two or three days, if the person visits an office. Expedited service through the mail is three weeks, whereas for regular service it takes six weeks. “We try real hard to beat that. But we want people to give themselves plenty of time because about 20% of applications have something wrong with them, mostly with the pictures, but it could be the identity document is not what we need,

you don’t really have a certified birth certificate, perhaps you had reported a passport lost or stolen, and you didn’t mention that in your application…. All those things can create a problem for you and would slow the process down. But most of the time, it is the picture,” Sprague said. Getting a passport is a costly affair. Anyone applying for a passport for the first time will have to shed out $135 plus the cost of the photograph and the official copies of the supporting documents. And that is if he or she is not in a hurry. Otherwise it will cost an extra $60 for expedited service. “It is a costly activity—getting a passport—and for that reason we invented the passport card, particularly for people of modest needs who live along the northern and southern borders and cross the land borders all the time, dealing only with Canadian or Mexican officials as well as our own CBP [Customs & Border Protection]…. For people on the border, who are going across with their lunch pail or their school bag, why can’t we give them the passport card? We invented the passport card for that purpose and it’s cheaper,” Sprague said. The card has a total cost of $55 ($25 for the application plus $35 for card), but it is only good for crossing land boarders or for sea voyages within the Caribbean. This means a U.S. citizen traveling from Puerto Rico or any of the U.S. Virgin Islands to the Dominican Republic, for example, can use the passport card as an identification document. On the other hand, Sprague reiterated that U.S. citizens do not need a passport to travel to Puerto Rico from the continental U.S. “I believe every American would be wise to document himself or herself with a U.S. passport, whether it is a passport book or a passport card,” she argued, emphasizing three main reasons: a) you want to lock in your identity; b) you never know when you will want to travel; and c) a passport is a form of identification with which no one can quarrel.

Special Feature

March 31, 2016 Pages 31-34




Thursday, march 31, 2016

Female Presence in Workforce Making Waves BY LUIS VALLDEJULI

If you are a woman planning to join, stay in or return to the workforce over the next five years, it is important to have some critical information at hand to help plan and develop your strategy. Although advances have been made in women’s workforce issues, obstacles still remain that must be tackled, and not just by women. First, here is the good news. Many more companies are tapping into the female talent pool because this is increasingly regarded as a prominent and promising area for workforce planning. Women are a rising labor-force group and their economic power as consumers is evident in many industries. Their large participation rate as both laborers and consumers makes them the perfect choice for hiring in order to reach the target markets that will buy what is being sold. Media scrutiny, public opinion and government regulations have also helped increase support for women’s growing influence in the workforce. For example, the

media has played a big role in promoting the female workforce, which can be seen in advertising campaigns and movies. There no longer is a “typical housewife,” who stays at home taking care of the children and the house. These women are not just clients, but are also professionals who know their contemporaries very well and how to approach them. Even companies that used to be predominantly male-dominated are now opening up to the idea that by bringing more women into the workspace broadens their talent pool. In a way, these companies are addressing entirely new markets through their female employees. Innovation and decision-making are therefore enhanced, as new voices are being heard and interpreted. Now, here is the bad news. Even with the female workforce’s fast growth, the corporate ladder to the top often remains difficult to climb. In many industries, women reach only as far as junior executive positions. Although there are currently fields—healthcare, media and

entertainment—where women predominant in number, it remains clear that their salaries are not the same as their male counterparts. Wage gaps persist across all industries, even in those where female participation is comparatively high. The reason for this wage imbalance can be associated mostly with the traditional treatment of women as the so-called “weaker sex.” There often is an unconscious bias among many male managers who assume women work half as hard as men in the workspace because they need to go home and devote the other half of their energy and time to home life and children. It is taken for granted that many women find it difficult to balance their personal lives with their work lives because they are “weaker” than men. The response to this bad news may rely on technology. The tools of new technological advances could work in favor of women in the short term: As household work is further automated, it may relieve some of the dual burdens women face in caregiving and breadwinning, while at the

same time, changes in the nature of work could make it more possible for all parents to better combine work and family responsibilities. As more companies realize the importance of growing the participation of women in their managerial ranks, new business models need to be designed and put into effect to reflect these changes. A lack of growth in this area ultimately becomes a business issue, not just for women alone, but also for companies and economies. Without new markets and a fresh work pool, industries become stagnant and economies fail. Gender equality, by itself is no longer the only issue. The advantages of increasing females’ presence in the workforce by now should be understood by industry. The advances in technology present an unprecedented opportunity to make women’s equal participation in the workplace more accessible. All the elements of change are here. All that is needed is for government and traditionalist employers to catch up with the times. n

