TCR Volume 2 Issue No 23 by The CenSEI Report

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Volume 2 - Number 23 • June 11-17, 2012

Strategic Analysis and Research by the

CENTER FOR STRATEGY, ENTERPRISE & INTELLIGENCE I didn’t feel bad, because I have God, and I believe God has a good plan for me ~ Boxing champion Manny Pacquiao after his loss to Timothy Bradley Jr. Bradley should have given the belt and announce victory to Pacquiao right after the decision ~ Former world champion Oscar de la Hoya I have the best eye doctor in the world. If they get on a plane to LA, I would pay for their visit ~ Boxing promoter Bob Arum on what he would tell the bout judges

4 Race to Save the Lives of Filipino Mothers

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For every 1,000 births in the country, a mother will die. There must be a way to bring the body count down. But first, let’s get the numbers right • The U.N.’s plan: A three-pronged strategy to reduce maternal mortality

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14 Is Your Country Media-Literate?

With the explosion of traditional and online media, people must learn to read, listen, watch and download intelligently. And media must help them • What to do: Media literacy recommendations from the World Bank

24 San Miguel Builds an Infrastructure

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and Energy Behemoth

The Philippines’ largest beer and food conglomerate has spent billions on power plants, airports and railways. It’s not done yet • Too big too fast? San Miguel’s ambitious diversification raises some brows • When big is bad: San Miguel’s new ventures raise an old fear about its moves — monopoly

30 Vaccinating Asia Against

the Eurozone Contagion

If the eurozone breaks up, can new growth paths help the region’s economies stay resilient amid global financial turmoil? • No vacancies: In America and Europe, the jobless ranks keep growing • Money problems: The euro dream turns into a financial nightmare • Who’s up, who’s down: The world competitiveness rankings

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POINT & CLICK You can access online research via the Internet by clicking phrases in blue

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Center for Strategy, Enterprise & Intelligence provides expertise in strategy and management, enterprise development, intelligence, Internet and media. For subscriptions, research, and advisory services, please e-mail report@censeisolutions.com or call/fax +63-2-5311182. Links to online material on public websites are current as of the week prior to the publication date, but might be removed without warning. Publishers of linked content should e-mail us or contact us by fax if they do not wish their websites to be linked to our material in the future.

Pitching a Novel Idea to Asia’s Media Summit User instructions for newspapers, radio and TV programs, and websites? That was what Ricardo Saludo, managing director of the Center for Strategy, Enterprise & Intelligence, which publishes The CenSEI Report, pitched to the Asia Media Summit 2012 in Bangkok on May 29-30. He was among five panelists in a session titled “Building a Media-Literate Public,” about ways to promote media literacy, the knowledge and skills to critically and intelligently select, access and use mass and online media.

CenSEI Managing Director Ricardo Saludo addressing Asia Media Summit 2012, held May 29-30 in Bangkok: ‘Media needs user instructions’ AIBD/AMS

For his talk, Saludo drew upon his strategic expertise as Cabinet Secretary for many years and graduate of Oxford’s Strategy and Innovation program. He also tapped his decades as a journalist, having been editor and writer with Asiaweek Magazine until 2001, and public affairs commentator on radio, TV and print in the past decade, including his current MWF column in The Manila Times.

“Media literacy programs are mostly school-based,” he told summiteers at Bangkok’s Centara Hotel. “But let’s face it: even those with ML instruction may not recall their classroom learning in the rush to read the morning paper or catch the evening news.” Not to mention that many Asians are past school age and won’t get media literacy instruction from class. Hence, Saludo’s proposal is for media itself to promote intelligent, critical reading, listening, watching and browsing. “Even simple products like clothes and toasters have instructions, so why not something complex like media?” he argued. “Without them, a product could do harm. So can news reports, opinion pieces, blogs and tweets.” Indeed, some media already carry warning labels, like movie ratings and broadcast advisories about mature subject matter, explicit scenes or strong language. The idea then is for journalistic material and websites to carry media literacy messages like: Know your information sources. Validate news through multiple reports. Listen to opposing sides. Report errors. It’s one more novel idea in this week's issue worth trying out, like San Miguel’s expansion into oil and power, Asia’s quest for new growth sources and mother-saving initiatives. You get them every week in The CenSEI Report.

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The Last Two Minutes for Reducing Maternal Mortality Despite its progress to date, the Philippines wants to redouble its efforts to reduce maternal mortality in line with the United Nations' Millennium Development Goal By Pia Rufino

STRATEGY POINTS Depending on the source, the local maternal mortality ratio may have dropped anywhere from 22.48% in 16 years to 43% in 20 years Local maternal mortality continues on a downward trend, but a lot more progress will be needed to achieve the United Nations' Millennium Development Goal 5 target of a 75% reduction in maternal mortality ratio by 2015 Even as the country's likelihood of achieving Millennium Development Goal 5 is regarded as slim, the Department of Health has assembled a public-private coalition to develop health interventions in priority areas

lobally, the number of women dying in pregnancy and childbirth has fallen by 47% in two decades, according to the most recent World Health Organization (WHO), United Nations Children's Fund (UNICEF), United Nations Population Fund (UNFPA) and the World Bank estimates. The report â&#x20AC;&#x153;Trends in maternal mortality: 1990 to 2010â&#x20AC;? released in May said the number of maternal deaths in the world decreased from 543,000 in 1990 to 287,000 in 2010. Based on the study that presents the global, regional and country estimates of maternal death, the maternal mortality ratio (MMR), or the number of maternal death per 100,000 live births, in the Philippines dropped from 170 in 1990 to 99 in 2010-a decrease of 43% over 20 years. In 2010, 2,300 maternal deaths occurred in the country. (p. 35) According to the report, several factors may have contributed to the global decline, such as: improvement in health systems and coverage in health-care interventions,

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The last two minutes for reducing maternal mortality

increased physical accessibility to health facilities, and factors outside the health sector, e.g., increased female education, according to the report. (p. 27) However, despite substantial reductions in maternal deaths (except in Southern Africa, where MMR increased by 19% from 1990 to 2010), the joint UN report said all regions are still “very unlikely to achieve” the Millennium Development Goal (MDG) target for improvement in maternal health. (p. 22) The Millennium Development Goals are eight international development goals that all 193 United Nations member states have agreed to achieve by 2015. The fifth MDG goal (MDG 5) is improving maternal health, which calls for the reduction of maternal deaths by 75% between 1990 and 2015, and achieving universal access to reproductive health care by 2015. Comparing maternal mortality across southeast Asia. Maternal mortality

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across Southeastern Asia dropped by 63% in 20 years. Among southeast Asian countries, Vietnam has already achieved 75% reduction in maternal deaths from 1990 to 2010, while Laos and Cambodia both have registered 70% declines. To achieve a 75% reduction in 20 years would require a compounded annual average reduction rate of about 7.0%, while a 70% reduction over the same period would require a compounded annual average reduction rate of about 6.0%. Alongside the Philippines' MMR of 99 maternal deaths per 100,000 live births, elsewhere in southeast Asia, the MMRs in Brunei, Malaysia, Singapore and Thailand in 2010 are 24, 29, 3, and 48, respectively. The Philippines, along with Myanmar and Indonesia, are categorized as “making progress” towards improving maternal health, with average annual declines in maternal deaths of between 2% and 5.5%, according to the report. (See table next page)

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6 TRENDS IN ESTIMATES OF MMR IN SOUTHEAST ASIAN COUNTRIES BY 5-YEAR INTERVALS, 1990–2010

Country

1990

1995

2000

2005

2010

% change in MMR between 1990 and 2010

-16

Cambodia

830

750

510

340

250

Lao People's Democratic Republic

1600

1200

870

650

Myanmar

520

380

300

230

200

Philippines

170

140

120

Singapore

160

100

Brunei Darussalem Indonesia

Malaysia

Thailand Vietnam

MMR

600

240

420

340

Average annual % change in MMR between 1990 and 2010

Range of uncertanity on annual % change in MMR Lower estimate

Upper estimate

-0.9

-1.6

-0.2

-70

-5.8

-7.1

-4.7

470

-70

-5.9

-6.7

-5.1

-45

-3.0

-8.1 -5.4

-4.2

110

-43

-2.8

-3.1

-2.5

-40

-2.5

-5.9

1.0

-76

-6.9

-12.0

-2.0

270

54 74

220

-63

-4.9

-62

-4.8

-11

-0.6

-5.9

-1.7

-4.0

2.2

1.1

Progress towards improving maternal health

on track

making progress on track

making progress making progress

on track

MMR= no. of maternal deaths during a given time period per 100,000 live births during the same time period Source: TCR compilation of data from “Trends in maternal mortality: 1990 to 2010,” WHO, UNICEF, UNFPA, and World Bank, May 6, 2012, p. 37-45

