BusinessMirror February 5, 2015

By Bianca Cuaresma

The rate at which money avail-able to businesses and house-holds expanded was seen to

have slowed even more in January than last December, but just about right to achieve continued growth, measured as the gross domestic product (GDP), as high as 8 percent this year, according to the Bangko Sentral ng Pilipinas (BSP). Diwa C. Guinigundo, deputy BSP governor for the Monetary Stability Sector, said the moderating growth in money supply, known as M3 among economists, was a valida-tion of the success the central bank achieved in keeping money-supply expansion well within bounds of just 7 percent or 8 percent this year. At a discussion with the editors and reporters at the BusinessMir-ror, Guinigundo said slower M3 growth in January, also known as liquidity growth, affirms the suc-cess of the various antiliquidity or anti-inflation measures the BSP has adopted the past many months. Latest reports from the central bank show domestic liquidity hav-ing grown by 9.6 percent last Decem-ber, slightly faster than the revised 9.2-percent expansion last November

By Lenie Lectura

A600-megA-wAtt (mw) power project

in Subic—which has been on the back burner since 2010—could now finally take off to provide the Luzon grid with the much-needed additional power-generating capacity in the years ahead, following the Supreme Court’s (SC) favorable decision on tuesday. Foreign and local business groups have been lobbying for the proposed power facility, even stressing that the electricity shortage feared to hit the Luzon area this summer would have been easily addressed by the 600-MW plant. Redondo Peninsula energy Inc. (RP energy), a consortium com-posed of Meralco PowerGen Corp., Aboitiz Power Corp. and Taiwan Cogeneration International Corp., on Wednesday welcomed the de-cision of the SC, dismissing the writ of kalikasan case against the company’s coal-fired power-plant project at the Subic Bay Freeport Zone and upholding the project’s environmental compliance cer-tificate and lease and develop-ment agreement with the Subic Bay Metropolitan Authority. RP energy President Angelito U. Lantin said the SC decision will now allow the power firm to proceed with the construction and development of its power plant in Subic. “This could not have come at a better and more opportune time, considering the challenges we now face insofar as the power-supply situation in the Luzon

Continued on A2

www.businessmirror.com.ph n TfridayNovember 18, 2014 Vol. 10 No. 40 P25.00 nationwide | 6 sections 30 pages | 7 days a weekn Thursday, February 5, 2015 Vol. 10 No. 119

A broader look at today’s businessBusinessMirrorthree-time

rotary club of manila journalism awardee2006, 2010, 2012u.n. media award 2008

Peso exchange rates n us 44.0940 n jaPan 0.3751 n uK 66.8641 n hK 5.6873 n china 7.0459 n singaPore 32.7544 n australia 34.4323 n eu 50.6420 n saudi arabia 11.7428 Source: BSP (4 February 2015)

Continued on A2 Continued on A3

diwa C. Guinigundo, BsP deputy governor

for the Monetary stability sector, said the

moderating growth in money supply, known as

M3 among economists, was a validation of

the success the central bank achieved in

keeping money-supply expansion well within

bounds of just 7 percent or 8 percent this year.

INSIDE

avoid these Pricey u.s. tourist traPs

end of tiger?

new cold war: u.s.,russia fight over euroPe’s energy future

‘WHIPPING BOY’ DIGS UP

CHILDHOOD BULLY AND A FASCINATING

STORY »D4

D1

Life � ursday, February 5, 2015BusinessMirrorEditor: Gerard S. Ramos • [email protected]

M AY God be gracious and bless us, may He let His face shine upon us, that His way be known on earth and His salvation among the nations. May the people

praise You, O God, may all the peoples praise You (Psalm 67)! Whatever we do, we should do it wholeheartedly, working only for the Lord. We well know that the Lord will reward us with the inheritance. We are servants, but our Lord is Christ (Col 3:23-24). When we love and serve, we do it wholeheartedly. Amen.

Do it wholeheartedly

VIRGIE SALAZAR AND LOUIE M. LACSONWord&Life Publications • [email protected]

B M J FThe Orange County Register

WHEN was the last time you walked out of an attraction and thought, “Wow, that was a huge waste of time and money?”

Tourist traps have been around as long as there have been tourists to spend money on them, and the appellation is somewhat in the eye of the beholder. My feeling that I was just ripped off could be your cherished childhood tradition.

Some readers tell me that Disneyland is a tourist trap, but I wouldn’t call it one, because you do get significant value for the day’s ticket price, even though it’s a horrifying $96 nowadays.

Much more egregious to me are the places you spend time and money to visit in anticipation of a good experience, only to discover that you didn’t get it. What you got instead was...fleeced.

Things have only gotten worse since cheesy chain attractions have opened up duplicate locations at virtually every major tourist destination in North America, homogenizing travel even more, making every place look the same, and pushing out local attractions and stores that theoretically might have been interesting.

Nowadays, I don’t merely see a huge, garish Ripley’s Believe It or Not in Hollywood, I also have to see one in Orlando, Branson, San Francisco, Times Square, Niagara Falls and more locations than I have room to describe. In fact, if there’s a Ripley’s there, the whole area is probably a tourist trap.

Here’s my list of terrible tourist traps for those of you visiting North America:

■ Times Square, New York City. Yes, you have to stop here just to gawk at the giant billboards, then get out as fast as you can. There’s nothing to actually see except other tourists, and nothing to do except go to places like Ripley’s and dine at grossly overpriced chain restaurants. Somehow, I let my teenagers talk me into eating at an Applebee’s here. The food and service were both wretched, and it was shockingly expensive. Later, I found out the only reason the kids wanted to go there was so they could charge their cellphones.

■ Fisherman’s Wharf, San Francisco. I was so disappointed when I saw this place again, because it’s changed so much from when I used to visit as a child. It was a tourist trap back then, but a local one and fun for a kid who wanted to look for dried starfish and shells. Nowadays, it’s all built up with garish themed attractions and any kitschy charm it once held has long since departed. No locals venture here, with good reason. The historic Fort Mason is worth a look, with its cannon batteries and views of Alcatraz and the Golden Gate Bridge. And if you desperately need to visit a wax museum, head on over. But there are so many more charming parts of the city. Walk up and eat at the Ferry Building instead—you’ll thank me.

■ Solvang, California. Now, this one’s a judgment call, because there are people who love this place. It’s worth a few minutes of your time if you’re already driving through inland Santa Barbara County. Founded in 1911 by Danish immigrants, it still has enough touches of old Denmark to have a kitschy appeal, including quaint architecture in the downtown area.

But once you’ve wandered around a bit and had a pastry, there’s not much here, except mom-and-pop shops and a summer theater festival. Sad to say, Denmark’s not known for fabulous cuisine, and neither is Solvang. Though it’s a decent place to stay if you’re hitting the wineries nearby.

■ Cabazon Dinosaurs. If you travel east on I-10, you’ve probably seen these monsters hulking near the Casino Morongo and outlet stores. The huge Apatosaurus named Dinny and the T. Rex named—naturally—Rex, were built some 40 years ago by the owner of the neighboring Wheel Inn (sadly, now closed). Back when they were newly built, and not obscured by newer construction in front of them, these concrete replicas were pretty cool to come across in the middle of nowhere. Nowadays, they look sad. Today, the dinosaurs are accompanied by a Creationist museum where you can pay $8.95 to learn about how dinosaurs could have lived at the same time as human beings, despite scientific evidence to the contrary. There’s also a gift shop inside Dinny. If you don’t feel like stopping next time you’re headed to Palm Springs, just rent Pee-wee’s Big Adventure, where they have a featured scene.