Thursday, march 31, 2016



Servintegra’s Ivette Luciano Turns Failure Into Opportunity

Valerie Sáez Turns a Deaf Ear to Negative Thoughts



Following an unexpected job termination, Ivette Luciano, president & proprietor of logistics company Servintegra, learned quickly that one should not put all their eggs in the same basket. Inspired by her desire to provide for her child, Luciano teamed up with her family and started a string of successful businesses that are the livelihood of a group of hardworking women like herself. Luciano earned a bachelor’s degree in communications and gave the ad industry a shot, but following an internship decided it was not for her. She went on to pursue a master’s degree in international marketing with a concentration in logistics, and that’s where she found the niche that led her on the path to head a logistics and transportation company that moved more than 800,000 cases in 2015 and growing. “I’ve been close to the logistics business since I was a child,” said Luciano, whose father was an independent truck driver who would take her along on his delivery routes. “That’s where I think I get it; it’s in my veins.” As a requisite to complete her master’s degree, Luciano turned in a thesis project where she developed a logistics process to move perishable agricultural products grown in Puerto Rico. That idea sat in the back of her mind for the next 13 years, during which she managed complex logistics for a Fortune 100 company that moved air and sea cargo from P.R. to the U.S. and Canada. Buttressed by support from her family along with her sister, Luciano took a chance to start a family business, and founded Egg Market. “My sister told us she wanted to have a job where no one could fire her,” Luciano recalled. So they pulled resources and called upon an old contact of her father’s, who sold them their first

After earning a bachelor’s degree in psychology from Universidad Católica de Puerto Rico in Ponce, Valerie Sáez Irizarry wound up filling the position left vacant by her father at MassMutual Financial Group Puerto Rico. For 16 years, Sáez Irizarry has been meeting with families, discussing their financial goals and designing a path for them toward stability and freedom. She has also been very busy becoming a top financial adviser on whom clients can rely. Faithful, loyal and honest to the bone, Sáez Irizarry is very willing to share her experiences and knowledge. In fact, she takes great joy in helping others and welcomes ideas from her co-workers and clients. From her superiors, she receives much positive reinforcement and counsel. But it is her clients who give her true joy. “Helping clients grow financially, maximizing their incomes and achieving their goals, gives me a wonderful feeling of fulfillment,” Sáez Irizarry said. Although she presents herself as a very gentle professional, her determination is fierce and her mind focused, positive and disciplined. The lioness inside her emerges with the strength that comes from her father, who instilled her with a sense of responsibility toward clients and sincerity for herself. Most of all, he taught her to never give up. “There’s always room for improvement and growth in any portfolio. Clients seek that help to work with them as a team and reach goals together,” Sáez Irizarry said. There are three passions in Sáez Irizarry’s life: her daughters, running and chocolate. As a rule, she sets time every day to spend with her daughters, who are 3 and 7, respectively. While chocolate is a guilty pleasure not to be enjoyed often, running is a passion Sáez Irizarry buries herself in, not just for exercise, but also to escape time and concentrate on ideas and plans. As for her goals, Sáez Irizarry is clearly focused on expanding within the industry,

Ivette Luciano, president & proprietor of logistics company Servintegra

shipment of fresh eggs. “My sister took on the administration, I handled the marketing and logistics, and my father the purchasing. We sold our first container of eggs within six hours,” she said. That is how Egg Market was founded in Caguas in 2010, and since then has grown into a leading importer and distributor of fresh, Grade A eggs. “My father, who knows the food industry well, told us to pursue a food-related business because it is impervious to economic downturns; everyone has to eat,” she explained. A few months into the new venture, Luciano began toying with the idea of diversifying. She looked for an alliance with another entrepreneur to establish Servintegra. Luciano is eager to see her business grow, especially for the sake of the women she has been able to recruit as part of her team. “My greatest motivation is the people who work with us. Our core team comprises fellow single mothers, and we have created such a bond that we all feel responsible for making this business work, for our children’s well-being. Witnessing these women transform their lives is an incredible feeling that I had never experienced before, and that is what keeps me going,” Luciano said. “That is why I encourage established and emerging businesses to consider us for their logistics needs, because I am certain they will benefit from the services we offer.” n


“Helping clients grow financially, maximizing their incomes and achieving their goals, gives me a wonderful feeling of fulfillment.” gathering new clients and portfolios, improving numbers year after year, and helping clients to grow financially. Caring jealously for clients has brought her to the Leaders Conference and helped her become one of the top performers at MassMutual. Her advice for other young professionals: Stay focused always; never listen to negative people; and, use courtesy and amiability, working 50-50 with clients will always bring positive outcomes. Going back to her psychology roots, Sáez Irizarry connects with clients and serves as a bridge between them and MassMutual to create growth and stability in every account. At the end of the day, it is this fulfillment, together with the peace of mind brought by the happy times shared with her daughters, that completes Sáez Irizarry’s life. If dreams of the future can be achieved through financial security, Sáez Irizarry is committed to being there, every step of the way, by her clients’ side. n


Thursday, march 31, 2016

WorldNet President: Teamwork Essential for Success BY MARIO BELAVAL DÍAZ



• Nueva propuesta de incentivos contributivos federales para la Manufactura • Presentación de los Pilares de Desarrollo Económico de la AIPR

• Tribunal Supremo - Alegato en caso de la quiebra criolla / Commonwealth of Puerto Rico v. Franklin California et al

• Proposed Overtime Rule: Pago de tiempo extra a empleados exentos • Diálogo e Interacción de Coalición del Sector Privado en Washington

• Junta de Revitalización, Reestructuración de la Deuda y Herramientas de Desarrollo Económico

• Perspectiva del Dept. Energía Federal con respecto al sistema energético de Puerto Rico

• Transformación del Sistema Eléctrico del País, piedra angular de la economía sustentable