Per the report, countries with MMR ≥100 in 1990 are categorized as “on track” if MMR has had 5.5% or more average annual decline; “making progress” if MMR has had 2% to 5.5% average annual decline; “insufficient progress” if MMR has had less than 2% average annual decline; and “no progress” if MMR has had an average annual increase. Countries with MMR <100 in 1990 are not categorized. Countries lack reliable information on maternal deaths. However, the joint UN report said a major challenge in assessing accurately the progress of most countries towards the MDG 5 is the lack of reliable information about maternal deaths. The Philippines is among 88 countries

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covered in the study characterized as lacking good complete civil registration data but where other sources of national data are available. Having a good civil registration system will “tremendously improve the estimation of maternal mortality and monitoring of the MDG goal 5,” based on the report. In fact, the first recommendation in the report of the UN Secretary-General's Commission on Information and Accountability for Women's and Children's Health "Keeping Promises, Measuring Results" calls for all countries to take “significant steps to establish a system for registration of births, deaths and causes of

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The last two minutes for reducing maternal mortality

death, and to have well-functioning health information systems that combine data from facilities, administrative sources and surveys” by 2015. Chaired by the WHO, the commission was created in 2011 to propose a framework for global reporting, oversight and accountability on women's and children's health. Philippines has inconsistent maternal death figures. The 2012 joint UN reportalso noted that maternal mortality estimates are not necessarily the same as official statistics of the countries. If the WHO, UNICEF, UNFPA and World Bank MMR estimate in 1990 – 170 maternal deaths per 100,000 live births – is the basis, the Philippines should aim for the maternal mortality ratio of 42.5 deaths per 100,000 live births by 2015. Meanwhile, the latest official statistics on maternal death in the Philippines provided

by the National Statistics Office (NSO) through its 2006 Family Planning Survey shows that the MMR in the country declined from 209 maternal deaths per 100,000 live births in 1990 to 162 in 2006-- 22.48% decline in 16 years. So for NSO, the MMR in 2015 should be 52.25. However, it also said that the MDG target may not be achievable and “maternal health program implementers need to redouble efforts to achieve this target.” Figures of maternal deaths in the country from 1990 to 2006 are compiled in “Indirect Estimates of Maternal Mortality: Philippines in 2006,” a 2007 paper by Benedicta Yabut of the NSO and Faye Bautista of the Bangko Sentral. (See table below) “Maternal deaths are obviously underregistered, because of the rarity of the event and the hardship in determining if a death is related to or aggravated by a pregnancy, ” according to the study.

MATERNAL DEATHS IN THE PHILIPPINES, 1990 TO 2006 Year 1990

MMR (per 100,000 live births) 209

1991 1992

203 197

1994 1991 1993

186 180 209

1998 2000 2000 2003

172 163 96 108

1993

191

Source TWG on Maternal and Child Mortality (MCM), National Statistical Coordination Board TWG MCM TWG MCM TWG MCM

TWG MCM TWG MCM National Demographic and Health Survey (NDHS), National Statistics Office (NSO) NDHS Yabut and Yabut (2004 NCS) Civil Registry, NSO Civil Registry, NSO Source: Indirect Estimates of Maternal Mortality: Philippines in 2006 by Benedicta A. Yabut and Faye Y. Bautista

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8 The report further said that assessing the Philippines' achievement in terms of MDG goal 5 using data from Technical Working Group on Maternal and Child Mortality and from the National Demographic Health Survey is “misleading” and “tricky” since the two are “not comparable.” “The former considers some assumptions; while the latter, which costs the government hundreds of thousands of pesos, still is not representative of the true situation because the event is so rare to be captured only through a survey.”

The Melgars said it was unlikely the Philippines achieved a recordsetting decline in MMR amid all the economic and political problems during the 1980s

Meanwhile, a separate study titled “Maternal mortality for 181 Countries, 1980-2008: A Systematic Analysis of Progress towards Millennium Development Goal 5.” published in April 2010 in The Lancet, one of the world’s leading and oldest general medical journals, indicates that the country reduced its MMR by 61% from 1980 to 1990, and by 81% from 1980 to 2008. (The study is available free of charge, but registration is required.)

letter to The Lancet, the Melgars said it was unlikely the Philippines achieved a record-setting decline in MMR amid all the economic and political problems during the 1980s. Citing data from NSO, the two argues that MMR has declined only slightly over the past 25 years. “If Hogan and colleagues’ estimates were accurate, the great mystery is: how was it achieved?” they asked.

“Other indicators of maternal health support a scenario of little progress. For example, the proportion of deliveries by health professionals in the Philippines has risen very slowly—a mere 17% over 15 years (from 53% to 62% from 1993 to 2008),” the Melgars wrote in their letter.

In the abstract of the study, the authors said they constructed a database of observations of maternal mortality for the countries from vital registration data, censuses, surveys, and verbal autopsy studies.

DOH, doctors to review maternal death figures. Alarming discrepancies in maternal death figures due to different measurement standards used by government and private hospitals have led Department of Health (DOH) Secretary Enrique Ona and doctors in Northern Luzon to start an audit of the country’s rate of maternal deaths, as reported in the Philippine Daily Inquirer in May 2011.

But these estimates are disputed by Junice Demetrio Melgar and Alfredo Melgar of Likhaan Center for Women’s Health, a non-government organization dedicated to the promotion of women's health and empowerment, who say the findings are “quite far from reality.” In a June 2010

According to the report, Ona addressed the discrepancy after local hospitals and health centers in Apayao included women who died outside the province in its maternal death records in 2010. A public health officer in Apayao said they were instructed to use a system that counts the health

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The last two minutes for reducing maternal mortality

The UNFPA's three-pronged strategy to reduce maternal mortality According to the United Nations Population Fund (UNFPA), the following three-pronged strategy is the key to the accomplishment of a 75%-reduction in the maternal mortality ratio between 1990 and 2015: • All women have access to contraception to avoid unintended pregnancies • All pregnant women have access to skilled care at the time of birth • All those with complications have timely access to quality emergency obstetric care The international development agency said significant declines in maternal mortality have occurred in several countries -- China, Cuba, Egypt, Jamaica, Malaysia, Morocco, Sri Lanka, Thailand and Tunisia – where more women have gained access to family planning and skilled birth attendance, while severe shortages of trained health providers with midwifery skills are holding back progress in many countries. UNICEF Chief of Health Dr. Peter Salama also stressed the need to scale up family planning services according to international policies and laws and to support antenatal care and Malaria and HIV programs to decrease maternal mortality.

UNICEF Chief of Health Dr. Peter Salama said antenatal care, skilled birth attendants, emergency obstetrics are important to reduce maternal mortality

“We also need to have skilled birth attendants that can deliver emergency obstetrics care or certainly be able to refer women suffering from complications to emergency obstetric care,” he added. For UNICEF Gender Specialist Noreen Khan, it is important to educate women to reduce their risk of death during UNICEF Gender Specialist Noreen Khan talks about the pregnancy. Khan said she has observed importance of education in reducing risks of death in pregnancy that women in Southeast Asia are being more educated thus making informed decisions to have a traditional birth attendant during child delivery. These women respect and uses the information on reproductive health they acquired from secondary and tertiary secondary education, she added.

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condition of residents hospitalized or treated outside the province.

reproductive health services, equipment, supplies and skilled healthcare workers.

Ona also said the country “has a lot of catching up to do,” citing 2006 NSO figures that indicated 162 maternal deaths per 100,000 live births in the country.

Based on the 2006 records of DOH, 732 died of complications related to pregnancy occurring in the course of labor, delivery and puerperium (the time immediately after the delivery of a baby), 565 died of hypertension complicating pregnancy, childbirth and puerperium, 261 of postpartum hemorrhage and 163 pregnancies led to abortive outcome.