■ South Of The Border, Hamer, South Carolina. I have been told to add this attraction along I-95, which advertises itself in 175 colorful billboards for many miles along the highway, leading drivers to expect more than they get when they finally stop in. This attraction includes a Mexican restaurant (hence the name), a steakhouse, a small convention center, a motor inn, a newly added “reptile lagoon,” Pedroland Park kiddie rides, two gas stations and a gift shop.

■ Four Corners Monument, Navajo Reservation. I still feel a little miffed about this place, because I drove more than an hour out of my way on a family road trip to accommodate my teenage son, who was itching to see it. We got there and paid our $5 per person to enter and guess what? There’s no there there, to quote Gertrude Stein. It’s just the intersection where four states’ boundaries collide—Arizona, New Mexico, Utah and Colorado. With a plaque. And flags. And some T-shirts for sale. Seriously, that’s it. And there’s actually some dispute about whether it even is where the four corners meet.

■ Calico Ghost Town. I’m also including this by popular demand. At one time, this was a real ghost town left over from its silver-mining days, but then it was taken over and developed as a themed attraction by Walter Knott of Knott’s Berry Park fame. Now, it’s owned and operated by the San Bernardino County parks department, which charges $8 to get into the town and museum, and then each individual attraction you might want to do in town, such as riding the train, visiting the silver mine or panning for gold, costs extra.

■ Double-Decker Sightseeing Bus Tours. Anywhere. I’m still mad at myself that I blew over $200 on double-decker bus tours when I took my teenagers to New York City for the first time last summer. What was I thinking? It’s not like I suddenly lost my mind. Or did I? Riding around the city with a microphone blaring out the attractions, above the actual denizens of the neighborhoods we were passing, was decidedly weird and we didn’t like it. After a couple of tries, we just abandoned our passes, used the subway, walked and took taxis. ■

CEBU Pacific Air (CEB) recently flew its 100 millionth passenger, Yelen Bontuyan, from Cebu to Manila, marking a major milestone in its 18-year airline history. As CEB’s 100 millionth guest, Yelen received P100,000, as well as 100 tickets to any domestic or international destination, during a special inflight announcement that took the place of the airline’s trademark Fun Games.

The airline celebrated the milestone with the rest of the passengers on her flight, with each being given free round-trip tickets to the domestic destination of their choice.

A warm reception greeted Yelen upon arriving in Manila. Cebu Pacific employees, some of whom have been with the airline since its inception, welcomed Yelen, the passenger who will now be forever part of the airline’s history. Manila-based Yelen shared, “I’ve been going back and forth to Cebu, where

many of my relatives are based, since I was very young. For the past 16 years, I’ve been flying Cebu Pacific because their airfare is much more affordable than other airlines.

“With my ticket prize, I really want to visit more places in the Philippines, and visit my relatives more often. Being the 100 millionth passenger is my most memorable travel experience. This is really a blessing for me. It’s a great way to start the year,” she added.

Late last year, as Cebu Pacific got ready to reach its 100 millionth milestone, the carrier provided tickets to 13 Facebook friends, who nominated their loved ones they believed deserving of free flights. Their stories, ranging from a close sibling bond to a mother’s dream destination, were also featured on the Cebu Pacific Air Facebook page (www.facebook.com/CebuPacificAir).

The airline also continues to share the

different stories of the people one meets while traveling, via the Juan of a Kind Stories Facebook page (www.facebook.com/JuanOfAKindStorie s). From the

heartwarming to the humorous, each anecdote captures the similarities and differences of our cultures.

CEB Vice President for Marketing

and Distribution Candice Iyog said, “We started operations in 1996, at a time when air travel was expensive. It will always be a privilege for us to link islands and countries together, contribute to nation-building, and play a role in our passengers’ life stories.”

Cebu Pacific has grown into the Philippines’s largest airline with approximately 90 domestic and international routes, taking more people to farther shores and providing affordable air travel.

It now operates the most extensive network within the Philippines, as well as between the Philippines to 28 international destinations, including Australia (Sydney), Brunei Darussalam, Japan (Nagoya, Tokyo, Osaka), Kingdom of Saudi Arabia (Dammam, Riyadh), and the United Arab Emirates (Dubai).

For more information, visit www.cebupacificair.com.

Cebu Pacific Air marks ‘100M Trips, 100M Stories, 100M Juans’CEBU Pacific Vice President for Human Resources Rhea Villanueva, crew and passengers with Yelen Bontuyan, the airline’s 100 millionth passenger

Bound for the US?Avoid these pricey tourist traps

D UBLIN—Rory McIlroy and his lawyers held negotiations with his former agent on Tuesday in a bid to reach a settlement in their multimillion-dollar court case. The two sides met for five hours at the High Court complex in Dublin, and the case was

adjourned until Wednesday morning. The top-ranked golfer is suing Dublin-based Horizon Sports Management and its leading agent, Conor Ridge, claiming he was misled into signing a contract with the company. McIlroy initiated the case in 2013. Judge Brian Cregan said progress had been made between the two sides on Tuesday and he agreed to allow further last-minute talks to try to avoid a long and costly trial. The case had been expected to last eight weeks. McIlroy was in court, along with business executive Barry Funston, who oversees the golfer’s charity work, and his cousin, Brian McIlroy. Ridge was also in court. Wearing a dark suit and glasses, McIlroy arrived at the court on Tuesday morning for the start of proceedings. The case was quickly adjourned until the afternoon and then again until Wednesday as the two sides continued to negotiate. McIlroy has said in court papers that he signed the contract at Horizon’s Christmas party “in circumstances of great informality,” and without having seen a draft of the agreement before it was given to him to sign. Horizon is counter-suing, claiming McIlroy owes it millions of dollars in commissions. McIlroy, who left Horizon to form his own management company in 2013, was expected to testify in court this week. The four-time major winner is coming off a victory at the Dubai Desert Classic last Sunday. Speaking before the tournament, McIlroy said he hopes the court case “won’t take that long, and we can get on with our lives.” “It’s not something you want hanging over your head and it’s not something I’d want anyone to go through, it’s not a nice process,” McIlroy said. “It’s a shame it’s gone this far and that two sides see things completely differently. The only way to sort it out is to get a judge to come in and tell us what to do.” AP

McIlroy, former agent seekout-of-court settlement

British Open to leave BBC aftermore than 60 years of partnershipLONDON—The BBC is losing one of its most prized sports events, golf’s British Open, to rival Sky.

Sky Sports secured exclusive rights to televise the Open in a five-year deal, from 2017 to 2021, the Royal and Ancient (R&A) said on Tuesday.

