Business
B3
TUESDAY, NOVEMBER 15, 2016 extrastory2000@gmail.com
Why ODA donors require counterpart funds
CONTAINER FREIGHT STATION. Subic Bay International Terminal Corp. opens its dock container freight station at the New Container
Terminal 2 of the Subic Bay Freeport in Zambales province, making it the first and only facility of its kind in Central Luzon. The CFS has an initial storage capacity of 840 square meters, which can be expanded to a maximum of 1,860 square meters. The facility, which houses an import and export, dangerous goods and customs area, is capable of stuffing and stripping eight containers simultaneously.
Bloomberry posts P1.6-b net income By Jenniffer B. Austria
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LOOMBERRY Resorts Corp., the owner and operator of Solaire Resort & Casino in Parañaque City, said Monday it booked a net profit of P1.59 billion in the first nine months, a turnaround from the P1.51-billion net loss a year ago. Bloomberry said in a disclosure to the stock exchange its unaudited revenues net of promotional allowance increased 13 percent in January to September to P21.96 billion from P19.424 billion in the same period last year. Gross gaming revenues grew 14 percent to a record P28.028 billion, while non-gaming
T-bill rates rise after US election By Julito G. Rada TREASURY bills fetched higher rates Monday, triggered by mounting uncertainties on the policies of newly-elected US President Donald Trump and the expected interest rates hike by the Federal Reserve in December. The Bureau of the Treasury’s auction committee decided for a full award for the 91-day T-bills while partially awarding the 182-day debt instruments and rejecting the bids for the 364-day securities. The 91-day T-bills fetched an average rate of 1.484 percent, up from 1.281 percent on Oct. 17, while the 182-day T-bills had an average rate of 1.809 percent, higher than 1.505 percent previously. The 91-day P8 billion bills on the auction block were oversubscribed, with total tenders reaching P19.29 billion. The 182-day P6 billion papers were also oversubscribed with total tenders of P6.8 billion but the committee awarded only P4.4 billion. “Meanwhile, bids for the 364-day T-bills were rejected due to limited demand and higher-than-expected rates,” the committee said. The previous rate for the 364-day T-bills was 1.88 percent. The auction fetched P30.55 billion in total tenders, roughly a third of which were for the 91-day T-bills. The committee was able to award P10.4 billion for the P20 billion total offer. Analysts predicted higher rates in T-bills as the domestic financial market was seen tracking yields of US bonds in the wake of the unexpected results of the US election last week.
revenues also surged 24 percent to P1.72 billion. Bloomberry said VIP volume in the first nine months went up 36 percent, while mass table drop and electronic gaming machine coin-in increased 9 percent and 14 percent, respectively. Nine-month non-gaming revenues grew 24 percent to a record P1.719 billion, mainly
on the back of significant improvement from Solaire’s hotel, food and beverage, retail and others segments, which increased 21 percent and 56 percent, respectively. Bloomberry said in the third quarter alone, it posted P1.42 billion in net profit, a reversal from the P189-million net loss in the same period last year as third-quarter revenues jumped 11 percent to P7.85 billion. The third quarter also produced the best quarterly VIP volume, mass table drop and EGM coinin for Solaire with year-on-year growth rates of 61 percent, 10 percent and 16 percent, respectively. The company also reported that its Korean operations under
Jeju Sun Hotel & Casino posted a turnaround in the third quarter with P74-million net profit from a P252-million net loss posted in the previous quarter. “Our onemindedness to manage costs and capital will see us maintaining this growth trajectory up to the end of the year. We are confident that the effects of these initiatives will carry on into the coming year, but we will nonetheless continue to be discerning and persevere in making Solaire the premium go-to Philippine destination,” Bloomberry chairman and chief executive Enrique Razon Jr. said. Share price of Bloomberry on Monday closed higher by 3.2 percent to P6.50.