7 8 7 . 6 4 1 . 4 4 5 5 | W W W. P R M A . C O M

As president of WorldNet Telecommunications, María de Los Angeles Virella helps lead a pioneering provider of the most-advanced telecommunications and cloud solutions in Puerto Rico, and for her, teamwork is an essential factor in the company’s success. “Teamwork is key to take a company to the levels and standards it sets for itself,” said Virella. “It seems a simple concept, but it is essential that each person understands the importance of his or her role as part of the team in order to achieve results.” While just a year in her position as president, Virella is no stranger to WorldNet, having been at the company for some 15 years. She began as a comptroller, then receiving more responsibilities as vice president of finance, followed by vice president of operations & information systems. Before joining WorldNet, Virella had worked in various fields and industries such as accounting, banking and distribution. David Bogaty, founder & CEO of WorldNet, called her for an interview. At the time, Bogaty was searching to create a workgroup to match the company’s fast growth and provide WorldNet with a more corporate structure. He recruited Virella to work in the areas related to finance. “When I started, I didn’t think or consider that I would reach a position such as president,” Virella said. “All I knew was I enjoyed, and enjoy, working as part of a team that works together and solves situations.” She said despite the tough economic climate of the past years, the telecommunication industry in Puerto Rico is solid and robust, providing jobs and investing in the economic progress of the island. “It is a very competitive business, in which we innovate and make technology help client companies reach their goals,” Virella said.

“Teamwork is key to take a company to the levels and standards it sets for itself.” —María de Los Angeles Virella

“I think we are in a constant evolutionary process, from being known as a telecom company with voice and data technology service, to a full solutions provider, with resources such as cloud and other products that help clients solve issues, mitigate risk and help grow their businesses. We want to make things easier for our clients through our solutions and through our success, having other potential clients consider us as an option.” Despite telecom being an industry with a heavy male presence, Virella said she has not felt discriminated against for being a woman. “If you have talent and passion for what you do, you earn the respect of your colleagues,” said Virella, who has a bachelor’s degree in accounting from the University of Puerto Rico, Río Piedras Campus. n

Big Business Profile: Security Special Feature March 31, 2016 Pages 35-40



Thursday, MARCH 31, 2016



PCI Continues to be a Top Source for Security Solutions BY CB STAFF

Since 1978, Professional Communications Inc. (PCI) has been widely recognized as a provider of cutting-edge security solutions for a number of industries. They include sound reinforcement and paging systems, fire alarms, industrial security systems, access control, nurse call and infantprotection systems and closedcircuit TV (CCTV). The company also provides various monitoring

services from its centralized station. “Clients can always rely on us to provide the most advanced and cost-effective solutions in the market,” said José R. Montes, president of Professional Communications Inc. This includes technology from well-known names such as Siemens, Sony, Rauland-Borg, Tyco (American Dynamics), Software House, Atlas Sound, TOA and Securitron. One of PCI’s top sellers is

New main office facilities in San Juan

Rauland-Borg’s Responder 5 communications system, which local healthcare facilities have found to be top-notch in improving their operations’ communications process and greatly enhances patient care. Montes said this comprehensive system is both integrated and easy to use, which facilitates calls between departments and staff—especially nurses. “Through Responder 5, a patient can directly call a nurse’s wireless phone or pager to request assistance,” he said. “If the nurse can’t immediately respond, the call is rerouted to the next appropriate caregiver so patient safety and care are ensured.” He noted that the technology gives patients added peace of mind, knowing that help is on the way. To further promote a quality-healing environment, the system has also been designed to be quiet, so patients are not disturbed. In addition, because Responder 5 is built to integrate with other hospital systems, this solution provides a number of other advantages as well. “For example, nurses can consult with physicians in real time without the delays that are often caused by hit-or-miss paging,” Montes said. “If a certain room needs to be readied for a patient’s post-surgery arrival, a staff member in the surgery area only has to push a button to notify environmental services or any other related department.”

Local healthcare clients taking advantage of this technology and other hightech systems supplied by PCI include Veterans Affairs Medical Center and Auxilio Mutuo, HIMA-Caguas, HIMA-San Pablo, P.R. Children’s, San Jorge Children’s and Doctors’ Center hospitals. In addition to Puerto Rico clients, PCI serves companies on the U.S. mainland as well as the British Virgin Islands and other regions in the Caribbean. Montes also pointed out that along with selling and installing systems such as Responder 5 and the many other security solutions the company offers, PCI also boasts a team of highly trained technicians whose primary goal is to ensure companies get the most from their systems. This includes personalized service and training on the various uses for each piece of technology installed. “Our goal is to make sure each system we install is customized in a way that meets each client’s particular needs,” he said. “That way, they will not only reduce overhead, but ensure they receive the safety and security they deserve.” n

Thursday, MARCH 31, 2016



Vigilantes Certified by P.R. Minority Supplier Development Council Edgar Pedrosa, president & COO of Vigilantes.


The Puerto Rico Minority Supplier Development Council (PRMSDC), the local affiliate of the National Minority Supplier Development Council (NMSDC), recently certified Vigilantes Inc., a local leader in the security industry, as a minority business enterprise. “This [certification] allows us the opportunity to continue expanding our client base, especially in the industrial-manufacturing segment, to which we have successfully dedicated our efforts and resources for the past 45 years,” said Edgar Pedrosa, president & COO of Vigilantes.