The oldest of golf’s four majors will leave public broadcaster BBC after more than 60 years to join with the subscription channel controlled by Rupert Murdoch. While terms were not announced, British media put the deal’s worth at £15 million ($22.5 million) a year, or £75 million overall. That would be more than double the reported £7-million annual contract with the BBC. Sky’s coverage will begin with the 146th Open at Royal Birkdale from July 16 to 23, 2017. The BBC will show a two-hour highlights package in prime time. Sky already has rights to golf’s three other majors: The Masters, US Open and US Professional Golfers’ Association Championship. The R&A said the new deal will allow the governing body “to provide significantly increased financial support to golf participation initiatives in the UK and Ireland.” “We believe this is the best result for the Open and for golf,” R&A Chief Executive Peter Dawson said. “Sky Sports has an excellent track record in covering golf across its platforms, and has become the home of live golf coverage over recent years.” The R&A said the number of commercial breaks on Sky for the British Open will be limited to four minutes per hour, with each ad running for 60 seconds. The British Open was not among the so-called crown jewels of sports events that must be shown on free TV in the UK. The list of protected events includes the Olympics, the World Cup, the FA Cup final and the Wimbledon finals. AP

SAN DIEGO—A group of Professional Golfers’ Association (PGA) Tour caddies sued the PGA Tour in federal court on Tuesday for making them wear bibs that have the logo of

the tournament sponsors without sharing in what it estimates as $50 million in endorsement revenue. The class-action suit on behalf of 81 caddies was filed in San Francisco, where former University of California Los Angeles basketball star Ed O’Bannon successfully sued the National College Athletic Associaiton for keeping college players from selling their marketing rights. “This lawsuit is intended to protect the rights of caddies who are required to endorse tour sponsors with zero compensation from the PGA Tour,” said Gene Egdorf, the caddies’ Houston-based lawyer. “Any working professional deserves to be paid based on the income they generate, but that’s not happening on the PGA Tour.” PGA Tour Spokesman Ty Votaw said there would be no comment. At issue was whether the tour had a right to force caddies to wear bibs and “retain for itself the tens of millions of dollars in advertising generated by those bibs.” The lawsuit stems from a dispute that has been brewing for more than a year over treatment of caddies. A tipping point was at The Barclays in August 2013 at Liberty National during a rain delay, when caddies said security would not allow their wives or children in a caddie room because they did not have credentials. They felt it was an example of how the tour treats them like second-class citizens. At several tournaments, they are not allowed in the clubhouse or in the locker room. The bibs a caddie wears have the players’ name on the back, and the tournament logo on the front. The lawsuit also claims the tour has denied caddies access to basic health care and pensions plan. Mike Hicks, the caddie for Payne Stewart when he won his last US Open in 1999, and Kenny Harms, who works for Kevin Na, were the top two class representatives in the lawsuit. Included among the other caddies were Andy Sanders (who works for Jimmy Walker), Jimmy Johnson (Steve Stricker), Damon Green (Zach Johnson) and Tony Navarro, the longtime caddie for Greg Norman who now works for Gary Woodland. AP

SportsBusinessMirrorC1 | THURSDAY, FEBRUARY 5, [email protected]

[email protected]: Jun LomibaoSportsSportsSportsBusinessMirrorSportsSportsC1 | THURSDAY, FEBRUARY 5, 2015THURSDAY, FEBRUARY 5, 2015SportsTHURSDAY, FEBRUARY 5, [email protected][email protected][email protected]@[email protected]@businessmirror.com.phSportsEditor: Jun LomibaoEditor: Jun LomibaoSportsEditor: Jun LomibaoSports

END OF TIGER?END OF TIGER?END OF TIGER?END OF TIGER?END OF TIGER?END OF TIGER?WOODS NOW A SUBJECT OF SYMPATHY

financial support to golf participation initiatives in the UK and Ireland.” “We believe this is the best result for the Open and for golf,” R&A Chief Executive Peter Dawson said. “Sky Sports has an excellent track record in covering golf across its platforms, and has become the home

The R&A said the number of commercial breaks on Sky for the British Open will be limited to four

The British Open was not among the so-called crown jewels of sports events that must be shown on free TV in the UK. The list of protected events includes the Olympics, the World Cup, the FA Cup final and the Wimbledon finals. AP

AN DIEGO—A group of Professional Golfers’ Association (PGA) Tour caddies sued the PGA Tour in federal court on Tuesday for making them wear bibs that have the logo of

the tournament sponsors without sharing in what it estimates

The class-action suit on behalf of 81 caddies was

caddies who are required to endorse tour sponsors with zero compensation from the PGA Tour,” said Gene Egdorf, the caddies’ Houston-based lawyer. “Any working professional deserves to be paid based on the income they generate, but that’s not

PGA Tour Spokesman Ty Votaw said there would be no comment. At issue was whether the tour had a right to force caddies to wear bibs and “retain for itself the tens of millions of dollars in

The lawsuit stems from a dispute that has been brewing

A tipping point was at The Barclays in August 2013 at Liberty National during a rain delay, when caddies said security would not allow their wives or children in a caddie room because they did not have credentials. They felt it was an example of how the tour treats them like second-class citizens. At several tournaments, they are not

The bibs a caddie wears have the players’ name on the back, and the tournament logo on the front. The lawsuit also claims the tour has denied caddies access to basic health care and

Mike Hicks, the caddie for Payne Stewart when he won his last US Open in 1999, and Kenny Harms, who works for Kevin Na, were the top two class representatives in the lawsuit. Included among the other caddies were Andy Sanders (who works for Jimmy Walker), Jimmy Johnson (Steve Stricker), Damon Green (Zach Johnson) and Tony Navarro, the longtime caddie for Greg Norman who

END OF TIGER?END OF TIGER?END OF TIGER?

IN this � le photo, golfer Jonathan Byrd (right) shows caddie Mike Hicks the contour of the 17th green during a John Deere Classic golf tournament.A group of caddies has � led a class-action lawsuit, demanding that the tour compensate them for wearing bibs. AP

» TIGERS WOODS, here hitting out of the sand trap on the

fourth hole during the second round of the Phoenix Open,

knows he has a lot of work and a long road ahead of him. AP

RORY MCILROY arrives at Dublin High Court to initiate the multimillion-dollar case against his former management company. AP

Group of caddies to sue PGA Tour over wearing bibs with logos

B D FThe Associated Press

SAN DIEGO—No one can recall these kinds of odds for Tiger Woods at any tournament, certainly not one at Torrey Pines. He is listed at 50-to-1, which prompted a question that was even more shocking than the odds. Was that to win? Or to make the cut?

Perhaps even more telling was an observation from Padraig Harrington. “Did you ever think you would hear a professional golfer genuinely and sincerely say, ‘I hope Tiger Woods plays better,’” Harrington said over the weekend. No one ever imagined him playing worse. Woods didn’t just miss the cut in the Phoenix Open last week. He missed it by 12 shots. More than posting an 82—the highest score of his professional career—was how lost he looked on the golf course, especially around the greens. Yes, this was a really bad day at the office. But this was Tiger Woods, the guy with a short game that had no rival. The biggest break for Woods during his second round at the TPC Scottsdale was on the 17th hole, when Woods and Jordan Spieth drove it just short of the green. The hole was back and to the right, requiring a pitch that had to be struck close to perfect. Woods had no chance. His golf ball was partially sunken in a divot, a shot so impossible that he stood over it for nearly a minute with his hands on his hips instead of around a club, probably because he had no idea what club could get him out of this trouble. He opted for a 4-iron, which didn’t have enough

pace and fell off the side of the green. Why was that a break?

Because if he had a clean lie, Spieth would have exposed him even more. Spieth has one of the best

short games on tour. Woods does not. And the rest of his game is not much better. The talk at Isleworth two months ago, when Woods returned from a four-month break to let his back

heal fully from surgery and to regain strength, was that there was more freedom in his swing. In Phoenix

he was back to rehearsing his shot, over and over, before every swing.

Is this a low point? Woods can only hope so, but the rehearsals would indicate he has a lot of work and a long road

ahead of him. But what Harrington said touches on a sad truth about a guy who dominated the sport unlike any other.

For so many years Woods was associated with words like mystique, intimidation and ruthlessness.