Maternal mortality and its causes. The WHO describes maternal death as the “death of a woman while pregnant or within 42 days of termination of pregnancy, irrespective of the duration and site of the pregnancy, from any cause related to or aggravated by the pregnancy or its management but not from accidental or incidental causes.” According to a September 2010 UN fact sheet, most maternal deaths could be avoided. More than 80% of maternal deaths are caused by hemorrhage, sepsis, unsafe abortion, obstructed labor and hypertensive diseases of pregnancy. However, most of these deaths are preventable with access to adequate

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Philippines unlikely to meet MDG 5 target. As of September 2011, statistics of the Philippines' progress based on the MDG indicators, compiled by the National Statistics Coordinating Board, show that the country’s probability of achieving the target reduction in maternal mortality is low. According to National Economic Development Authority (NEDA)'s Jan. 2010 DevPulse development advocacy fact sheet, maternal mortality is rooted in poverty and lack of education. The DOH said maternal

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The last two minutes for reducing maternal mortality

poverty and poor education are associated with delays in seeking, reaching, and receiving appropriate care, the report cited. Over half of births occurred at home, and only a third was assisted by skilled birth attendants, it added. High fertility rates and high unmet need for family planning and poor nutrition of women also lead to poor pregnancy outcomes and infant deaths. “Data from the NSO have shown that having too many children and having them in close succession corresponds to higher infant, child, and maternal mortality rates,” according to the fact sheet. Similarly, the country has not been performing well in terms of contraceptive prevalence rate— from 40% in 1993 the rate only increased to 51% in 2008, according to NEDA's own “Philippines

Progress Report on the Millenium Development Goals 2010,” which also said that the 2015 target of 52 maternal deaths per 100,000 live births is unlikely to be met. (See graph below) According to the progress report, the DOH has shifted from a risk approach that focuses on identifying pregnant women at risk to one that considers all pregnant women at risk to develop complications. As a result, the DOH strategy will involve encouraging women to give birth in conveniently located health facilities that are equipped to provide basic emergency obstetric and newborn care, and implementing the Maternal, Neonatal and Child Health and Nutrition (MNCHN) Strategy, which involves a shift from health programs controlled at the national-government level to an

PHILIPPINE MATERNAL MORTALITY RATES, 1993-2006 250 209

203

200

197

191

186

180

172

162

150 100 52 50 0

1990

1991

1992

1993

1994

1995

1993-2008 data Current Rate of Progress

1998

2006

2015

Required Rate of Progress 2015 Target

Source: “Philippines Progress Report on the Millenium Development Goals 2010,” National Economic Development Authority, p. 116

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The last two minutes for reducing maternal mortality

integrated mother-and-child health and nutrition package administered at the localgovernment-unit level. Launched in 2008, the MNCHN Strategy aims to ensure that all pregnancies are wanted, planned, supported, and wellmanaged; deliveries are facility-based and managed by skilled birth attendants; and all mothers and newborns receive good postpartum and postnatal care. Private sector to help government achieve MDG 5. To reduce maternal deaths in the country and to achieve benchmarks for health conditions set in the MDG, the DOH, through the Bureau of Local Health Development, formed a multisectoral consortium called 162-52 Coalition, which encourages public-private partnerships to develop health interventions in priority areas in the country and deliver better maternal services. The coalition is the outcome of the Third Philippine Health Outlook Forum, held in December 2011. The forum, an annual activity of the Zuellig Family Foundation, brought government and private-sector stakeholders together to discuss the state of health in the country, and to form partnerships to address the health inequities. The lead convenors of the 162-52 Coalition include: Philippine Health Insurance Corporation; ZuelligFamily Foundation; League of Provinces of the Philippines; Union of Local Authorities of ]the Philippines; Dr. Jaime Galvez–Tan; Philippine Business for Social Progress; Ayala TBI/ACCESS Health Philippines; and Sanofi-aventis Philippines.

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The priority areas of the coalition comprise 20 provinces and the National Capital Region, which account for 42% of the population and 47% of the poorest families. These priority areas contribute 39% of the maternal deaths in the country. The coalition created a framework for action in developing interventions for the priority areas with three major components: • Leadership -- responsive local government units and support groups • Demand side – better-health-seeking behavior • Supply-side - accessible and affordable services, facilities, personnel, essential medicines and commodities To take part in the multisectoral effort, Smart Communications Inc developed Secured Health Information Network and Exchange (SHINE), a web- and mobile-based platform for use by health-care workers, for addressing the lack of interconnected health data, as reported in the Inquirer on May 12. SHINE uses mobile and ICT technologies to create electronic medical records for a convenient and efficient method of recording, storing and updating patients’ reports and consultations, based on the report. It might be the proverbial last two minutes for the country in terms of trying to achieve the Millennium Development Goal of reducing the maternal mortality ratio by 75% by 2015, but given that the “game” will not end in 2015, the continuing sense of urgency is somewhat warranted, if not actually welcome.

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NEWS ON THE NET Nation

Aquino vows full completion of CARP President Aquino said he and his administration is committed to the full implementation of the Comprehensive Agrarian Reform Program, adding that he is open to holding a dialogue with bishops and farmers. Aquino denied that he is avoiding the petitions of the stakeholders after the Hacienda Luisita case, saying that he has instructed Agrarian Reform Secretary Virgilio de los Reyes to engage in preliminary consultations with the concerned bishops and farmers. The President added that Congress might not be amenable to another extension of the Comprehensive Agrarian Reform Program Extension with Reforms (CARPER), thus he vows full completion of the program as soon as possible. The DAR began undertaking a mass processing of claim folders in all provinces to complete the remaining land acquisition and distribution balance.

Binay still most trusted official, says Pulse Asia The results of the latest Pulse Asia survey revealed that Vice-President Jejomar Binay continues to be the most trusted and most appreciated public

official in the country. Based on Pulse Asiaâ&#x20AC;&#x2122;s May 2012 Nationwide Survey on the Performance and Trust Ratings of the Top Five National Government Officials, Congress and the Supreme Court, From a selection of five top national officials, The vicepresident had the highest approval rating, from 81% of survey respondents, followed by Senate President Juan Ponce Enrile and President Benigno Aquino III, whose performance in office was approved of by 68% and 67% of respondents, respectively. Binay was also on top in terms of trust, with 78% of respondents trusting him, followed by the President with 65% and Senator Enrile with 62%. Deposed Chief Justice Renato Corona scored the lowest public approval at 12% and the highest disapproval rating of 60%.

Carpio among chief justice bets Acting Chief Justice Antonio Carpio has been nominated for the vacant chief justice position, on the basis of his being one of the five most senior Supreme Court justices. Carpio, the ex-officio chairman of the Judicial and Bar Council, has inhibited himself from its proceedings following his nomination. Also included in the list are Associate Justices Presbitero Velasco Jr., Teresita Leonardo-de

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Castro, Arturo Brion and Diosdado Peralta. Solicitor General Francis Jardeleza is also among the nominees for the position. Earlier, the President remarked that he is also considering appointing an outsider to the position. The Philippine Constitution provides no prohibition against such choice.

Congress crams to pass Amla bills The Senate Bicameral Conference Committee will finally reconcile two bills amending the current Anti-Money Laundering Act to prevent the Philippines from being on a blacklist of non-compliant countries that fail to meet the standards of the Europe-based Financial Action Task Force for checking money laundering activities. Senate Bills 3009 and 3127 are to be consolidated and reconciled with counterpart House Bills to ensure the new law is in compliance with FATF standards. SB 3009 proposes the allowance of ex parte court orders to open for 24 hours suspicious accounts without informing bank depositors, while SB 3127 proposes the criminalizing of terrorist financing. Should Congress reconcile the bills before the FATF convenes in mid-June, the Philippines will avoid inclusion on the FATF list of non-compliant countries.

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“I

t is an alarming feature of modern society: what we think in ‘our minds’ is the creation of a media elite. It is the deep anomaly of democracy: Yes, it is the rule of the people, whose minds though are manipulated, through media, by the ruling class. I tremble before this modern god called Media.” So said Philippine Daily Inquirer columnist and former Far Eastern Economic Review correspondent Rigoberto Tiglao in his June 6 article, “Anastasia, Flory Basa, Conchita,” on how, in his view, the Philippine press had, in his view, distorted truth.

Are You Media-Literate?

While some may dispute Tiglao’s view, the might of mass media to move or manipulate minds in the millions has been a global concern for at least half a century. Recounted in a timeline of its media education initiatives, the United Nations Educational, Scientific and Cultural Organization (UNESCO) has pushed media education since 1961 with a paper on film education, then a conference the following year, and full-fledged programs since the 1970s.

With the global information explosion, humanity must counter manipulation and master mass communication By Ricardo Saludo

STRATEGY POINTS Media literacy is crucial for full human development as well as the advancement of harmony, governance and democracy. Promoting critical thinking on media in Asia must contend with conformity and authority, plus the dominance of Western culture. Media must play a major role in promoting media literacy — including user instructions for citizens to use media intelligently.

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It wasn’t always that way. Massachusetts educator and columnist Bill Walsh’s “A Brief History of Media Education” counts four phases of how schools treated media. Before the 1960s, “educators ignored the media.” even confiscating newspapers brought to class. Then came the “inoculation” phase: teachers showed students samples of media to ridicule and disdain them.

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Are you media literate?