“This certification inspires us to continue basing our commitment to quality service and delivering responsive security solutions as the foundation for our continued growth.” The NMSDC and its affiliates throughout the U.S. work to bring its certified minority enterprises and corporate members together, thus representing more opportunities for business while helping members increase their supplier diversity. According to the organization’s website, the PRMSDC is one of 24 affiliate councils of the NMSDC, a nonprofit corporate-membership organization that advances business opportunities for its certified Asian, African/Black, Latino/Hispanic and Native American business enterprises, connecting them to its corporate members. One of the country’s leading corporate- membership organizations, the NMSDC was



chartered in 1972 to provide increased procurement and business opportunities for minority businesses of all sizes. The certification process is very rigorous and represents that a business complies with the strict parameters of NMSDC’s corporate members. Thus, this certification validates and reiterates the professionalism and thoroughness of Vigilantes’ operations and allows the company, alongside other local businesses, to take part in the supply chains of Puerto Rico’s multinational corporations. Vigilantes has an edge on the competition when it comes to providing security and protective services to large corporations, especially in Puerto Rico’s industrial-manufacturing sector, because throughout it 45 years of history, it has become a sort of “boutique” company, specializing in the needs of the security

segment. In fact, many Fortune 500 companies have chosen Vigilantes as their premier service provider to support their respective security programs. Pedrosa explained that with the evolution of Puerto Rico’s industrial-manufacturing sector into a highly important segment of the economy, the sector’s security and safety demands require the incorporation of our service divisions to provide a cost-effective level of protection. “Vigilantes delivers solutions to individual security and safety concerns in today’s ever-challenging business environments,” Pedrosa said, “from professional security officers performing access control and preventive patrols, to cargo and executive escorts and medical-emergency response, to the installation, maintenance and upgrades of access control, fire, intrusion and

surveillance systems, to specialized investigators and consulting staff addressing physical security, emergency management and action plans.” In terms of human resources, Vigilantes boasts an international staff of specialized consultants, including ASIS (formerly American Society for Industrial Security) certified protection professionals, security technology specialists, former FBI and other law-enforcement agents, as well as investigators who provide a full range of security and safety support to corporate and local facility programs. Vigilantes’ strict quality guidelines have resulted in the development of a robust supervision and management infrastructure that is widely recognized as one of the best in Puerto Rico. “We ensure clients receive a level of service beyond their expectations,” Pedrosa said. n

A Trusted Resource for 45 Years.



Vigilantes t ®

Security Solutions for Industry





Thursday, MARCH 31, 2016


ADT P.R.: Premium Security Solutions Committed to BY CB STAFF

It has been 140 years since ADT Corp. began providing the most advanced security solutions worldwide and 55 years in Puerto Rico. However, it isn’t just the company’s extensive experience that sets it apart. ADT’s success is also the result of its team, who are meticulously screened, highly trained and technologically

savvy professionals in the industry. They also are locals who live right here in Puerto Rico— experts who not only are at the top of their game, but also are part of the community. Only ADT offers multiple monitoring centers that provide 24/7 protection of the property and people you love most. ADT has won the trust of more than six million

ADT Sales Team in Puerto Rico

customers—trust that drives the company to continually provide the most cutting-edge solutions. “At ADT, we’re committed to helping people live their lives more freely, with peace of mind knowing their families and property are protected,” said Erika Torres, new branch manager of ADT Puerto Rico. Imagine you leave for vacation but can’t remember if you locked the back door or left the lights on. With ADT Pulse, you can lock the door, turn the lights on or off, or set your air conditioner— and you can do it all from your compatible mobile phone or any web-enabled device. ADT Pulse is designed to help people control their home or office security from anywhere. Alarms, video cameras and thermostats are now easily managed remotely, giving you more freedom to go where you need, without having to compromise the protection of the things that

matter to you most. You can even be alerted via text message, video clip or email. ADT Pulse is also customizable, allowing you to personalize the system to fit your lifestyle. With its new “Modes” feature, you can set up profiles such as “On Vacation,” which allows you to put your lights, thermostats, locks and even household appliances on different schedules while you are away. When you return, set Modes to “At Home,” and everything goes back to its regular schedule. Today, security is more than a choice—it’s a necessity. ADT is the leader in security systems, and continues to raise the bar. Offering its products and services in the mainland U.S., Canada and Puerto Rico, ADT Security Services, originally known as American District Telegraph Corp., has been in the business since 1874, protecting nearly eight million homes. n

GM SecTec “Site Charlie”, the most advanced security operations center (ASOC) in Puerto Rico & North Latin America.

LEADING EDGE MISSION ASSURANCE IN ALL DOMAINS n Man Power Security n Security as a Service n Physical Security n Cyber Security Operational since December 7th, 2015

Visit us at GMSECTEC.COM GMSECTEC (HQ) 787-522-2222 GMSECTEC International +507-297-4081



Thursday, MARCH 31, 2016



As Ranked by

PUERTO RICO’S LARGEST SECURITY SYSTEMS & SERVICES COMPANIES (Listed According to 2015 Gross Revenue) Current/ Previous Ranking

Company Name Telephone/Fax Internet/Email Address

Physical Address

2015 Gross Revenue $


Honeywell International Inc. (787) 792-7075 / (787) 792-0053

Rexco Ind. Park 400 C St., Suite 100 Guaynabo 00968



Avant Technologies of P.R. (787) 746-9191 / (787) 746-7131

Caguas West Ind. Park Bldg. 39 Caguas 00725


GM Security Technologies (787) 620-5260 / (787) 620-5244


No. of Full-Time Employees

Main Products Sold

Main Services Offered

Year Established in P.R.