Now he evokes sympathy. No player wants to see Woods like this, and the odds would be greater than 50-to-1 they’ll ever get the old Woods back. “I want to see him back on top of his game again,” Pat Perez said. “He is golf. I don’t care where he is. If he finishes last or first or whatever, he is the game of golf. And until he leaves, he will be that guy. Everybody is always going to question him and go after him. I don’t watch the Golf Channel, but I’m sure they have all the answers for him. I hope he turns it around.” Rory McIlroy got grief last year for saying that Woods was on the back nine of his career. Now you might as well try to guess which hole he is on. That’s the mood on the Professional Golfers’ Association (PGA) Tour. It’s sad to watch. The two nastiest words in golf are “choke” and “yips,” and the latter is coming up quite frequently in any conversation about Woods. How else to explain a guy who hits one chip 3 feet and the next one 30 yards? Justin Thomas, a 21-year-old rookie, grew up watching and idolizing Woods. Just like any other kid, he dreamed about winning a major, and it was usually going head-to-head with Woods on the back nine on Sunday. Thomas has played in three tournaments with Woods, and Woods has missed the cut in two of them. The other was at Torrey Pines, where Woods missed the 54-hole cut. When he shot his 82 last Friday, Thomas said it was “disheartening to see.” After the first round of the Phoenix Open, someone pointed out to Spieth than in the six times they had been paired together, Spieth already was 23 shots ahead. “I don’t think I’ve caught him on a good day,” he said politely. These kids don’t know the Tiger Woods that Perez and Harrington grew up with. They might never. “They didn’t have to compete against him week in and week out, when you knew you couldn’t beat him,” Perez said. “There was nothing you could do about it. But it’s just...it’s just different now.” Along with the analysis—is it in his head or does he have the yips or is it both?—are the predictions. The end of Tiger Woods. To see how lost he looked in Phoenix, and realizing that he is 39 with five surgeries behind him, make clear that it will take an extraordinary effort for Woods to get back to the top of his game. Then again, he was nothing short of extraordinary leading up to this point. It’s easy to forget he won five times and was PGA Tour player of the year just two years ago. That’s what Thomas is banking on. “It [stinks],” he said of how Woods is playing. “But he’ll get it back. He wasn’t the best player by coincidence.”

The [email protected] • Editor: Lyn Resurreccion Thursday, February 5, 2015 B3-3

TAIPEI, Taiwan—A Taiwanese flight with 58 people aboard clipped a bridge shortly after

takeoff and careened into a shallow river on Wednesday in the island’s capital of Taipei, killing at least eight people, state media said. Parts of the wrecked fuselage of the turboprop ATR 72 jutted out of the Keelung River just a couple dozen meters (yards) from the shore near the city’s downtown Sungshan airport. The main section of fuselage was on its side, missing a wing. Rescuers clustered around the plane in rubber boats more than two hours af-ter the crash, and could be seen pulling carry-on luggage from an open plane

door. The country’s Central News Agency (CNA) said eight people were killed out of 26 that had been pulled from the plane. The rescue was continuing.

The CNA said the flight from Taipei to the outlying island of Kinmen lost con-tact with flight controllers at 10:55 a.m. and the fuselage landed in the Keelung River near the city’s downtown Sung-shan airport.

As many as 31 passengers were from mainland China, Taiwan’s TVBS news broadcaster said. Kinmen lies just off the Chinese coast, making it a conve-nient way to return to the mainland after traveling to Taiwan. The plane also hit a taxi, the driver of which was injured, as it flew into the river, TVBS reported. AP

Taiwan plane with 58 aboard crashes in Taipei; 8 killed

EmErgEncy personnel work on top of a commercial plane after it crashed in Taipei, Taiwan, on February 4. The Taiwanese commercial flight with 58 people aboard clipped a bridge shortly after takeoff and crashed into a river in the island’s capital of Taipei on Wednesday morning. AP

New Cold War: US, Russia fight over Europe’s energy future

It’s about heat and electricity for tens of millions of Europeans. The points on the map aren’t troop deployments, tank battalions and missile silos but pipelines, ports and power plants.

As the Obama administration escalates economic sanctions on Russia and weighs military sup-port to Ukraine, it also has revved up a less noticed but far broader campaign to wean Central and Eastern Europe off a deep reliance on Russian energy. Success, US officials say, would mean finally “liberating” former Soviet states and satellites from decades of eco-nomic bullying by Moscow.

To that end, Washington is helping set up new natural-gas pipelines and terminals in a re-gion that depends on Russia for more than 70 percent of its en-ergy needs. It is pushing Ameri-can companies’ bids for nuclear

plants and fracking exploration in Europe. Yet as the US makes headway, the Kremlin is fighting back, warning neighboring gov-ernments about the consequences of looking westward for fuel. Rus-sia is trying to outmaneuver the US on nuclear bids, buy up pipeline infrastructure across Europe and control not only how its vast en-ergy reserves move westward, but what European governments can do with those supplies afterward.

“It’s a chess match,” said Amos Hochstein, the State Department’s special envoy for international energy affairs, as he pored over a map of Europe dotted with exist-ing and proposed pipeline routes.

Although the US has pressed its European partners for decades to find new oil, gas, coal and nuclear sources, the crisis in Ukraine has upped the ante. Russia’s takeover of Crimea last year and continued

support for rebels in a brutal civil war in Ukraine has changed Eu-rope’s mind-set about relying so heavily on Russian energy.

Last month Secretary of State John Kerry visited Bulgaria to push for a new gas spur and to promote an American company’s bid to build a new nuclear plant. Bulgaria relies on Russia for 85 percent of its gas and all of its nuclear power. The prices, among the highest for North Atlantic Treaty Organization countries, are a concern within the alliance, which prides itself on winning the Cold War. “The battle was won,” Kerry told staffers at the US embassy in Sofia. “And here we are today in 2015, and Russia is still trying to impose on people its will.”

Last November Vice President Joe Biden visited Romania, anoth-er vulnerable country, and Turkey, Europe’s bridge to resource-rich Central Asia, to press the case.

Victoria Nuland, America’s top diplomat for Europe, and energy envoy Hochstein have spent much of the past few months working with Europe on a coordinated energy strategy. Their message: Failure now will only invite more Russian pressure.

While episodes of Russia shut-ting off the energy spigots to its neighbors have raised alarms, persistent infighting among Eu-ropean governments and energy companies has hampered diversifi-cation efforts across the continent.

Big countries, especially, have found it easier to make private deals with President Vladimir Putin’s government. And that has done little for Europe’s most vul-nerable economies, whose infra-structure is designed only to take in supplies from Siberia.

But, increasingly, there now is action in addition to diversity talk.

With US support, Lithuania and soon Poland will be importing liquefied natural gas from Norway, Qatar and potentially the US. New pipelines will enable Central and Eastern European countries to send fuel from west to east and north to south.

And in a couple of years, a south-ern corridor should be taking fuel from the Caspian Sea through Azerbaijan, Georgia and Turkey, and into Europe, bypassing Russia.

Those advances combined with other moving parts—a liquefied gas plant off the Croa-tian coast, a Bulgaria-Romania network connection, links into Serbia and Hungary, and greater energy integration as far afield as Spain and France—will mean Europeans can increasingly trade energy among themselves, pooling their fuel sources and weakening Russia’s grip.

Hochstein said the US would like to see a 20-percent slice cut out of Russia’s current share of the Eastern European gas market by 2020, considering that a major step forward. AP

WASHINGTON—The United States and Russia are once more locked in

what could be a generation-defining conflict, and Europe is yet again the core battleground. But this Cold War reprise isn’t about military supremacy.

WASHINGTON—President Barack Obama and Jor-danian King Abdullah

II vowed not to let up in the fight against the Islamic State (IS) group on Tuesday, as Jordanians mourned the death of a military pilot held cap-tive by the militants.

