THURSDAY: MARCH 5, 2015
B6
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PGA told to replace faulty Audi By Othel V. Campos
THE Trade Department ordered luxury car
distributor PGA Cars Inc. to replace the Audi A6 3.0 TDI bought by a businessman last year or reimburse the value spent for the vehicle, after it allegedly showed signs of defects. Trade Undersecretary for consumer protection Victorio Dimagiba said the agency issued the decision on March 2 in favor of resort owner Rolando Nolasco Jr., who complained that the car he bought on May 30, 2014 “showed signs of defects as erratic and/or random error messages appearing on the dashboard panel, which are alarming and misleading.” Dimagiba said the department’s decision showed consumer protection was at work. “The decision did not use the Lemon Law as the legal basis. But the decision used the Consumer Act. The net decision is favorable to the complainant,” he said. He said while the decision was based on the Consumer Act, the
The consumer has the option to avail of rights in both the Lemon Law or Consumer Act.
case was filed based on the claim that the car was a lemon vehicle. Under the Philippine Lemon Law, consumers who purchase a brand new car and experience defects in the course of one year may demand for either refund or replacement, after four failed repair attempts by the concerned manufacturer, distributor or authorized dealer or retailer. Nolasco, a retired air force
colonel, had his car fixed four times at the Audi repair center, but the same complaint of random lighting of icons on the dashboard was not resolved. Among the other problems cited were recurring lighting of icons on airbag, air suspension and steering and random messages on the dashboard, despite repeated repair, testing and replacement of parts. “The consumer has the option to avail of rights in both Lemon [Law] or Consumer Act,” said Dimagiba. The complaint underwent mediation and adjudication. The Trade Department issued the final decision in favor of the complainant on March 2, 2015. The Trade Department, as the implementing agency of Republic Act No. 10642 or the Philippine Lemon Law, is responsible for providing remedies for disputes related to the rights provided for under the Lemon Law. It has been successful in the use of alternative dispute resolution system in addressing consumer complaints and under the Philippine Lemon Law.
School donation. Philippine Stock Exchange and SM Foundation officials turned over a two-story, fourclassroom building to San Roque Elementary School in Barangay San Roque, Tanauan, Leyte. Shown during the turnover ceremony are (from left) San Roque Elementary School principal Ma. Evelyn Encina; SM Savemore Tacloban assistant manager Marlon Tan, SM Foundation executive director for education Carmen Linda Atayde, BA Securities Inc. director and treasurer Beatriz Jane Ang, SM Foundation executive director Deborah Sy, PSE president and chief executive Hans Sicat, PSE director Vivian Yuchengco, PSE director Edgardo Lacson, Education Department schools division superintendent Ronelo Al Firmo.
Neda set to evaluate P370-b subway By Jennifer Ambanta THE National Economic and Development Authority board is set to evaluate for approval two major projects, including the P370-billion subway that will link Fort Bonifacio to Makati City and Pasay City. Public Private Partnership Center executive director Cosette Canilao said the two projects would be reviewed by the Neda board while another would be looked into by the Neda Investment Coordination Committee. “The two projects will be the subway and the motor vehicle inspection,” Canilao said during the Asia Pacific Economic
Cooperation meeting of Finance and Central Bank deputies in Tagaytay City. Canilao said the first phase of the Batangas-Manila natural gas pipeline proposed by Philippine National Oil Company would undergo evaluation at Neda ICC. “Once the business case study has been completed by the Philippine National Oil Company and approved by the ICC, it will be presented to the Neda board in April,” she said. The proposed subway is a 12-kilometer project that that will connect Fort Bonifacio in Taguig City, Makati City and Pasay City while the motor vehicle inspection system project would cost P19 billion.
Canilao said once the mass transit project or the subway was approved by the Neda board, the PPP Center could proceed with the bidding of the project in the latter part of the second quarter. Meanwhile, Canilao said she was optimistic on the upcoming bidding of the Cavite-LagunaExpressway. “I hope they [bidders] have sharpened their pencils,” Canilao said. The Calax project will be tendered on May 16, 2015 with a minimum floor price or government premium of P20.1 billion. The PPP Center will implement a one-stage bidding process which means all documents will have to be submitted on the same day.
Any too-big-to-fail institutions in PH? THE world economic downturn that began in 2008—the worst RUDY ROMERO since the Great Depression of the 1930s—hit countries with such ferocity that private corporate institutions that until then had been considered virtually impregnable were brought to their knees. Manufacturing companies, banks, investment houses, retail organizations and service establishments were left struggling to survive. The financial and economic officialdoms of countries were now confronted by a key policy question that came to be known to be too-big-to-fail question: Which of the institutions battered by the downturn were so big—in size as well as in strategic importance —that a government could not afford to see them fall by the wayside? Since taxpayer money would be brought into play, a fierce ideological debate was triggered, with the proponents of the too-big-to-fail viewpoint urging that rescue of deserving institutions in severe-downturn situations represented an appropriate opportunity for government intervention, while the opponents argued that the iron rule of the marketplace should be allowed free play and the battered institutions accordingly left to go under. While the debate was raging, the sustained deterioration in the world operating environment made the survival of many erstwhile strong institutions an increasingly problematic proposition. Treasuries and economic planning agencies of governments could no longer put off action. Decision-time was here. Which institutions were too big to be allowed to fail and which were not? Most governments were in agreement as to which institutions deserved, for economic strategy reasons, to be thrown a government financial lifeline. Size and market reach were the most important common criteria and, other things being equal, a gigantic and nationally-operating institution was a shoo-in for government financial rescue. But other criteria were also brought into play. A comparatively small company was considered deserving of rescue if it was a major player in an industry considered to be strategically significant for the economy. Given the preeminent position of the US motor vehicle industry in the world and the sizes of their workforces, the Big Three (General Motors, Ford and Daimler-Chrysler) were obvious favorites for Federal loans, guaranties and grants. The venerable Lehman Brothers was thought to be expendable and was allowed to go into liquidation. But a number of major banks and investment houses – including Bank of America, American Express, JP Morgan Chase and Citibank—were considered unexpendable and were helped to survive. The decision to allow AIG—the mother organization of the Philippine American insurance group—to survive was one of the most controversial of the too-big-to-fail US government rescues. Are there, in this country, private commercial institutions that are considered too big and too important to the Philippine economy to be allowed by the government to fail? I’m having a difficult time coming up with an answer. The nearest to too-big-to-fail status that I can think of in Philippine business is Meralco, because of its magnitude, the industry it is in and the fact that it accounts for just over fifty percent of all electricity distributed in this country. In the public sector, the only institutions that the government cannot allow to fail are the two social security entities, Social Security System and Government Service Insurance System. SSS has approximately 30 million members and GSIS has several millions. Two very large private institutions—one a savings bank (Banco Filipino) and the other an educational-plans institution (College Assurance Plan) – that were thought to be potentially disruptive were allowed to go under without the economy missing a heartbeat. Indeed, it was the government that ordered the shutdown of Banco Filipino. Right after the EDSA Revolution, the distressed condition of two of the largest financial institutions in this country – Philippine National Bank and Development Bank of the Philippines – was made public, but the Philippine economy’s operation was not significantly disrupted. Too-big-to-fail institutions in this country? One or two perhaps, but that’s all.
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