Afterward, schools used popular media to make classroom subjects more interesting, like showing parts of West Side Story before letting students read Shakespeare’s Romeo and Juliet, whose theme of lovers from feuding families inspired the 1950s hit Broadway musical. Finally came today’s phase of giving formal instruction for what is called media literacy, information literacy, or media and information literacy (MIL). Media literacy empowers. Succinctly defined. media literacy is “the ability to access, analyze, evaluate and create media in a variety of forms,” as noted by the Center for Media Literacy in Malibu, California. The Alexandria Declaration on Information Literacy and Lifelong Learning, adopted by UNESCO’s High Level Colloquium on the subject in Alexandria, Egypt, in November 2005, declared: “Information Literacy ... empowers people in all walks of life to seek, evaluate, use and create information effectively to achieve their personal, social, occupational and educational goals.” Quite simply, with so much of one’s personal, social, political and economic advancement determined by how well one can access and use information, including the crafting and dissemination of one’s messages to crucial entities like the government, MIL is an essential capability for human beings, as individuals, families, communities and nations, to function in the world, build

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harmonious and productive relations with others, and express and address one’s interests, needs and aspirations. In short, media and information literacy is indispensable for full human development. Two decades before the Alexandria colloquium, the January 1982 UNESCO conference of nineteen nations in Grunwald, Germany, laid the MIL groundwork. The International Symposium on Education in the Public Use of Mass Media produced the Grunwald Declaration on Media Education. It was followed another quarter-century later by the First International Conference on Media Education in the Middle East in March 2007 in Riyadh, Saudi Arabia, with both developed and developing nations represented. The problem and the solution. The Grunwald Declaration spelled out the problem and broadly pointed the way forward: “Rather than condemn or endorse the undoubted power of the media, we need to accept their significant impact and penetration throughout the world as an established fact ... Political and educational systems need to recognize their obligations to promote in their citizens a critical understanding of the phenomena of communication.”

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16 The 1982 communique recommended four broad strategies to promote media literacy: 1) Institute comprehensive media education programs, from pre-school to adult level; 2) Train teachers and intermediaries to better understand media and teach about it and 3) Stimulate research and development for media

education 4) Support international cooperation in media education. The declaration added: â&#x20AC;&#x153;Media education will be most effective when parents, teachers, media personnel and decision-makers all acknowledge they have a role to play in developing greater

WHAT FILIPINO YOU

Results of 2004 Survey of Students in the Philippine

Why do you like the media?

160

143

140 frequency

120 100 80

105 67 67

84 70 42

105

20 0

130 107

60 40

138

30 33 14

b ha

ti ill

d ore

ea ol

50 31

m hip fro ms ns o i m e p pis bl am ca pro s ch e

56 42 17

ea ol

n tio ca fi i nt ide

2 4

ers oth

How do the media portray violence? 140

Too Much

125

frequency

120 100

80 60

40 20 0

Not a cause for concern

85 57

31 10

NCR

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VISAYAS

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Are you media literate?

critical awareness among listeners, viewers and readers.” In short, promoting media literacy is the task of everyone: families, schools, and the media itself. The Alexandria Declaration enunciated similar strategies, along with “programs to increase the employability and

entrepreneurial capabilities of women and the disadvantaged.” It also stressed that “vigorous investment in information literacy and lifelong learning strategies creates public value.” ‘Survival literacies’ for the 21st Century. With today’s explosion of

THS THINK OF MEDIA

s percent of respondents who gave the listed answers

How do media portray sex? 140

129

120

Too Much 92

frequency

100 80 60

34 16

20 0

NCR

Not a cause for concern

LUZON

VISAYAS

MINDANAO

How do media portray Filipino values?

120 Promoted Well

frequency

100 80

Not Promoted Well

60 40

Lack of Values

20 0

NCR

LUZON

VISAYAS

MINDANAO

Charts from Claiming the Media: Responding to Hegemonic Media in a Consumerist World, published by Signis Media Education Project (2007), pages 20-22

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18 online media, the imperative to instruct Literacy; Media Literacy; Distance Education people in media literacy becomes even more and E-Learning; Cultural Literacy; and urgent and Information demanding. Literacy.” Critical thinking enables people Besides to make independent choices on inaccuracies, Media literacy, which media programming to take Horton bias and outright elaborated, and how to interpret information deception in “embraces ~ Professor Art Silverblatt traditional everything media, from having the those same failings are magnified and virally knowledge needed to use old and new media spread through the Internet. Highlighting technology to having a critical relationship this more complex challenge to media to media content in a time when the media educators is “The Role of Media Literacy constitute one of the most powerful forces in the Governance Reform Agenda,” a in society.” That means thinking before 2009 paper by former University of British believing and following what one reads, Columbia professor Johanna Martinsson, hears and sees. now with the World Bank’s Communication for Governance & Accountability Program. The challenge of critical thinking. At the Asia Media Summit 2012 in Bangkok on Martinsson said “today’s convergence of May 29-30, one session specifically discussed traditional and new media offers promising media literacy. Along with this writer, opportunities for inclusion, participation, “Building a Media-Literate Public” featured and transparency ... paralleled by challenges communications professor Kamolrat such as uneven access, misinformation, and Intrastate of Sukhothai Thammathirat exposure to harmful content” (page 3 in Bank Open University, Universities Islam Sultan study). Plus old problems with the press: Agung president Laode M. Kamaluddin “state control of media, commercial pressures, of Indonesia, Webster University lack of journalistic standards, watchdog civil communications and journalism professor society, poor media literacy” (page 4). Art Silverblatt, with Nathalie Labourdette, training head of the European Broadcasting For her list of traditional media issues, Union (EBU), as moderator. Martinsson cited a 2007 UNESCO paper, “Understanding Information Literacy: In his paper, “International Media and A Primer,” by international library and Informational Literacy A Conceptual information consultant Forest Woody Framework,” Professor Silverblatt Horton Jr., who has advised governments summed up the essence of MIL: critical as well as multilateral institutions. The thinking. “Media literacy,” he explained, University of Lausanne Ph.D. listed “survival “promotes the critical thinking skills that literacies” for the 21st Century family: enable individuals to make independent “Basic or Core functional literacy fluencies choices with regard to which media (competencies) of reading, writing, oralcy programming to select, and how to interpret [speaking] and numeracy; Computer the information they receive through the

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channels of mass communication.” Herein may lie the challenge for media literacy in Asia. With strong tendencies toward conformity and authority, as noted Silverblatt’s comparison of Western and Asian traits (on page 7 of his paper), Asians will need more prodding than Westerners to critically assess and question media, let alone assert their views against dominant perspectives. On top of this apparent submissive streak among many in the region, further obstacles to independent, critical thinking

and communication are authoritarian states and media controls in countries like China and Vietnam, and the dominance of Western media, which promotes news perspectives and lifestyle and entertainment icons that millions of Asians conform with or aspire to. Warning the world of Western media hegemony for decades has been Massachusetts Institute of Technology linguistics professor Noam Chomsky. Among his seminal discourses was his 1989 lecture at the University of Minnesota,

EDUCATING MALAYSIANS ABOUT MEDIA With state dominance in the schools and the press, civil society takes the lead in media literacy in Malaysia, collaborating with as well as critiquing government State

Media education obtain legitimacy and/ or hegemonic control

Business

Media education to commercial needs

Education Orientations Civil Society Organisations

Media education as critique of media and media-ted hegemonic culture

Academia

(i) Media education to prepare professionals for the industry (ii) Media education as critique New Movable Text

Civil Society State

State

Business

Business Civil Society

Media Education

Diagrams from Claiming the Media: Responding to Hegemonic Media in a Consumerist World, published by Signis Media Education Project (2007), pages 95, 113-114

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20 accessible in Part 1 and Part 2. Half an hour into the first half of his 2-1/2-hour talk, Chomsky observed how state efforts to manipulate the public mind often arises amid war.

Data and diagrams from the report are replicated in this article. A 2004 survey of Filipino students who received media education, showed more critical appreciation of media, including its portrayal of sex, violence and values (see What Filipino Youths Think of Media charts). Educators also surveyed cited lack of media education knowledge, low public interest, and poor logistics as main hindrances. Notably, only this school year did state schools begin teaching media literacy.

And in the second part, about 40 minutes from the start, the MIT savant explained how the widely reported 2 million Cambodians killed by the Khmer Rouge was grossly inflated from a body count â&#x20AC;&#x153;in the thousands.â&#x20AC;? Moreover, Washington suppressed the same State Department data, said Chomsky, along with reports of similar carnage in East Timor, invaded by U.S. ally Indonesia.

Thailand had similar challenges, plus high turnover among trained teachers and little interest among education

In his 1989 Minnesota talk, MIT professor Noam Chomsky warns of global dominance by Western media giants YouTube

Media literacy in Asia. So how well is Asia teaching its citizens to be medialiterate? A key resource is Claiming the Media: Responding to Hegemonic Media in a Consumerist World, a 2007 seminal study by the Signis, the World Catholic Association for Communication, which groups Roman Catholic media professionals and entities. Through research, reporting and surveys, the 260-page tome assessed media literacy initiatives in the Philippines, India, Malaysia, Thailand, Fiji and the Solomon Islands.