HVAC, security, fire alarm, safety, life, energy management systems

Mechanical maintenance, energy management & installation


Carlos Rivera Agosto Branch General Manager



Video surveillance solutions for finance industry & city wide

Security manufacturing & integration


Luis Díaz CEO

GM Group Plaza 1590 Ponce de León Ave. Río Piedras 00926



Access control & video surveillance systems

Integrated security, big data & cloud computing, managed & hosted services


Jesús Cortina Exec. Vice President/ General Manager

ADT Puerto Rico LLC (787) 474-9435 / (787) 474-9370

Luchetti Ind. Park 290 B St. Bayamón 00961



Security & surveilance systems, intercom & maglocks

Security & monitoring


Erika Torres Branch Manager


Alarm & Control System Co. (787) 781-8283 / (787) 749-8989

Caparra Heights 566 Esmirna St. San Juan 00920



Access control & fire alarm systems, HVAC system control valves, CCTV

Building management systems services, installation, energy audits


Alberto C. Quadreny President


Professional Communications Inc. (787) 751-7611 / (787) 751-5503

Bo. Monacillos 1759 Rd. 8838 Río Piedras 00926



Fire alarm, nurse call, security, communications & sound systems

Installation & maintenance


Glorimari Montes President


Business Tele-Communications Inc. (787) 764-2019 / (787) 764-2923

Paradise Hills Urb. 1659 Paraná St. Río Piedras 00926



Fire alarms, CCTV, access control systems, infant protection, nurse call, sound & paging

Installation & repair of telecommunications & security systems


Ángel E. San Miguel President


Fire Control Corp. (787) 793-6060 / (787) 793-4905

1044 Jesús T. Piñero Ave. San Juan 00921



CCTV, fire alarms, access control systems, clean-agent fire suppression, smoke detectors

Installation, repair, maintenance, consulting & design


Carlos Quilinchini Jr. President


Protective Security Systems Inc. (787) 792-4025 / (787) 792-7745

Caparra Terrace 763 15th St., SO San Juan 00921



Security & access control systems, alarms, CCTV



José R. Hernández President


The Security Group Corp. (787) 743-3299 / (787) 744-9699

Villa Blanca Urb. 42 Aquamarina St. Caguas 00725



Electronic security systems

Installation, design & maintenance


Luis A. Benet President


EAS Systems Inc. (787) 284-4007 / (787) 259-2251

1369 Salud St. Suite 102 Ponce 00717



CCTV, access control, structured cabling, intruder detection & antishoplifting systems

Security systems design, installation & maintenance


Pedro J. Bonnín President


Genesis Security Services Inc. (Technology Div.) (787) 776-2830 / (787) 757-8975

Villa Carolina 4th Ext. 143-12 401 St. Carolina 00983



CCTV, intrusion & fire alarms, access control systems, GPS

Installation, maintenance, monitoring, consulting & technical support


Roberto Morales COO/CFO


All Safe Video Suppliers Inc. (787) 793-5555 / (787) 782-3345

CPM Plaza 44 Rd. 20, Suite 101 Guaynabo 00966



Access control systems, IP video, security products, fire alarms

Installation, support & integration


Blanca L. Concepción President


Crowd Control Company Inc. (787) 754-0834 / (787) 763-9337

Huyke Urb. 370 Fernando Primero St. Hato Rey 00918



Portable posts, coin & currency equipment, fireproof files, cabinets, electronic display & traffic devices

Vault & safe repairs & maintenance


Ángel L. Marrero President

* CARIBBEAN BUSINESS estimate Number of full-time employees includes part-time employees where applicable (every two part-time employees = one full-time employee). Unless otherwise noted, all information was provided by the companies. Research by Marilda A. Quiñones del Castillo Copyright © 2016 CARIBBEAN BUSINESS

Top Executive Title


Thursday, MARCH 31, 2016


2016 Lexus RX 350 F Sport Redefining the Midsize Luxury SUV Segment


Since the model’s launch in 1998, the Lexus RX has proven to be immensely popular with those who want the flexibility of a sport utility vehicle (SUV) and the driving comfort of a luxury sedan, all wrapped in an attractive, elegant package. The mix of sharp creases and curves in the redesigned RX represents a bold evolution in the model’s styling, sharing the same design DNA with other recently launched models in the Lexus lineup. This perennial best-selling luxury crossover comes with sophisticated safety features, driver aids, along with new convenience and technology

features to make this one of the best Lexus luxury utility vehicles being offered to date. The RX 350 competes against segment stalwarts such as the BMW X5, Volvo XC 90, Acura MDX, Porsche Cayenne, Mercedes-Benz GLE, Lincoln MKX and Volkswagen Touareg. Two versions available The five-passenger 2016 Lexus RX 350 midsize crossover SUV is available in two versions: regular and F Sport. The RX is also available in a hybrid version, called the RX 450h. Standard equipment on the RX 350 includes 18-inch wheels, automatic light-emitting diode (LED) headlights, LED foglights and running lights, rear privacy glass, a power liftgate,