Obama hosted Abdullah at the White House for a hastily arranged meeting, hours after a video emerged online purportedly showing 26-year-old Lt. Muath Al-Kaseasbeh burned to death by the militant group. Abdullah, who was on a previously scheduled trip to Washington, ar-rived after nightfall and made no re-marks to reporters as he and Obama sat side by side in the Oval Office.

In the meeting, Obama offered “his deepest condolences” to the king over the pilot’s death, the White House said. “The president and King

Abdullah reaffirmed that the vile murder of this brave Jordanian will only serve to steel the internation-al community’s resolve to destroy ISIL,” said White House Spokesman Alistair Baskey, using an acronym for the extremist group.

Al-Kaseasbeh, who fell into the hands of the militants in December when his Jordanian F-16 crashed in Syria, is the only pilot from the US-led coalition to have been captured to date. His death sparked outrage in Jordan, where the country’s partici-pation in the coalition against the IS group has not been popular.

The video emerged following a weeklong drama over a possible pris-oner exchange with an al-Qaeda op-erative imprisoned in Jordan.

In a statement before his meet-ing with Abdullah, Obama vowed the pilot’s death would “redouble

the vigilance and determination on the part of our global coalition to make sure they are degraded and ultimately defeated.”

“Lieutenant Al-Kaseasbeh’s dedi-cation, courage and service to his country and family represent uni-versal human values that stand in opposition to the cowardice and de-pravity of ISIL, which has been so broadly rejected around the globe,” Obama said.

Vice President Joe Biden, who held a previously scheduled lunch with Abdullah in Washington on Tuesday, also condemned the kill-ings and called for the release of all prisoners held by IS militants. The king also held previously scheduled meetings with US senators.

Abdullah, a close US ally, has portrayed the campaign against the extremists as a battle over values. AP

Obama, King Abdullah vow not to let up against Islamic State

PrEsidEnT Barack Obama (right), meets with King Abdullah ii of Jordan in the Oval Office of the White House, on Tuesday, in Washington. The meeting comes after Jordanian Air Force pilot First Lt. moaz al-Kasasbeh was executed by the islamic state group. AP

Pentagon nominee Ashton Carter: Budget allocation and spending need reform

WASHINGTON—President Barack Obama’s pick to run the Pentagon says he will

seek better use of taxpayer dollars but that Congress must bring stability back to the military’s budget.

Ashton Carter, in prepared remarks for his Senate confirmation hearing on Wednesday, acknowledges that the De-fense Department must end wasteful practices that undermine public confi-dence even as he criticizes the automatic spending cuts known as sequestration.

“I cannot suggest support and sta-bility for the defense budget without at the same time frankly noting that not every defense dollar is spent as well as it should be,” Carter says in remarks prepared for his opening statement to the committee.

“The taxpayer cannot comprehend, let alone support, the defense budget

when they read of cost overruns, lack of accounting and accountability, need-less overhead and the like,” he adds in prepared remarks obtained by the As-sociated Press.

Carter is expected to face politically charged questions about Iraq and other hot spots during his Senate appearance. Nominated by Obama to become the fourth Pentagon chief of his administra-tion, he is experienced in a wide range of national security issues.

The Philadelphia native served twice previously in Obama’s Pentagon, most recently as deputy defense secretary from 2011 to 2013. He was assistant secretary of defense for international security policy during the administra-tion of President Bill Clinton.

Unlike his predecessors over the past 30-plus years, Carter has served neither in the military nor in Congress. AP

‘Subic plant key to supply reliability’long-delayed 600-mw Plant to Provide luZon grid much-needed additional Power-generating caPacity

liFe d1

sPorTs C1

world B3-3

See “Oil,” A2

Sobrepeña: MRT 3, at currentstate, will not attract investors

m3 exPansion just enoughto suPPort8% growth

For waNT oF CoordiNaTioN armed Forces of the Philippines Chief Gen. Gregorio Pio Catapang Jr. points to the map where the alleged clash between elite police special action Force (saF) commandos and Muslim rebels took place on January 25, during a news conference on February 4 at the aFP headquarters at Camp aguinaldo in Quezon City. Catapang maintained that proper coordination could have made a difference in the incident, which resulted in the killings of 44 commandos, the worst combat loss in a single day in recent memory. AP/Bullit MArquez

By Lorenz S. Marasigan

The Metro R ai l Transit (MRT) Line 3 must first undergo a total makeover

before its maintenance contract could be deemed palatable to “se-rious” investors, the owner of the multibillion-peso train line said on Wednesday. MRT holdings II Inc. (MRTh-II) Chairman Robert L. Sobrepeña said the current state of the most congested train system in the Phil-ippines could be described in one word: alarming. This, he said, means that the train system already poses

certain risks to the riding public. “The rehabilitation and proper maintenance of the system cannot wait. We must take any and all steps needed to restore the system to make it safe and reliable for the riding pub-lic,” he said. Rehabilitation, Sobrepeña said, would ensure the integrity of the train line that connects the northern and southern corridors of Metro Manila. “Fast-track rehab is key and fore-most. It must be done to assure safety of the riding public and to restore the MRT 3. Once the fast-track rehab is done by a credible company with proven track record and financial ca-

pacity, then the MRT 3 can operate at its original capacity again, and the long lines at stations will be greatly minimized,” he said. This, Sobrepeña said, would pave the way for a successful procure-ment of a reputable maintenance provider for the train line. The two auctions for the P2.38-billion MRT maintenance contract were snubbed by private railway operators due to the line’s dilapidated state. During the first tender, Busan Transport Corp., Mosan-Inekon Phils. Ltd. Co., SMRT International Pte. Ltd., Miescorrail Inc. and D.M.

SUNRISE SUNSET

FULL MOON6:24 AM 5:56 PM

MOONRISEMOONSET

6:57 AM 7:01 PM

TODAY’S WEATHERMETROMANILA

LAOAG

BAGUIO

SBMA/CLARK

TAGAYTAY

LEGAZPI

PUERTOPRINCESA

ILOILO/BACOLOD

TUGUEGARAO

METROCEBU

CAGAYANDE ORO

METRODAVAO

ZAMBOANGA

TACLOBAN

3-DAYEXTENDEDFORECAST

3-DAYEXTENDEDFORECAST

CELEBES SEA

LEGAZPI CITY24 – 29°C

TACLOBAN CITY23 – 30°C

CAGAYAN DE ORO CITY

METRO DAVAO23 – 30°C

ZAMBOANGA CITY24 – 33°C

PHILI

PPIN

E ARE

A OF R

ESPO

NSIB

ILITY

(PAR

)

SABAH

PUERTO PRINCESA CITY 24 – 31°C METRO CEBU

24 – 30°C

ILOILO/BACOLOD

24 – 30°C

23 – 29°C

24 – 31°C 24 – 31°C 23– 31°C

23 – 30°C 22 – 29°C 23– 29°C

24 – 29°C 24 – 30°C 24 – 30°C

24 – 30°C 23 – 29°C 22 – 29°C

24 – 34°C 24 – 33°C 23 – 33°C

Watch PANAHON.TV everyday at 5:00 AM on PTV (Channel 4).