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policymakers, reflecting public disinterest. In Malaysia, meanwhile, state dominance in media and education limits government efforts to promote critical thinking. Hence, civil society plays a big role in media literacy, both working with and critiquing the state (see Educating Malaysians About Media diagrams). If things look tough in some countries, India offers hope. By 1997, two decades after it began with a Catholic communications center in Hyderabad in 1976, media

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BUILDING A CITIZENRY OF CRITICAL THINKERS Recommendations from 2009 World Bank Paper on Media Literacy Support Media Watchdog Groups/Media Observatories • Promote media monitoring projects and networks to the larger development community. • Encourage monitoring and steer the focus toward issues on the governance reform agenda. • Publish and promote media monitoring results to increase awareness and educate citizens about current media processes and practices. Promote the Role of News Ombudsmen • Build awareness about the role of news ombudsmen and how they can help strengthen accountability. • Encourage citizens to utilize the news ombudsmen function by actively providing feedback. • Encourage and support forums for the news ombudsmen to educate citizens about media practices. Build Media Literacy Skills through Mobilization, Forums, and Debate • Promote public forums to encourage dialogue among different actors, including regulatory authorities, associations, educators, citizens, and media professionals. • Encourage other actors in the public sphere, such as regulatory authorities and associations, to heighten public awareness about media literacy, laws, and regulations. • Involve citizens in discussions about codes of conduct to raise awareness and to ensure that codes are followed. • Build capacity of civil society organizations on media literacy. • Encourage joint citizen/media projects, such as investigating reporting. • Publish forum discussions and make them accessible to the public. Promote Media Literacy as Essential in Media Development Programs • Heighten awareness about the crucial role media literacy plays in development practice through seminars, knowledge products, and other collaborative efforts among development practitioners. • Support activities to educate citizens about laws and benefi ts of a free, plural, and independent media system. • Encourage knowledge sharing and cooperation among development practitioners on media literacy initiatives. Support Research on Linkages among Media Literacy, Citizen Action, and Good Governance • Support research activities, including workshops, to discuss and share good practice and identify knowledge gaps for further research. • Encourage cooperation between academia and development practitioners to establish linkages among media literacy, good governance, and citizen activism. • Support activities to measure impact of current media literacy initiatives in media development projects. Source: “The Role of Media Literacy in the Governance Reform Agenda,” by Johanna Martinsson, Communication for Governance and Accountability Program, World Bank (2009), pages 8-10

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Are you media literate?

GUIDING THE PEOPLE

Results of Media Educators Survey in India Years of Experience in Media EducationEducation

Less than 3 years, 14% 3-5 years, 14%

More than 7 years, 54%

5-7 years, 18%

Training Background of Educators 100 90 80 60 50 40 30 20 10 0

54 32

29 4

formal training

informal training

self trained

no training

Charts from Claiming the Media: Responding to Hegemonic Media in a Consumerist World, published by Signis Media Education Project (2007), pages 79-80

education was flourishing. Educator Peter Gonsalves recounted: “Today the urgency is more pronounced, and the need is being recognized by all — educators, youth leaders, and social workers.” And most media educators surveyed said they had many years of training and teaching experience (see Guiding the People charts above).

carrying media literacy messages in print, broadcast and online media. These user instructions would make people more thoughtful just when they are using media, with messages like: Know the news source. Different views enrich understanding. In conflicts, listen to both sides.

Perhaps the one missing MIL player in Asia and elsewhere is media itself, and recommendations from the World Bank paper (see previous page) include several for media. This writer adds one more:

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News carrying such reminders would actually gain credibility and good will. More important, it will advance the very truth and fairness that is the media’s mandate. Do it now — before politicians decide there ought to be a law on it.

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encouraged to enter the world of commerce, entrepreneurial activity was largely confined to women who were already independently wealthy. An estimated $11.9 billion dollars is held by women, primarily in bonds and bank accounts, according to asset managers Al Masah Capital. Founder and General Manager Maria Mahdaly of media and publishing house Rumman Company feels she is benefiting from the changing attitudes in her Islamic country CNN

Saudi Arabia softens cultural restrictions on women The Kingdom of Saudi Arabia has started to recognize that women have a part to play in its economic development. King Abdullah signaled in 2011 that women will have the right to vote in the 2015 local elections, and be appointed to the Shurah Council, the most influential political body in the country. He has since allowed women to work in lingerie shops and enter sports stadiums. These legislative changes paved the way for a new generation of young entrepreneurs, like Maria Mahdaly, founder and general manager of Saudi Arabia’s fastest growing start-up company in 2010. She feels that she is benefiting from changing attitudes saying that they get a lot of support from other businesses, the media and individuals in general. Research conducted by the University of Aberdeen doctoral candidate Sophie Alkhaled showed that while Saudi women were increasingly

Russia, China to strengthen trade ties Leaders of power countries Russia and China laid out ambitious plans last week for a closer strategic and economic partnership. Russian President Vladimir Putin and Chinese President Hu Jintao set a goal of increasing bilateral trade from $83.5 billion last year to $100 billion by 2015 and $200 billion in 2020. The ambitious target was announced together with a slew of investments and trade deals, including a joint venture for the development of long-range civilian aircraft, and the Russia-China Investment Fund for timber, logistics, agriculture, ports, or infrastructure. The New York Times called the Russian-Sino tie as “partnership of convenience.” For Russia, partnership with China serves multiple purposes. It counterbalances the strategic and normative dominance of US. While the partnership is said to help legitimize Putin’s domestic and foreign policies, the partnership for China is more preventative. China wants to ensure a good relationship with Russia as a neighbor nation and avoid a spoiling and destabilizing presence in northeast Asia. China wants to preserve the principle of national sovereignty against Western-led moral

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universalism and “interference” in its domestic affairs.

World Bank sees looming global garbage crisis On the occasion of World Environment Day on June 5th, the World Bank warned that the world’s city dwellers are fast producing more and more trash, in a “looming crisis” that is said to result in huge financial and environmental burdens. Billing the report, What a Waste: A Global Review of Solid Waste Management, as the first comprehensive look at trash, urban specialists said the growing pile of trash from urban dwellers is as daunting, as global warming and the costs will be especially high in poor countries, mainly Africa. The WB estimated city dwellers will generate a waste pile of 2.2 billion tons a year by 2025, up to 70% from today’s level of 1.3 billion tons. In the meantime, the cost of solid waste management is projected to soar to $375 billion a year, from the current $205 billion. The World Bank called for better waste management and recycling to combat greenhouse gas emissions. It said the old concept of “throwing away” trash no longer works. The report’s authors recommended a wastemanagement plan that includes input from all of a city’s stakeholders, including citizen groups and the poor and disadvantaged. The report also pointed to recycling and other measures to reduce greenhouse-gas emissions that come from inefficient solid-waste management practices.

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Energizing the Bottom Line With investments in infrastructure, power and energy, San Miguel Corporation reinvents itself thoroughly By Joanne Angela B. Marzan

The new San Miguel has arrived.

STRATEGY POINTS San Miguel’s diversification has taken the company into power and energy, along with infrastructure, mining, and telecommunications Its buy-in into Meralco was only the most publicized move in its drive to become a vertically integrated power company The company’s ambitious plans have raised both business and anti-trust policy concerns

This was boldly announced by San Miguel Corporation’s top management in its 2010 annual report. “Having held market-leading positions in the domestic food, drinks and packaging sectors for over the last 100 years, our twelfth decade ushered in a ‘new’ San Miguel, as we firmed up our power, mining, oil refinery, infrastructure and telecommunications holdings—businesses where we believe there is huge unmet demand, and a wealth of opportunity to match,” said the report. Leading the pack of San Miguel’s new businesses is power. According to the company website, “San Miguel has built a vertically integrated power company with a full spectrum of power businesses.” First on the list of power businesses is SMC Global Power Holdings, Inc., a subsidiary tasked to negotiate Independent Power

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Producer Agreement (IPPA) contracts. At present, SMC Global Power has under its belt three IPPA contracts: • 1,000-MW Sual coal-fired thermal power plant This power plant located in Sual, Pangasinan is the largest coal-fired power plant in the Philippines in terms of installed capacity. • 1,200 MW Ilijan natural gas-fired combined-cycle power plant This Batangas City power plant is supplied with gas coming from the Malampaya field in Palawan by the National Power Corporation (NPC) • 345 MW San Roque multipurpose hydroelectric power plant Located in San Manuel, Pangasinan, this power plant is powered by the Agno River. Meanwhile, according to its 2011 annual report, SMC Global Power generated 14,483 thousand mwh of power, resulting

in revenues of more than P71 billion and operating income of P16.7 billion, making it “one of the largest power companies in the country.” New investments needed. The timing of San Miguel’s investment in the power sector couldn’t be more opportune. For according to Merrit Partners Chairman Vince S. Perez, in his 2010 presentation, Philippine Renewable Power Sector: Prospects and Challenges, new players are needed in the power-generation sector. According to the former Energy Secretary, by 2017, the electricity market will need an additional 4,100 MW: 3,000 MW in Luzon, 500 MW in Visayas and 600 MW in Mindanao. However, while highlighting the demand in the electricity market, he advocates the utilization of renewable energy, as opposed to fossil fuels such as coal, to meet the demand. For his part, David Berry of Western Resource Advocates is uncertain if coalfired power plants will continue to thrive in the future.