keyless ignition and entry, selectable drive-mode settings (alter steering, gas-pedal sensitivity and transmission shift program), dual-zone automatic climate control, eight-way power front seats (with twoway power lumbar adjustment), a power tilt-and-telescoping leather-wrapped steering wheel, a 40/20/40-split rear seat (reclines, slides and folds), and “NuLuxe” premium vinyl upholstery. The RX 350 also has a rearview camera, Bluetooth phone and audio connectivity, the Display Audio tech interface (with a knob controller and an 8-inch display) and a nine-speaker sound system with a CD player, satellite and HD radio, an auxiliary audio jack, two USB ports

and a media player interface. Our test vehicle, the F Sport, is technically a package and includes sportier exterior styling, 20-inch wheels, adaptive suspension dampers, additional drive-mode settings, an engine noise enhancer, transmission paddle shifters, special gauges, heated and ventilated sport seats, leather upholstery and special interior trim. One peppy engine Every 2016 Lexus RX 350 is powered by a 3.5-liter V6 engine good for 295 horsepower and 267 pound-feet of torque. An eight-speed automatic transmission and front-wheel drive are standard. All-wheel drive is optional (standard with the F Sport).

The Environmental Protection Agency-estimated fuel economy of the regular RX 350 is 20 miles per gallon (mpg) in city and 28 mpg on highway with front-wheel drive, and 19 mpg on city, 26 mpg on highway with all-wheel drive (including the F Sport). During our weekend test drive, the RX 350 F Sport felt quick and responsive, yet comfortable as a luxury sports sedan. Car-like interior With its lower seating position and driver-focused dashboard design, the 2016 Lexus RX 350 is palpably more carlike than its predecessors. But rest assured,

Continues on page 43


Thursday, MARCH 31, 2016

Continues from page 42

the RX 350 still has the elevated view of the surroundings that makes crossovers so popular. The overall design is also visually appealing (especially in the available two-tone color schemes), while the quality of materials and construction has been elevated to the same category as most top segment competitors. There is plenty of headroom in the cabin despite the more radically raked roof line, even if some may find it a tad claustrophobic compared to some competitors. The sliding and reclining backseat is wide and comfortable, with abundant legroom for even tall occupants, while further benefiting from optional power adjustment. The front seats felt supportive during our weekend testdrive, although larger drivers may find the F Sport model’s sport seats a tad snug. The versatile 40/20/40-split rear seatback does not quite fold flat. Listed cargo capacity is 18.4 cubic feet behind the second row and 56.3 cubic feet with the seats folded—below some top competitors. Another downside is the Remote Touch electronics interface. Its mini-

joystick-like controller is superior to the touchpad found in the Lexus NX and RC, but this interface still requires a distracting degree of dexterity and concentration to operate effectively, since it is quite sensitive. On a positive note, Lexus bundles Remote Touch with the upgraded and truly sharp and impressive-looking 12.3-inch display. Our take The new RX is dynamically better than before, and certainly plenty comfortable and supremely quiet. At the same time, the RX 350 F Sport’s dynamic package is greatly improved. The steering is more consistent in its feel, even when switched to one of two Sport modes. The F Sport’s adaptive suspension, however, is what makes it the best of the RX bunch. The main benefit of this redesigned model is that the RX’s body is more controlled when driving over bumps, yet the ride remains genuinely comfortable. We were surprised to find that it was perfectly pleasant even in the suspension’s firmest, Sport S+ setting. Really, the F Sport feels “just right” and drives as well as, if not better, than some of its top competitors. n

Vehicle specs Vehicle type: Midsize crossover SUV Drive type: All-wheel drive Engine: 3.5-liter V6 engine Transmission: Eight-speed electronically-controlled shiftable automatic transmission Horsepower: 295hp @ 6,300 rpm Torque: 268 foot-pounds @ 4,700 rpm Brakes: Four-wheel power-assisted discs with four-sensor, four-channel Anti-lock Braking System, Electronic Brakeforce Distribution and Brake Assist Tires/wheels: P235/55R20; alloy wheels Turning circle: 38.8 ft. Seating capacity: Five Curb weight: 4,387 pounds Fuel economy (MPG): 19 mpg in City, 26 mpg on Highway Base price in Puerto Rico (including excise tax): $73,995,000 PROS: Impeccably crafted and attractively designed cabin; supremely quiet; appealing ride and handling balance with F Sport; strong value for the segment CONS: Below-average cargo capacity; very sensitive Remote Touch interface BOTTOM LINE: With comfort and interior quality as its key strengths, the carlike driving experience of the redesigned 2016 Lexus RX 350 helps broaden its appeal, making it a smart pick for a luxury midsize crossover SUV


Thursday, MARCH 31, 2016 |



Enjoy and Help Conserve Puerto Rico’s Natural Resources BY ANDREA MOYA MUÑOZ

Nature lovers, families looking for a weekend outing or anyone interested in exploring Puerto Rico’s lesser known green corners have a wonderful resource with Para La Naturaleza, the nonprofit unit of the Conservation Trust of Puerto Rico. Para La Naturaleza’s goal is to “integrate society at large with the conservation of natural ecosystems,” according to their mission

statement. They organize volunteer work, educational programs, tours, special events and workshops, as well as manage the visitor centers and natural areas protected by the trust. Each weekend, Para La Naturaleza offers an array of hikes, bike rides and educational tours from their various visitor centers as well as other natural areas such as Cañón San Cristóbal in Barranquitas, Roosevelt Roads in Ceiba, and various locations in San Juan, including Río Piedras.