Alliance Global, FDC boost earnings CONGLOMERATES Alliance Global Group Inc. and Filinvest Development Corp. reported higher profits in the first nine months, on positive performance of core businesses. Alliance Global, the investment holding company of tycoon Andrew Tan, said net income in January to September increased 7 percent to P17.3 billion from a year ago. The conglomerate attributed the higher profit to cost efficiency across all business segments, allowing for better operating margins as consolidated revenues rose 2 percent to P101.6 billion. Net income attributable to common shareholders rose 4
percent to P11 billion from a year earlier. “We have been deliberate in the execution of our growth strategies for each of our key businesses, bearing in mind the changing competitive landscape in the various sectors we are in,” said Alliance Global president Kingson Sian. “Megaworld’s aggressive thrust to grow its investment properties is now paying off as this has resulted in an increased recurring income stream which has insulated the company from the vagaries of the property cycle,” Sian said. He said Travellers’ expanded amenities at Resorts World Ma-
nila continued to make it a popular integrated resorts destination despite intensifying competition in the gaming sector. “In the case of the McDonald’s operations of Golden Arches, its store expansion program further enhanced its cost management, significantly boosting its bottomline performance. Meanwhile, Emperador’s global strategy has provided it with another leg of growth as it expands its international presence,.” Sian said. FDC, the holding company of the Gotianun family, also booked a net income of P5.9 billion in the first nine months, reflecting a year-on-year growth of 21 percent. Jenniffer B. Austria
IN LINE with his desire to move the Philippines toward a so-called “independent foreign policy,” President Duterte has been making negative noises about foreign economic assistance. The new policy thrust appears to be “The Philippines can do without foreign aid.” Echoing the presidential refrain, the secretary of Social Welfare and Development stated, in the wake of the most recent typhoons, that the government had enough disaster relief funds and therefore foreign aid was not needed. Because of the apparent association in his mind between foreign and foreign-policy independence, Duterte could be expected to turn his attention to the ODA (official development assistance) extended by aid-giving countries to the Philippines. All the various forms of Philippine economic interaction with foreigners —investments, loans and aid—involve cost of one kind or another to the Philippine economy. True, foreign direct investments give rise to employment opportunities, incomes and tax revenues. But those benefits have an associated cost: drawings from the host country’s foreign exchange resources to service the profit and dividend requirements of the foreign direct investors’ shareholders. Obviously, foreign loans have to be serviced, and that, too, means drawings from this country’s foreign exchange resources to enable the public-sector and private borrowers to comply with their financial obligations to foreign creditors. ODA likewise involves an obligation on the part of the recipient country. ODA is what the international development community terms concessional lending. ODA is lending, but on highly concessional terms. ODA loans can have a maturity as long as 50 years—the bigger the covered project and the poorer the recipient country— and the interest rate on the funds is typically around 0.35 percent per annum. No foreign loan terms can be more advantageous to a developing country than those of an ODA loan. The problem with an ODA loan – if it can be called a problem— and the aspect of an ODA loan that President Duterte said he finds objectionable is the recipient-country’s counterpart funding that an ODA loan requires. Why must ODA donors require counterpart funding, the Pride of Davao railed in the course of a recent media briefing. If a country really wants to help the Philippines, why doesn’t it provide all of the financing required by a Philippine government project, he wanted to know. I’d like to think that Mr. Duterte had not been briefed on ODA lending by the secretary of Finance and/or the director-general of the National Economic and Development Authority at the time he made his anti-ODA statement. If he had been briefed beforehand by Secretary Dominguez and/or Neda chief Ernesto Pernia, he would have come to know the reasoning behind the international development community’s insistence on counterpart funding for ODA loans. Prior to the decision to require counterpart funding, donor countries’ ODA experience with recipient countries was generally bad. Numerous recipient countries would enter into ODA loan agreements, but when delivery time came, the counterpart funds were not forthcoming. Since their implementation depended on the availability of both donor and recipient-country funds, the projects ground to a halt due to inadequacy of funds with which to pay workers, suppliers and other project creditors. As a result, many ODA-funded projects were suspended. When counterpart funds were eventually provided, the projects were resumed; when no counterpart funds were appropriated, the projects ended up unstarted or partly completed. From this it can be concluded that the counterpart-financing requirement is a donor-country mechanism for ensuring that ODA-funded projects will be prosecuted to completion. After all, of what use to a recipient country is a developmental undertaking that is half-completed? For a developing country, not seeing a public project through to completion has got to be one of the greatest instances of economic misgovernance. Unfortunately, this country’s record with ODA loans is littered with unstarted and non-completed projects. I am not the secretary of Finance, but if I were, I would give the highest priority to two things. The first is to explain to President Duterte the ODA concept and its importance to the Philippine economy’s development. The second is to ensure the availability of government projects covered by ODA agreements already signed. E-mail: rudyromero777@yahoo.com
Lo and behold THERE is a room in one of the science buildings in UCLA that is ground zero for the birthplace of the internet. In the 2016 documentary by legendary filmmaker Werner Herzog, Lo and Behold, Reveries of the Connected World, we get to see that room—complete with a commemorative plaque about the fateful day in Oct. 29, 1969, when the first message was transmitted over a network from one computer in UCLA to another at the Stanford Research Institute 400 miles to the north. In the first scene of a 10-part documentary, Internet pioneer Leonard Kleinrock recounts that the first message was a single word: “Lo.” There was nothing profound about the word—one of the computers had simply crashed when it was about to receive the letter “G” to complete the remote log-in. “The SRI computer crashed, so the first message ever on the internet was lo, as in lo and behold. We couldn’t have asked for a more succinct, more powerful, more prophetic message than lo,” Kleinrock says. The sense of wonderment in Kleinrock’s observation sets the tone for the rest of the documentary—a freewheeling look at various aspects of what he calls “one of the greatest revolutions” humanity has experienced. Like a book, the film is divided into 10 chapters, each dealing with a particular aspect of the internet. Herzog, who does the voiceover and the interviews never, actually appears on screen.