Source: Philippine Renewable Power Sector: Prospects and Challenges

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26 In his 2008 paper, Investment Risks of New Coal-Fired Power Plants, he discussed the challenges that face investors in the coalfired power plant industry. “The preeminent concern is recovery of costs. Cost recovery is perceived as more certain in regulated markets than deregulated markets, though the level of certainty depends somewhat on the regulators. Costs considered (particularly in deregulated markets) include construction costs, fuel costs, and air-pollution-permit costs, as well as the ability of the power generator to sell the power,” explained Berry. Berry also predicted stricter legislation against coal-fired power plants in the United States beyond 2009 may result in a bleak future for this industry. He added that the issue of “climate legislation” deterred the further expansion of coal-fired power in the U.S. SMC Global Power, however, is undaunted. In fact, it has proposed to construct six additional coal-fired power plants. In Luzon, two power plants were proposed: a 1,200MW coal plant in Cavite and a 600-MW coal-fired facility in Bulacan. In Visayas, it proposes a 600-MW coal plant in Leyte and a 150-MW coal plant in Panay. In Mindanao, coal-fired power plants have been proposed in Davao del Sur (300-MW) and South Cotabato (150-MW). As reported in an April 9 Manila Bulletin article, SMC Global Power received approval from the Department of Energy to begin its grid impact studies (GIS) on these power projects. Should all of these projects get approved, the company’s powergeneration portfolio would increase by as much as 3,000 MW.

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The report added a caveat, though. Should all of these projects push through, SMC Global Power may be in violation of Section 45 of Republic Act 9136, or the Energy Power Industry Reform Act (EPIRA), which states, “No company or related group can own, operate or control more than thirty percent (30%) of the installed generating capacity of a grid and/or twenty-five percent (25%) of the national installed generating capacity.” As written in the law, these safeguards were crafted in order to prevent “harmful monopoly and market power abuse.” The combined capacity of the three IPPA contracts is 2,545 MW, equivalent to a 23% market share in the Luzon grid and 17% in the national grid, which would put SMC Global Power 7% shy of the Luzon grid capacity threshold, and within 8% of the limit for the national grid. San Miguel in mining. Another area of business contributing to the growth and success of SMC Global Power is San Miguel’s investment in mining. Since SMC Global Power utilizes coal in most of its power plants, the much-needed raw materials for generating power come from San Miguel’s mining assets. According to the company website, San Miguel Energy Corporation (SMEC) has a total of 17,000 hectares of coal resources coming from its three mines. In 2010, SMEC acquired the Daguma Agro Minerals, Inc. and Bonanza Energy Resources, Inc, both located in South Cotabato, for $25 million. Shortly thereafter, SMEC bought Sultan Energy Phils., located in Sultan Kudarat, for $14.5 million. According to 2005 data coming from Department of Energy, the country’s coal

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reserves amount to 458 million metric tons. This means that as of 2005, the country was using about 18% of the country's total coal resource potential of 2.53 billion metric tons. Stake in Meralco. The third leg of San Miguel’s power business is its 33.19% stake in Meralco, which provides the company with a power-distribution arm in Metro Manila. Additionally, Meralco provides San Miguel an “advantage over pure generation companies on supply-demand fundamentals,” the company said in the 2010 annual report. “Being a vertically integrated power company gives SMC the opportunity to compete and maximize value in key segments of the value chain by driving and capitalizing on synergies in fuel sourcing, power generation and power distribution,” it explained. San Miguel in infrastructure and telecommunications. In recent moves that have not been as widely publicized as its buy-in into Meralco, San Miguel has also ventured into infrastructure and telecommunications. According to its website, San Miguel currently has three big projects on its plate: • Administrator of the 88.5-kilometer two-lane Tarlac-Pangasinan-La Union Expressway tasked to “provide management services, toll collection, traffic safety and security management, toll road maintenance and other related services.” • When San Miguel acquired 51% interest in Universal LRT Corp. Ltd., the company became the developer of the 22-kilometer

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rail line Metro Rail Transit Line 7, which is supposed to stretch from San Jose del Monte, Bulacan, to North Avenue in Quezon City. • Modernization of the Caticlan airport, with SMC owning the concessionholder of the airport, TransAire

Is San Miguel spreading itself too thinly? In May 2011, according to an ABS-CBN report, Standard & Poor’s downgraded San Miguel Corporation’s credit rating from stable to negative due to its heavy investment in diversification plans, thereby “depleting its cash reserves” and lowering its chances to repay its debts. "We are revising the outlook based on our opinion that San Miguel's already-aggressive financial risk profile will continue to deteriorate if its financial leverage does not improve over the next six to 12 months," said S&P credit analyst Allan Redimerio. The report also said that San Miguel (SMC) requested that Standard & Poor’s withdraw its rating, which the credit-rating company did. A year later, business columnist Boo Chanco, in his May 28 Philippine Star column, is also raising alarm bells over San Miguel’s ambitious diversification plans. With its aggressive acquisition of new companies, one has to wonder where the funds are coming from. “RSA [Ramon S. Ang] told me not to worry about funding all these big ticket projects because their credit is good. ‘SMC has enough credit lines,’ RSA said. But I have heard murmurs that San Miguel has exhausted its single borrower limit with all the major Philippine banks. If he is to borrow abroad, the unsettled world financial market may affect his ability to borrow from foreign institutions,” disclosed Chanco. Also according to Chanco, even if SMC hits $20 billion in gross revenues this year, Philippine Airlines (PAL) and the infrastructure projects “will eat up a lot of cash in the short term and won’t contribute to the bottom line for quite a while.

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28 Development Holdings Corporation. The modernization project would include “construction of a bigger airport passenger terminal, extension of the existing runway from 950 meters to 2,100 meters, improvement of the road network and upgrading of airport facilities and air traffic control aids.”

the concession holder and operator of the Skyway toll road from Makati to Alabang. According to a December 11 report in the Philippine Daily Inquirer, SMC acquired a 46% stake in Atlantic Aurum, Inc. (AAI), a subsidiary of the Citra Group, one of the biggest infrastructure companies in Indonesia.

Just recently, San Miguel, through Citra Metro Manila Tollways Corp., and Metro Pacific Tollways Development Corp., which is owned by Manuel V. Pangilinan, are both competing over a project that would connect the North Luzon Expressway (NLEX) to the South Luzon Expressway (SLEX).

A month later, a January 11 Inquirer report said that San Miguel and Citra through AAI acquired MTD Bahrain, the owner of 80% of the South Luzon Tollway Corp. , the concession holder of SLEX. MTD Bahrain is an offshore company owned by MTD Berhad, a Malaysian company.

Pangilinan’s company is the toll administrator of the NLEX while Citra is

The report also added that San Miguel and CITRA would jointly invest about

A matter of (anti-) trust

Meanwhile, a March 2010 paper, New Ventures, Same Results: The Case of the Philippines’ Diversifying San Miguel Corporation by Rowena Soriano and JaysonCainglet published by the Agribusiness Action Initiatives- Asia (AAI-Asia), believes that the massive investments of a single company in the key agriculture sectors and vital industries in the country has become “alarming.” “As it now stands, San Miguel Corporation is on commanding height in both the agriculture and industrial sectors, including vital facilities such as power distribution and oil retailing. This is perhaps the first time that a conglomerate has such market power and influence in key industries of a particular country,” the authors observe. For its part, SMC defends its diversification strategy and said in the report that it has “no choice.” “It is a tougher world, so SMC has no choice but to reinvent itself. This is the reason for the decision to

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diversify. We are the leader in the food and beverage market, but we have to expand and diversify as these have become slow-growth markets,” said San Miguel Corporation vice president for Corporate Affairs Ramon Santiago, in a private interview. He added, “If you already control 95 percent of the market, how else would you grow? From this perspective, it makes business sense to diversify out of the slow-growth business and saturated market to faster-growth industries.” The authors qualify that the company “never claimed that they are doing this for the public good, but simply as a matter of ‘good business’ sense.” Having said that, however, they also point out that San Miguel controls 40% of the local poultry market and 66% of the processed-meat market, so if it ever decided to stop its poultry-production and processedmeat businesses because it no longer made business sense, the potential impact would be disastrous for

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₧64.5 billion in more road projects linked to the Southern Luzon corridor. In fact, according to the report, AAI has already initiated talks with the concessionaire of the Southern Tagalog Arterial Road, which connects Lipa to Batangas City.

it also acquired a stake in Eastern Telecommunications Philippines, Inc.