Cabezas de San Juan, Fajardo


his weekend, get out of the house and explore. If you are a cycling enthusiast, visit the southern region of Puerto Rico with the Relevo Bike Tour. If trying out new restaurants is more your speed, head over to Hatillo this Friday, April 1, for their Culinary Fest. Want to spend more time outdoors? Take the family on a guided tour of one of Para La Naturaleza’s visitor centers around the island. From Caribbean Business, enjoy your weekend! “El Préstamo” A man who needs a loan will make the bank manager’s life miserable until he gives him the

money in this popular comedy by playwright Jordi Galcerán and starring Jorge Castro and Ernesto Concepción. • April 1, 2, 8 & 9; 8:30 p.m., April 3 & 10; 5:00 p.m. Centro de Bellas Artes, San Juan’s Santurce district, $26$31, Students 50% off For tickets: or Hatillo Music & Culinary Fest Festival showcasing the best of Hatillo’s culinary scenes along with performances by local musicians and bands.

Hacienda Buena Vista, Ponce

Most of the regular tours to Para La Naturaleza’s visitor centers are available Wednesday to Sunday at different times of the day. At Hacienda Buena Vista in Ponce, visitors can learn about the history of this important coffee plantation and Río Cañas’ (Sugarcane River’s) effect on coffee production. The traditional tour of the Cabezas de San Juan Nature Reserve in Fajardo takes visitors through dry forests, mangroves and above Laguna Grande (the Grand Lagoon),

before visiting the Fajardo Lighthouse. For those looking for a challenge, Hacienda La Esperanza Nature Reserve in Manatí offers hikes through the coastal valley of Río Grande de Manatí (the Big River of Manatí) to the restored structures of one of the most important sugar plantations of the 19th century. To make reservations and learn more about Para La Naturaleza’s conservation efforts, visit http://

• Friday, April 1; 5:00 p.m., Public Plaza, Hatillo, Entrance is free, plates of food $5. For information: https:// hatilloculinaryfest/?fref=ts

Paddle4 Autism An event benefiting children and teenagers with autism and other conditions offering paddle-boarding, workshops and activities. • Saturday, April 2; 9:00 a.m. to 4:00 p.m., Inches Beach, Patillas Activities outside the water are free, registration for water activities has a cost. For more information or to register: patillasunidosporelautismo@gmail. com or patillasunidos.porelautismo

Orchid Festival The 67th edition of the Orchid Festival at UPR Botanical Gardens • March 31 to April 3; 9:00 a.m. to 6:00 p.m. UPR Botanical Gardens, San Juan’s Río Piedras district Free entrance For more information: https://

Para La Naturaleza Tours and educational workshops focused on conservation and

exploring Puerto Rico’s natural resources. Various dates and locations For more information: https:// index.jsf Relevo Bike Tour Noncompetitive cycling event spanning the towns of Salinas, Santa Isabel, Juana Diaz and Coamo, benefiting the American Cancer Society. • Sunday, April 3; departing 6:30 a.m. Meet up at Supermercado Selectos in Salinas $55, includes jersey To register: events/121-relevo-bike-tour-2016


| Thursday, MARCH 31, 2016


San Juan neighborhoods push abandoned properties into productive use

Neighborhoods Push For Creation of San Juan Community Land Bank

Transforming Community Liabilities Into Assets, Nonprofit Organization to be Created Through Municipal Ordinance, Senate Bill 1546

Former Rave store in front of Central High School in Santurce. BY EVA LLORÉNS VÉLEZ

Vacant and abandoned properties are a challenging problem for any community because they destabilize neighborhoods, create safety hazards, drive down property values and reduce local tax dollars. A group of communities and organizations in San Juan are promoting the island’s first Community Land Bank (CLB) to take over unused properties, vacant lots and ruined buildings that were the result of reduced investments, migration and an increasing number of foreclosures, of which about 75,000 are in the island’s courts. The communities of Sagrado Corazón, Machuchal and the Movement Parque Vivo, among others, initially promoted the


Community Land Bank for San Juan‘s Santurce district but are now lobbying for a CLB for all of San Juan. The CLBs are public authorities created to acquire, hold, manage and develop vacant properties. Land banks aim to convert vacant properties that have been neglected by the open market into productive use, thereby transforming neighborhood liabilities into assets, says Nelson Rodríguez, a resident of Sagrado Corazón. The CLB acquires title to vacant and abandoned properties; eliminates barriers to redevelopment; and transfers property to a new owner in a way that supports community needs and priorities. “The main goal will be to acquire abandoned, vacant or ruined properties and rehabilitate them to make them productive. It