In Part 1, Early Days, Herzog talks to pioneers like Kleinrock and Bob Kahn, who co-invented TCP/IP (Transmission Control Protocol-Internet Protocol), the system of rules that makes communication on the internet possible. Herzog, who describes himself as a novice with a conceptual understanding of the basics of the internet, says the early days look like prehistory from the perspective of today’s explosion of information technology. “‘Today if you would burn CDs of the worldwide data flow for one single day, and stack them up to a pile, this pile would reach Mars and back,” Herzog says, clearly in awe of the pervasiveness of the internet. “The internet is already permeating everything. Even on the International Space Station, a phone call from one module to the next goes via the internet.” In Part 2, The Glory of the Net, Herzog explores gains that were made possible because of internet technology and the vast number of people on the network. This includes an online video game in which hundreds of thousands of online users helped design RNA molecules that scientists using supercomputers could not do on their own. Here we also see autonomous cars that can drive themselves and robotic soccer players that their inventors hope will one day be smart enough to beat the FIFA champions. Balancing this upbeat view of the
internet is Part 3, the Dark Side, which starts with a stark, almost shot of the Catsouras family seated around the dining table behind some cupcakes and croissants, talking about how grisly photos of their daughter Nikki, killed in a car accident in 2006, had circulated on the internet because two California Highway Patrol officers had emailed them to other people. What made matters worse were the reactions that some people had to the photographs, and the online harassment that family members were subjected to as a result of the leaks. “I received emails with the pictures attached a short time after the accident,” Nikki’s father says. “It was disguised and I didn’t know who it came from and I opened it up. The bad ones were very hateful. Hateful towards me, towards Nikki, towards our family. It said dead girl walking. Woo hoo daddy I’m still alive. Nikki’s mother adds: “I didn’t know such depravity existed in humans and I think dogs treat their kind better than humans treat their kind… There is no dignity or respect on the internet because we’re not held accountable. Nobody is there to tell us not to. I have always believed that the internet is a manifestation of the anti-christ, of evil itself. It is the spirit of evil and I feel it’s running through everybody on earth and its claiming its victories in those people that are also evil.”
Some of Herzog’s material—such as his detours into solar flares, Hurricane Sandy, eccentrics who claim hypersensitivity to electrical radiation, and the Fukushima disaster—are only tangentially related to the internet but Herzog’s curiosity and enthusiasm are catching. There’s a lot more in Lo and Behold— including interviews with uber-hacker Kevin Mitnick and the inventor Elon Musk—that make this documentary worth watching. The topic is so wide-ranging, however, that Herzog inevitably leaves some stuff out, too. While he has a striking shot of Buddhist monks tweeting in front of the Chicago skyline, there is no mention of Facebook and the pervasive perfumed garden it has built on the internet. The documentary also seemed to be crying out for an interview with Tim BernersLee, the man who invented the World Wide Web and gave it away to the world. Still, the journey is an engaging one, and Herzog’s storytelling skills, his deadpan delivery, and offbeat questions (Do you love your robot?) are enough to hold our interest. Lo and Behold is available on Amazon and iTunes. Column archives and blog at: http://www.chinwong.com