Meanwhile, San Miguel’s fledgling telecommunications business is anchored on Liberty Telecommunications Holdings, Inc. According to the company website, in order to boost this new business further, it acquired Bell Telecommunications Philippines, which would “give San Miguel entry into the wireless voice, data and video connectivity business, expanding the scope of the company’s telecom offerings.” In December 2010, it strengthened its telecommunications portfolio when

‘Healthy outlook on change.’ In an interview in the 2010 annual report, San Miguel Corporation President and COO Ramon S. Ang said that San Miguel’s success is attributed to the company’s “healthy outlook on change.” “Over the last 12 years, we’ve done things right, we’ve made some missteps and we’ve adjusted as needed… And that’s because we have enough pride in ourselves and our organization to have the courage to constantly strengthen, refine and change strategies when it’s clear that they are not delivering the results we know our shareholders have come to expect from us, or if there’s simply a better way to do things,” Ang said.

subcontracted producers, suppliers, resellers, and vendors. According to the authors, San Miguel controls 20% of the local flour market and 33% of the commercialfeeds market, so if the company ever decided to discontinue its contracts with corn farmers or cassava producers because it might be easier for them to import corn or flour, that too would be disastrous for the local market. They also point out that San Miguel’s acquisition of Petron Corporation gives it 40% of the oil-industry market, while the government has been “helpless to do anything about the seeming collusion among the oil companies who have been accused of predatory pricing.” They also point out that as San Miguel has become a major player in power generation and electricity distribution, while the government remains helpless in the face of power rate increases.

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The authors call for the issues of fair pricing, fair competition, and consumer protection in the energy, power or even the telecommunications sector to be addressed by government, with or without the entry of San Miguel in these sectors. They point out that “Regulatory and competition enforcement is spread through several agencies that do not operate in a coordinated manner and sometimes produce (wittingly) conflicting policies,” and call for a comprehensive competition policy, given that “current laws have been proven inadequate or ineffective to prevent anti-competitive structures and behavior in the market.” As they put it: “Competition has neither been fully established in all sectors of the economy nor has existing competition been enhanced in other sectors. Thus, the Philippine economy continues to be dominated by few families/groups of businesses with substantial market power and political influence, as proven by the diversification efforts of San Miguel.”

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The Eurozone Crisis and Asia

How can the region’s economies weather Europe’s ongoing storm? By Marishka Noelle M. Cabrera

STRATEGY POINTS Asia’s trade and financial linkages with Europe make the region vulnerable to uncertainties in the eurozone Strengthening domestic demand and investing in productivity increases are crucial in minimizing the impact in Asia

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ith less than a week to Greece’s June 17 elections, the pressure is mounting. If a new government emerges and rejects the terms of Greece’s bailout program, the country might eventually exit the euro. Standard & Poor’s says there’s a one-in-three chance that it might, CNN reports. And in yet another blow to the struggling 17-nation eurozone region, Spain is expected to seek financial bailout due to a worsening banking crisis, making it the fourth nation to seek international rescue

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after Ireland, Portugal, and Greece. A news release from Eurostat shows the country as having one of the highest increases in its unemployment rate, from 20.7% to 24.3% in April. CNN reports the unemployment rate in the euro zone hit 11%, a record high, in April, from 9.9% last year, as employers cut 110,000 jobs. The report adds in the broader 27-member European Union (EU), the unemployment rate climbed to 10.3% in April from last year’s 9.5%, making it the highest EU unemployment rate based on records since 2000. With no apparent end in sight, events in the eurozone are fueling anxiety over the possible spillover to the world’s economies, including Asia’s. Crisis in the West could find its way to Asia’s shores. The vulnerability of Asian economies, particularly those in emerging East Asia, lies in the magnitude of the region’s trade exposure and financial links to both the euro zone and the U.S., Lei Lei Song, senior economist of the Asian Development Bank (ADB) Office of Regional Economic Integration, explains in a December 2011 podcast. He points out policymakers can make a difference if they respond correctly and decisively, as they did in the global financial crisis that began in the U.S. in 2008. In a 2010 presentation at the 10th anniversary of the Oxford University AsiaPacific Society, ADB president Haruhiko Kuroda discussed the elements that “underpin Asia’s relatively robust economic position.” First, at the time of the U.S. subprime mortgage crisis, the region’s

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The mighty West’s unemployment woes Eurostat estimates around 24.67 million are unemployed in the EU, of whom some 17.4 million live in the euro area. The report notes the highest increases in the unemployment rate were also observed in Greece (from 15.2% to 21.7% between February 2011 to February 2012) and Cyprus (from 7.1% to 10.1%), while the biggest drops were seen in Estonia (from 13.6% to 10.8% between the first quarters of 2011 and 2012), Lithuania (from 16% to 13.8%), and Latvia (from 16.8% to 15.2%). On the other hand, hiring in the United States slowed down, with only 69,000 jobs added in May. The Bureau of Labor Statistics says the unemployment rate was essentially unchanged at 8.2%. Employment increased in the areas of health care, transportation and warehousing, and wholesale trade, but declined in construction. With a fragile recovery underway, Americans are wary of taking risks in the job market. A Bloomberg article says, “Spooked by the severity of the recession and stuck with underwater home mortgages, Americans are less inclined to leave their jobs and less willing to strike out on their own to build businesses, government data show.”

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banks held very little “toxic assets.” Second, Kuroda says, Asia has learned well from its own crisis in 199798 -- financial systems were well-capitalized, budgets well-managed, and foreign reserves were the highest in the world by the time crisis hit. Lastly, the easing of monetary policies and timely fiscal stimulus revived regional growth.

‘Export growth has lost momentum across the region, for both electronics and nonelectronic goods’ ~IMF regional

economic outlook

Implications of a spillover. This time around, however, can Asian economies still weather the renewed crisis? A May 2012 working paper from the Overseas Development Institute in the United Kingdom analyzes the likely implications of a spillover of the eurozone crisis on developing countries. The think tank on international development and humanitarian issues finds that the countries likely to be more at risk from the eurozone mess are those which: have a significant share tof their exports belonging to the crisis-affected nations; export products that have high income elasticities; are dependent on remittances, cross-border bank lending, foreign direct investment, and aid from European countries, and; have limited policy room to counter the effects of the crisis. To be sure, political uncertainties and the further slowdown of European economies will continue to threaten Asia’s economic stability. After all, along with the U.S. and Japan, the EU accounts for over 40% of

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the region’s direct export shipments, but “an estimated 60 percent if intraregional trade linked to production networks is taken into account,” based on data from the World Bank report, “Capturing New Sources of Growth.” In addition, European banks make up a third of trade and project finance in the region.

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Meanwhile, a regional economic outlook from the International Monetary Fund (IMF) notes growth in Asia slowed in the last quarter of 2011, mainly because of weakening external demand. “Export growth has lost momentum across the region, for both electronics and nonelectronic goods,” the report adds, “Weak exports and supply shocks have taken their toll on industrial production across Asia.” The IMF also cites two other risk factors: a hard landing in China, which, in this scenario, will likely have “substantial trade and financial spillovers to the region, especially Hong Kong SAR, Indonesia, and Singapore,” and higher commodity prices when geopolitical tensions “push oil prices sharply higher given low global inventories and spare capacity.” Asia needs to be ready. As a whole, the region needs to be ready in case a major economic disruption occurs through its financial and trade channels. “Asia will have to constitute its own growth pole,” says economics professor Jeffrey

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Sachs of Columbia University during the 45th annual meeting of the ADB Board of Governors held in Manila in May. But because of Asia’s diversity, the different sub-regions face unique challenges and priorities. As such, an ADB 2012 monograph, “How Can Asia Respond to Global Economic Crisis and

Transformation?,” discusses the areas where these sub-regions are likely to focus on.Trade and financial integration catch the attention of East and Southeast Asia. For South Asia, “boosting productivity and moving to higher value production and services, while ensuring adequate employment opportunities” will be prioritized. Central and West Asia face the challenges of “economic diversification and