will be a nonprofit organization with the power to demolish properties, pay debts on abandoned properties and acquire properties for future public use,” he said. “If these [abandoned] properties are allowed to continue, there will be less revenues for the government.” He noted that in Santurce, which had a population of 150,000 people in 1970 and now has 77,000 people, there are 12,522 unused properties, according to the Community Survey. “These unused homes become deteriorated. The deterioration stimulates vandalism and disorder, or the so-called broken windows theory. This situation is what is happening in Santurce, in which vandals spot an abandoned property and immediately steal the doors, windows, copper, plumbing and other metals. That then increases criminal activity, fire hazards and eyesores, thus increasing government costs,” he said. Land banking is emerging as an important strategy for community development to manage vacant properties and put them back into productive use, spurring economic investment and preserving open space. There are more than 100 land banks or land-bank initiatives across the U.S. One of the most well-known, the Genesee County Land Bank in Flint, Mich., has reportedly raised surrounding property values by $109 million and spurred $60 million in new private investment. Rodríguez noted that CLBs go back to 1971 in St. Louis and Cleveland in 1976, and were initially aimed at reducing the number of properties owing delinquent

taxes. They were created through municipal ordinances. The proposed CLB is going to be a nonprofit organization created through a municipal ordinance that Marcos Rigau, a former lawmaker on San Juan’s Municipal Assembly, is expected to introduce. However, the CLB proposed for San Juan will also need legislative approval since it strives to be able to obtain tax exemptions and have the authority to issue bonds. The legislation to allow such CLBs, Senate Bill 1546, is in public hearings but it was not immediately known if it will be passed because the Treasury Department

had objections to language that provides tax incentives for Santurce’s development. The CLB proposed for San Juan will be able to establish agreements to obtain properties from the federal Housing Department, Federal Deposit Insurance Corp, commercial banks, savings & loans, cooperatives, Veterans Affairs Administration and others. It also strives to be able to obtain federal and public funding, donations and issue bonds to finance the purchase and rehabilitation of the properties. “The CLB is not a bank as we know it,” Rodríguez said.

In front of Ciudadela, this building has a renter on the first floor but at least seven floors are abandoned. This building has appeared in various international reports on Puerto Rico’s economic crisis.

Old Burger King restaurant ( first floor) next to Bellas Artes, Stop 22, Santurce.



Thursday, MARCH 31, 2016 |


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Gustos Coffee Co. Brews up a Good Story of Coffee and Love BY MARIO BELAVAL DÍAZ

Puerto Rico production house Oh! Latino scored a first in the local advertising and marketing industry with its “Mucho Gusto” video short for client Gustos Coffee Co., the first of what is known as brand storytelling on the island. Orlando ‘Oné’ Colón, head of Oh! Latino, explained that in brand storytelling’s goal is to create a connection, or link, between the brand and the consumer. “There is the aspect of creating awareness that might result in sales, but brand storytelling aims to focus on how people may relate better to the brand,” said Colón, who was the scriptwriter, producer and director of the threeminute, 17-second video. “It aims to translate company values through the story and give the brand an identity for itself with which people can identify; it’s not only about buying or consuming a product because it is good, but how, through the values of that brand, it can be part of people’s lives.” Up-to-date, the video, which was launched on Gustos Coffee Co.’s Facebook page March 1, has been shared more than 575 times through social media and is close to reaching over 20,000 views. In fact, just 24 hours after it was launched, the video received 12,000 views and was shared 390 times. “The aspect of sharing it is interesting because, more than a view, it means there was engagement with the video, that it appealed to them [the people] up to the point that they felt it was important or worth sharing with others,”

The video, which was launched March 1, has been shared more than 575 times through social media and is close to reaching over 20,000 views. Colón said. “Added to that, through the story, we also inform people about coffee production and its process in Puerto Rico.” The storyline follows two parallel stories, one about a coffee bean and the other about a couple, a young man and a young woman. A coffee bean has a male and a female component. These are separated after being picked and the story portrays the separation of these two halves undergoing the entire process of production into coffee, destined to be reunited after they become one as ground coffee that is prepared and served. At the end of the video, the young woman and man meet as they reach out to pick up the same cup of coffee that has been served at a counter in a coffee shop. Part of the story was

inspired by the relationship of the owners of the brand, Daniel Omar Torres and Grisel León, who founded the company in 1999. The video was filmed at various farms in Yauco’s La Montaña district and the Gustos Coffee Co. shop in Guaynabo. “It is a very novel and fresh

approach and we are very satisfied with the result—that parallel aspect of the coffee and the couple’s story,” León said. Gustos Coffee Co., she added, has alliances with coffee farmers in different regions of the island that allow them to acquire the best coffee from each zone.

CREATIVE CORNER Agency: Oh! Latino Productions Client: Gustos Coffee Co. Concept: ‘Mucho Gusto’ (‘A lot of taste’ or ‘Pleased to meet you’) Script, production and direction: Orlando ‘Oné’ Colón Director of photography & editor: Alfredo Robles Production assistant & second camera: Nathalee Hernández Sound design: Johannes Peters en Diseño de Sonido Narrator: Enrique ‘Quique’ Puig Music: ‘Semilla en la tierra’ (‘Seed in the ground’) by singer/songwriter Cheryl Rivera

Caribbean Business - March 31, 2016  

Caribbean Business is the weekly business newspaper published by Latin Media House, LLC, from Santurce, Puerto Rico. Thursday, MARCH 31 - AP...

Caribbean Business - March 31, 2016  

Caribbean Business is the weekly business newspaper published by Latin Media House, LLC, from Santurce, Puerto Rico. Thursday, MARCH 31 - AP...