Weekday hourly updates: 6:00 AM on Balitaan, 7:00 AM & 8:00 AM on Good Morning Boss!, 9:00 AM, 10:00 AM, 11:00 AM, 12:00 PM, 1:00 PM

on News@1, 3:00 PM, 4:30 PM, and 6:00 PM on News@6

www.panahon.tv

@PanahonTV

FEBRUARY 5, 2015 | THURSDAY

HIGH TIDEMANILA

SOUTH HARBOR

LOW TIDE

6:18 AM-0.07 METER

TUGUEGARAO CITY 20 – 27°C

LAOAG CITY 20 – 30°C

TAGAYTAY CITY 18 – 28°C

SBMA/CLARK 21 – 29°C

20 – 31°C 20 – 31°C 21 – 30°C

20 – 28°C 19 – 29°C 20 – 28°C

21 – 30°C 21 – 31°C 19 – 30°C

12 – 21°C 12 – 23°C 11 – 22°C

19– 28°C 19 – 29°C 19 – 29°C

24 – 30°C24 – 30°C 24 – 31°C

24 – 30°C 24 – 31°C

21 – 30°C 23 – 30°C

24 – 31°C24 – 30°C 24 – 32°C

Partly cloudy to at times cloudy withrain showers and/or thunderstorms

HALF MOON

11:50 AMFEB 12

7:09 PMFEB 4

BAGUIO CITY11 – 22°C

24 – 31°C

11:07 PM0.98 METER

FEB 6FRIDAY

FEB 7SATURDAY

FEB 8SUNDAY

FEB 6FRIDAY

FEB 7SATURDAY

FEB 8SUNDAY

Cloudy skies with rain showers and/or thunderstorms

21 – 31°C

Light rains

Partly cloudy to at times cloudywith rainshowers

Partly cloudy skies

NORTHEAST MONSOON AFFECTING LUZON ANDEASTERN VISAYAS.

(AS OF FEBRUARY 4, 5:00 PM)

METRO MANILA20 – 30°C

Northeast Monsoon locally known as “Amihan”. It affects the eastern portions of the country. It is cold and dry; characterized by

widespread cloudiness with rain showers.

Pentagon. . . Continued from A8

BusinessMirror [email protected] Thursday, February 5, 2015A2

News

Continued from A1

Continued from A1

grid is concerned,” Lantin said. “RP Energy is committed to work-ing with all concerned government agencies in ensuring a reliable, sus-tainable and competitively priced supply of power that will contrib-ute to the continued progress of the country,” he added. The Subic project has been in the back burner since 2010, owing to a number of legal challenges hurled by those who are against coal-fired power plants. Had this project push through as scheduled, there would have been no anticipated power shortage in Luzon this summer. The Subic power project was originally supposed to come online this year. Energy Secretary Carlos Jerico L. Petilla said it would take about three years for RP Energy to finish construction. “Oversupply is a nice

problem to have, if ever it ends up in that manner. But, I think, the deci-sion is actually crucial, not because of power significance, but because it would have thrown all economic zones in danger if the decision was otherwise,” he said. “We bought a 600-MW gas-fired power plant in Singapore, and it took us about five months. We’re planning on building a 600-MW power plant in Subic, and that has been on the burner since 2010,” Meralco Chairman Manuel V. Pangilinan said. The total project cost is over $1 billion, according to Meralco Presi-dent Oscar Reyes. “Substantial expenditure has been invested—over P1 billion. The site prepara-tion is complete. We have to pro-ceed with the award of the EPC [engineering, procurement and construction] contract and final-ize the financial closing. We hope

to move on with this on or before the middle of this year,” he said, adding that the construction could take “roughly 42 months.” Reyes stressed the importance of the project, even if it is not go-ing to address this year’s power shortage. “The Luzon grid is in a catch-up mode. Luzon grid is in need of critical capacity in order to move from a very tight supply situation to one that al-lows more adequate reser ve. That is really the key to assuring supply reliability, availability and very competitive pricing,” he said. Petilla earlier urged lawmakers to come up with a bill that will hasten the construction of power plants. “This is to shorten some of the stumbling blocks in coming up with power plants. This is intended for energy projects. We want a bill that will fast-track the processing of per-mits and, if possible, no TRO [tempo-

rary restraining order] against these projects,” the energy chief said. “Will we do away with permitting? No,” Petilla remarked. “We have a law right now that any government project of national interest cannot be subject to a TRO, except for the SC. The problem is we cannot invoke that for power plants. It’s only for government projects.” “Maybe there could be someone who determines national inter-est. The President can sign. Malaca-ñang can come in and sign,” Petilla said, adding that these power proj-ects affect national interest. “This particular aspect of coming up with a power plant is very important,” he added. The DOE has been vocal in so-liciting the help of the private sec-tor to build more power plants to augment the lack of power supply. But the private sector is asking the government to diligently do its part.

Despite the SC’s nod, the anti-coal coalition in Subic said it con-tinues to oppose the project for using dirty fuel. In a statement issued on Wednes-day, the Subic Bay Chamber for Health and Environment Conserva-tion said it was disappointed over the SC ruling that set aside a writ of kalikasan against the proposed power plant, but pointed out that this did not erase the fact that coal is harmful to the environment and people’s health. “All should understand that a reversal of the validity of documents [does not mean] that SC justices fa-vor coal as fuel,” the group said. “We maintain our position that a coal-fired power plant is detrimental to the environment and the health of the people [and] we remain strongly opposed to the location of a coal-fired power plant in Subic Bay.”

With Henry Empeño

‘Subic plant key to supply reliability’

last year. In absolute terms, money supply hit P7.6 trillion at end-2014. An expanding cash supply is beneficial to a growing economy, as it fuels the productive sectors and increases the nation’s capacity to grow. However, an excessively high cash-supply growth in an economy for an extended period could heighten the country’s risks in developing in-stability pockets, such as asset bub-bles, and upside inflation pressures. On the other hand, an excessively low cash supply may be a dampener to growth and prove insufficient to finance the growing needs of the economy. The moderating liquidity growth, according to Guinigundo, is a part of the normalization process of M3 and should help push inflation lower going forward. Earlier in 2014 liquidity growth in the country pushed past the 30-per-cent territory and actually peaked in January last year at 38 percent. As a result, the BSP put in place several measures to soak on the so-called excess liquidity in the system through such mechanisms as a hike in the special deposits account in-terest rate and the banks’ deposit reserve-requirement ratio. The policy-making monetary board of the BSP is scheduled to hold its next rate-setting meeting on Feb-ruary 12, its first such meeting for the year. The BSP will, meanwhile, announce the January M3 at the end of February.

M3 EXPANSION JUST ENOUGHTO SUPPORT8% GROWTH

international footprint that includes ungoverned and undergoverned areas,” Stewart, who took command of the Pentagon’s spying arm last month, told the House Armed Ser-vices Committee in an annual review of national-security threats. The militant group’s appeal apparently extends to Canada. Police there on Tuesday charged three men suspected of having ties to an Islamic State recruiting cell in Ottawa. The three reportedly were try-ing to travel to Syria and were not plotting an attack in Canada when

they were arrested. Rear Admiral John Kirby, a Penta-gon spokesman, told reporters that Islamic State “has a fairly evangelical strain about it.” “They want to metastasize. They want to grow. They want to increase their influence,” Kirby said. “We’re watching it as closely as we can.” Stewart told the House committee that the al-Qaeda terrorist network’s dwindling and aging core leadership is “focused on physical survival” and is competing with Islamic State, a fac-tion, for followers and funding.

But al-Qaeda is “trying to retain its status as vanguard of the global extremist movement,” he said, and, thus, remains highly dangerous. Analysts expect some of its affili-ates to plot attacks against Western planes and facilities. Its offshoot in Yemen, known as al-Qaeda in the Arabian Peninsula, claimed responsibility last month for the shooting rampage that left 12 people dead in the offices of Charlie Hebdo, a satirical magazine in Paris that published cartoons about Islam.