The eurozone’s rise and fall On January 1, 1999, the euro was born. Europe’s single currency was designed to link European nations for “trade and political purposes,” and to bring price stability, trading benefits, growth, and prosperity. A CNN article with accompanying video charts the rise and fall of this symbol of European integration. The single currency was bound to fail, Harvard economics professor Martin Feldstein argues in an article in the Spring 2010 edition of The International Economy, and adds that the crisis in Greece and debt problems in Spain have exposed the euro’s “inherent flaws.” The shift to a single currency, he says, caused individual member countries to lose “the ability to control monetary policy and interest rates in order to respond to national economic conditions.” Moreover, the single currency “weakens the market signals that would otherwise warn a country that its fiscal deficits were becoming excessive.” “The euro crisis is the product of the interaction among several underlying forces,” the International Monetary Fund’s World Economic Outlook 2012 explains. These forces include: mispriced risk, macroeconomic policy misbehavior over many years, and weak prudential policies and frameworks. “The Stability and Growth Pact was devised to bring about fiscal discipline but failed to forestall bad fiscal policies,” the report reveals, “Markets became increasingly integrated, with enormous crossborder bank lending, but supervision and regulation remained at a national level.” A Congressional Research Service report outlines four major economic challenges for the euro zone. The first challenge involves concerns over high levels of public debt in euro zone countries and whether these countries will default on their debt. The second has to do with ongoing concerns about the crisis, thereby triggering capital flight from banks in some euro zone countries. The third challenge involves the lack of growth and increasing unemployment, especially in the euro zone periphery. Lastly, persistent trade imbalances developed in the euro zone in the last decade make the euro zone vulnerable to financial crises.

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overcoming geographic constraints through greater and efficient connectivity.” Lastly, economies in the Pacific“face unique challenges of balancing growth, while adapting to and mitigating climate change.” With the U.S. and the euro zone facing “a prolonged era of structural weakness due to poor economic fundamentals,” the ADB report reminds Asia of its renewed challenges: shifting to a more balanced model; improving regional financial arrangements to strengthen its resilience against external shocks; and ensuring that its growth trajectory is both sustainable and inclusive. “Financial policies are critical to increasing Asia’s resilience to further volatility in global financial conditions,” the IMF regional outlook adds, “In the event of a sharp European deleveraging, governments should be ready to combine

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monetary and fiscal policies with a range of measures aimed at stabilizing financial systems.” Look for new sources of growth. The World Bank report suggests, “The best prospects for the region to maintain high rates of growth, job creation, and poverty reduction are through rebalancing towards domestic demand and investing in productivity increases and further international integration.” East Asia’s continued growth rates, for example, will have to be less dependent on an exportoriented model. Some countries may have to stimulate household consumption to sustain growth, while some governments may have to invest more in, say, infrastructure, to be able to add to economic activity and create jobs. In the medium term, the report says “higher investment will enhance productivity and drive growth by facilitating

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World competitiveness in 2012 In the World Competitiveness Scoreboard found in the World Competitiveness Yearbook 2012 of the Switzerland-based Institute for Management Development, the most competitive economy is Hong Kong, followed by the United States and Switzerland. Included in the top ten are Singapore (4th), Taiwan (7th), Germany (9th), and Qatar (10th). Of the 59 economies surveyed, the Philippines ranked 43rd. Indonesia is one notch higher at number 42, while Malaysia and Thailand are ranked much higher, at number 16 and 30, respectively. Korea is 22nd, surpassing China (23rd), New Zealand (24th), Japan (27th), and France (29th). Venezuela ranked 59th. Among troubled eurozone countries, Greece placed 58th, Ireland was 20th, Spain was 39th, while Portugal was 41st. Individual economies are assessed according to economic performance, government efficiency, business efficiency, and infrastructure. Economic performance includes a country’s domestic economy (its size, growth rate, wealth, forecasts), its position in international trade and investment, employment rates, and prices. Government efficiency is measured by the country’s state of public finance, fiscal policy, institutional framework, business legislation (openness, competition and regulations, labor regulations), and societal framework. Business efficiency is measured by productivity and efficiency, the country’s labor market, finance (bank efficiency, stock market efficiency, finance management), management practices, and the attitudes and values. Basic, technological, and scientific Infrastructure are assessed, as well as health, environment, and education.

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a shift to higher value-added activities and more innovation.” And with weak demand from traditional markets in advanced economies, the ADB report recommends rebalancing sources of growth toward domestic and regional markets with regional cooperation and integration at the heart of the process. Moreover, it would bode well for Asia to expand its ties with Latin America and Africa. Above all, inequality should be addressed. Kuroda believes in the

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resilience of Asian economies. In an ABSCBN News report on the 2012 ADB annual meeting, Kuroda says the Asia-Pacific region is “expected to maintain its growth momentum this year,” so it becomes more imperative that progress trickles down to the poor and that the perennial problem of inequality is addressed. The ADB maintains that no matter the global economic climate, the real and pressing challenge for Asia is sustaining economic growth and balancing it with social, environmental, and developmental policy for the welfare of its citizens.

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NEWS ON THE NET Business

Boost in foreign investor confidence seen after Corona conviction Property experts in the Philippines are optimistic that the Senate impeachment court’s finding former Chief Justice Renato Corona guilty of betrayal of public trust will be highly beneficial to the local real estate sector. In general, experts who were interviewed perceived the political will of President Aquino to achieve transparency and accountability, and the removal of misfits from public service, as primary factors for the positive outlook. For Enrique Soriano, Ateneo program director for real estate and senior adviser for Wong and Bernstein Business Advisory, the conviction is medicine for the property sector. Soriano said the impact of the conviction will be significant to foreign property investors eyeing the Philippines as a viable choice for their investments. David Leechiu, country head of Jones Lang LaSalle Leechiu, said the conviction is interpreted by foreigners as the possible beginning of true, sustainable reform in the country. For Liz Silvestre, associate director of CBRE Philippines Investments and Capital Markets, the trial and verdict will have a great positive impact on the positioning of the Philippines as a sound real estate investment destination. Silvestre added that with continuing positive economic and political indicators, capital markets will remain on a general uptrend. In recent initiatives to boost the economy, Canadian and German entrepreneurs in business and knowledge-process outsourcing are being urged by the Philippine government to do business in the country, now that there is high foreign investor confidence. In separate

events, Philippine ambassadors to Germany and Canada urged businessmen in Germany and Canada to invest in the Philippines.

activists, has called on the government to ensure that mechanisms would be in place to benefit tobacco farmers as well as the poor. The group has also said that higher sin taxes in 2012 are needed in order to avert a severe health crisis

Mixed reactions on House OK of ‘sin’ Philippines up 20 tax measure notches in business The House of Representatives destination ranking passed the sin tax reform bill of the House Bill (HB) 5727 as it adjourn its Second Regular Session last week. Once enacted into law it aims to increase excise taxes on “sin” products made from alcohol and tobacco and to allocate a portion of revenues to the state health care program. It is seen to raise ₧31.35 billion in additional revenues, and has been also been cited as a consideration for a credit rating upgrade.

However, the passing of the bill was met with different reactions. Some welcome the revenue measures, while others claim the bill is discriminatory. Makati Business Club Executive Director Peter Angelo Perfecto said that they welcome continuing progress towards crafting a sin-tax bill that will generate more revenues, particularly for the government’s health program. But Hubert d’Aboville, president of the European Chamber of Commerce of the Philippines, said that they cannot be satisfied with the approval of the amended version of the bill because it is not compliant with the WTO ruling. Rather than simplify the excise tax on alcohol and tobacco products, there will be a three-tier tax rate system for distilled spirits and a two-tier tax rate system for wines, fermented liquors and tobacco products. Now that President Aquino has certified the "sin" tax reform bill as urgent, Action for Economic Reforms, a non-government organization composed of progressive scholars and

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The Philippines has improved its standing as a business destination among 132 countries based on the World Economic Forum’s “The Global Enabling Trade Report 2012.” The country climbed 20 notches up the trade index, from its previous 92nd place in 2010 to 72nd in 2012 in terms of market access, reflecting what was perceived as reduction in trade barriers. In particular, the Philippines showed remarkable improvement in the area of market access, where it jumped 50 notches to No. 14 from No. 64 in 2010. The country, the Report said, has also shown improvement in terms of efficiency of import-export procedures, where it ranked 48th, up from 55th in 2010. The report measures the factors, policies and services that facilitate the trade in goods across the borders of 132 countries, including the areas of market access, border administration, transport and communications infrastructure, and business environment. Meanwhile, according to the World Competitive Yearbook rankings of 2012, the Philippines dropped to 43rd out of 59 economies surveyed by IMD, a Switzerland-based international business school, down from 41st the year before. The survey consists of 329 ranking criteria, one-third of which comes from an exclusive survey of 4,200 international executives.

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