The US reportedly has launched three drone strikes against al-Qa-eda targets in Yemen since Janu-ary 25, when President Obama announced that there would be no letup in US counter-terrorism op-erations despite a power struggle that toppled the American-backed government in Sanaa, the capital. A separate US drone strike last week killed a senior Shabab leader near Mogadishu, Somalia’s capital, accord-ing to Pentagon officials, who were not authorized to speak on the record. They said Yusuf Dheeq, Shabab’s

chief of intelligence and external operations, was targeted and that no civilian was killed. Shabab, an al- Qaeda-affiliated insurgent group, has threatened the US-allied govern-ment in Mogadishu and expanded into neighboring Kenya. The group claimed responsibil-ity for the September 2013 siege at an upscale shopping mall in Nai-robi, Kenya’s capital, that left more than 60 people dead. The greatest potential danger to the US, how-ever, comes from Russia and China, Stewart told the committee. MCT

Director Getulio Napeñas Jr., re-lieved commander of the SAF, also denied the statement of Armed Forces Chief of Staff Gen. Gregorio Pio Catapang Jr. that they did not coordinate with the military for the police operations against Jema’ah Is-lamiyah leader Zulkifli bin Hir, alias Abu Marwan, and JI-trained bomb maker Abdul Bassit Usman.

Napenas, who was relieved of his post as a result of the bloody opera-tions, said he could not keep silent when the honor of the “SAF com-mander and the whole SAF is already being destroyed.”

But the relieved commander avoided passing judgment, and urged waiting for the results of the investi-gation being conducted by the PNP Board of Inquiry.

“It will not be my words against the words of General Catapang. It will be the results of the Board of Inquiry,” Napeñas, said adding that the results should come along or be backed by evidence and documents.

The absence of a supposed coordi-nation by the SAF with the military was the reason the AFP was unable to send reinforcements on time to the commandos under enemy fire. This was claimed by military of-

ficials, and even by the probe that was also conducted by the Army’s 6th Infantry Division, under Maj. Gen. Edmundo Pangilinan.

Napenas spoke less than an hour after Catapang briefed reporters on the results of their probe, which centered on whether soldiers ap-propriately responded to the call for help by the commandos.

Catapang declared during the news briefing: “There is no shortcom-ing on the part of the AFP.”

The chief of staff added that the killed commandos sealed their fate after they, or their superiors, failed to coordinate with the mili-tary for the operation.

“That’s the price we have to pay for not having a well-coordinated op-eration,” he said, as he defended the actions of soldiers before and even during the time that the policemen were fighting guerrillas of the Moro Islamic Liberation Front (MILF).

“There is a need to coordinate, be-cause you are going to enter an area of the MILF,” Catapang said.

He said that, aside from the 105th Base Command of the MILF, the area is also populated by the 118th and 106th Base Commands of the same Moro group, the MILF

Consunji Inc. bought documents re-lated to the bidding; but all decided to not make an offer. The second round of bidding, however, saw no party buying bid documents. The multibillion-peso upkeep deal involves a three-year concession pe-riod and sweetened terms. Due to the failed bidding, the cur-rent upkeep provider, APT Global Inc., will continue maintaining the line, along with the shadowing team deployed by the transport agency. “To attract bidders, the DOTC [Department of Transportation and Communications] even relaxed the terms of the second bidding. This would be a step in the wrong direc-tion, as what is needed is the stricter implementation of safety require-ments and measures,” he said. “Noteworthy is the fact that the private owners were again not con-sulted for the terms of reference for the second bidding, again in violation of the build-lease-transfer agree-ment,” Sobrepeña added. The businessman also called on the government to base the up-grades on the recommendations of the experts from Hong Kong’s MTR Corp. Ltd. “The report showed the alarm-ing state of the MRT 3 system that we have been warning the public about,” he said. The report from the rail experts from Hong Kong showed that the overhead mass-transit system had major flaws in rails, emphasizing on the need to replace “unsafe tracks” that was backed by a four-fold in-crease in broken rails over a period of three years. “The present maintenance pro-vider has admitted that it has no spare rails. Clearly, rails must be

bought. The system is already under an emergency situation. A worldwide search must be made to find a ready and steady supply of rails from a reputable manufacturer,” he said. “In addition, the system must also be restored back to having all 73 cars operable to reduce not only the long queues but safety concerns as well,” Sobrepeña added. Not all of the train cars are be-ing deployed for daily operations, some were readied for emergency situations. Thankfully, the government is rolling out a P9.7-billion ven-ture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino. It includes the procurement of additional train coaches, train gen-eral overhauling, ancillary systems upgrade, platform edge doorstep, signaling-system upgrade, rail steel replacement, communications sys-tem upgrade, traction motors re-placement, and the improvement of the overhead catenary system. The rehab venture also includes: security fence and noise barrier, con-sulting services, upgrade of convey-ance facilities, a footbridge for the North Avenue Station, weather pro-tection cladding, Internet connec-tion, passenger information system, and passenger hand straps. A number of these, including the procurement of rails, have been awarded. Separately, local flagship of the Hong Kong-based First Pacific Co. Ltd. is proposing to shoulder the upgrade costs of the train system and free the government from pay-ing billions of pesos in equity rental payments. Metro Pacif ic Investments Corp. President Jose Ma. K. Lim

said his group will soon submit its $524-million proposal to the DOTC, which has already rejected the then $565-million offer. The lower budget for the offer, Metro Pacific Business Develop-ment Officer John B. Echauz ex-plained, stemmed from the removal of the automated fare-collection system and another component from the proposal.

The unified-ticketing system project was auctioned off by the transportation agency in 2013, and was awarded to the consortium between Metro Pacific and Ayala Corp. in 2014. The total $524 million also in-cluded the $30-million working capi-tal and the $229-million budget for the settlement of the government’s equity-rental payment.

The group of businessman Manuel V. Pangilinan earlier entered into a partnership agreement with the cor-porate owner of the MRT, a move that would have allowed the firm to invest roughly $600 million to improve the services of the train system. The venture would effectively ex-pand the capacity of the railway sys-tem by adding more coaches to each train, allowing it to carry more cars

at faster intervals. The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily. It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal. The government, on the other hand, intends to buyout the corpo-rate owner of the line, the MRT Corp., which is controlled by MRTH-II. The government aims to com-pletely takeover the line by the time President Aquino steps down from office in 2016. But recent delays, including the “tying up of loose ends,” are forcing the gov-ernment to double its efforts to effect the buyout. One of the requirements to execute the takeover is for the government to strike up a compromise deal with the private owner of the train line. This would effectively end the on-going arbitration case in Singapore that was lodged against the govern-ment in 2008 due to its failure, as the operator of the line, to pay billions of equity rentals payment to the owner of the rail system. Should the buyout be completed in 2016, the transportation agency may then bid out the operations and maintenance contract of the line, thereby tapping private-sec-tor efficiency and customer service orientation for operational needs, while retaining regulatory func-tions for passenger protection with government. Since 2004, the train system has been operating at overcapac-ity. Currently, the line serves nearly 550,000 passengers per day and even reached, at one point this year, the 650,000-daily passenger mark. It has a rated capacity of 350,000 daily passengers. Lorenz S. Marasigan

[email protected] Editor: Dionisio L. Pelayo • Thursday, February 5, 2015 A3BusinessMirrorThe Nation

Sobrepeña: MRT 3, at current state, will not attract investorsContinued from A1

and even private armed groups.Catapang also admitted that the

members of the pinned 55th Special Action Company are not also famil-iar with their coordinates. “It is up to them to give their coordinates.”

He said the soldiers could not reinforce the being mowed-down commandos because they do not know the area. And when members of the 62nd Division Reconnais-sance Company and the 8th Mech-anized Battalion finally moved in, they were met with volleys of fire, according to Catapang.

A tire of a V-150 and the other mechanized assets of the military were even hit by the enemy, he added.

“But we don’t know where the [line of] fire [was] coming from.”

However, Napeñas said the mili-tary knew the “continuing” opera-

tion even months before the Janu-ary 25 operation.

“We even gave them the coordi-nates of the engaged commandos at the time the fighting has barely began,” he added.

They also coordinated with the military “before and during the op-eration,” Napeñas said.

He added that, as the commandos were battling the swarming bandits, they sent the coordinates of the pinned police forces to PNP Officer in Charge Deputy Director General Leonardo Espina.

Napeñas said Espina forwarded the information to Armed Forces Western Mindanao Command com-mander Lt. Gen. Rustico Guerrero, who is his classmate at the Philip-pine Military Academy.

The coordinates were also known

by Army brigade commander Col. Gener de Leon, who was even inside the tactical command post where Napeñas and other SAF officials were directly monitoring the operation, and it was also forwarded to Pang-ilinan, Napeñas said.

No less than Defense Secretary Voltaire Gazmin earlier said that the engaged commandos coordinated with military units in the area on their way to their objective.

Napeñas admitted that suspend-ed PNP chief Alan Purisima knew the whole operation.

Espina also admitted in his news briefing that while he knew about the operation, he was not informed of its period of execution.

The relieved SAF director said that the SAF operation began in April last year.

SAF 44 killings turn into PNP-AFP word warBy Rene Acosta

THE killings of 44 police commandos are degenerating into a nasty war of words between

the Philippine National Police and the military, as no less than the relieved commander of the Special Action Force (SAF) belying claims they did not give the locations of pinned commandos so that the Armed Forces of the Philippines (AFP) can send reinforcements.

BOTH the chiefs of the Philippine National Police (PNP) and the Armed Forces

of the Philippines (AFP) assured on Wednesday that any effort by groups to solicit support from the police and the military for a coup against the Aquino administration will get nothing.

Deputy Director General Leonardo Espina and Gen. Gregorio Pio Catapang Jr. said both the police and the military were behind President Aquino amid issues surrounding the death of 44 members of the PNP-Special Action Force.

The assurances came amid a word war between the police and military, with the PNP partly blaming the military over the massacre of its members in Mamasapano, Maguindanao.

Several groups have warned that a coup is in the offing against Mr. Aquino over his handling of the death of the police commandos, with Roman Catholic bishops even warning that a repeat of the Edsa revolt is imminent.

But Espina and Catapang said these groups cannot turn to the uniformed services for support. “We are solidly behind the President,” Espina said on Wednesday. On the other hand, Catapang said President Aquino has the mandate and he should finish his term.

“The election is coming soon, so I think it’s better to, we have to allow the president to finish his term because he is the duly elected, duly constituted authority of the country,” he said. Rene Acosta

No coup, police and military chiefs assure

NOT SWEET Rescuers search for more casualties, as part of an ongoing construction of Ayala Land Premier’s The Suites in Bonifacio Global City in Taguig collapsed on Wednesday morning. According to the authorities, part of the building collapsed while cement was being poured on the upper floors. In a statement, Labor Secretary Rosalinda Baldoz said she has ordered a halt to the construction indefinitely. AlysA sAleN

BusinessMirror [email protected] A4

Economybriefs

bill strengthens operations of nlrcTO enhance the just and expeditious resolution of labor disputes, the House Committee on Labor and Employment has recently reported out for floor deliberation a measure strengthening the operations of the National Labor Relations Commission (NLRC). House Bill 5306, authored by Liberal Party Rep. Karlo Alexei B. Nograles of Davao, amends Articles 213 and 215 of Presidential Decree 442, as amended, otherwise known as the Labor Code of the Philippines. According to Nograles, chairman of the the House Committee on Labor and Employment, “labor relations is a very dynamic field of endeavor, thus, labor relations clime could change drastically and in a fast pace, dictated as it is by economic developments or situations in the industry, region, country and the world, as well.” “Because of such realities, agencies with mandates related to management of labor relations, such as the NLRC, must be endowed with such degree of flexibility as to immediately adapt to varying industrial relations scenarios,” Nograles added. The bill, which was coauthored by Party-list Rep. Raymond Democrito C. Mendoza of Trade Union Congress of the Philippines, promotes the expeditious resolution of labor cases filed at the NLRC by providing the agency with more flexibility in the management of its manpower. The measure increases from a maximum of three to five the number of commission attorneys that can be assigned to the Office of the NLRC chairman and each commissioner. Jovee Marie N. dela Cruz

no cause to raise tariff on newsprint importTHE government has found no cause to temporarily raise tariff on newsprint imports, according to an official of the European Union (EU) Delegation in Manila.

The trade office has conducted a preliminary investigation, and has forwarded the matter to the Tariff Commission but without a recommendation of provisional safeguard measures, which may range from tariff hike to import ban, Walter van Hattum, head of the trade and commercial section of the EU Delegation in Manila said.

Trust International Paper Co. (Tipco) early last year asked the Department of Trade and Industry to impose safeguard measures on newsprint imports, saying the practice has damaged its operations.

The EU is among the trading partners affected by the petition of Tipco to impose safeguard duties on newsprint imports, as safeguard measures are, in general, directed toward all the trading partners of the complainant-country. The EU, along with other countries trading with the Philippines, has been actively following the case as the imposition of safeguard measures is deemed a “drastic move” to protect the domestic industry. Catherine N. Pillas

By Joel R. San Juan

THE Supreme Court (SC) has dis-missed the bid of Department of Budget Management (DBM)

Undersecretary Mario Relampagos to stop the Sandiganbayan from con-ducting any proceedings in connec-tion with the graft cases filed against him for his alleged involvement in the P10-billion Priority Development As-sistance Fund, or pork-barrel, scam. SC Public Information Office Chief Theodore Te said the High Tribunal denied Relampagos’s plea for the issu-ance of a temporary restraining order against the Sandiganbayan’s proceed-ings against him during Tuesday’s en banc session. “The Court denied the application of petitioner for a temporary restrain-ing order and/or writ of preliminary injunction,” Te said. The SC, however, directed the re-spondents—the Sandiganbayan and Office of the Ombudsman—to com-ment on the petition within 10 days from receipt of notice. Relampagos earlier asked the SC to issue an injunction against the anti-graft court’s Third Division which is handling the graft cases filed against him and other respondents in the pork-barrel scam allegedly perpetrated by businesswoman Janet Lim-Napoles. He questioned the anti-graft court’s denial of his petition challenging the Ombudsman’s finding of probable cause against him in connection with the scam.

It can be recalled that the Om-budsman has indicted Relampa-gos and his staff, Lalaine Paule, Marilou Bare and Rosario Nunez for allegedly acting as Napoles’s contact in the DBM to facilitate the release of Special Allotment Release Orders and Notice of Cash

By Manuel T. CayonMindanao Bureau Chief

DAVAO CITY—Muslim busi-ness leaders have formed a Mindanao-wide busi-

ness chamber and pushed for wider support to establish more Islamic-friendly businesses in the major cities of Mindanao.

Marilou W. Ampuan, president of the Mindanao Islamic Chamber of Commerce and Industry (Micci), said the organization was still con-centrated here but organizers have already established communication with the local business chambers in other urban centers in Mindanao.

The group already has five af-filiate members coming from local business chambers in Muslim areas

and 30 businessmen. Fifteen other business groups and individuals have applied for membership.

The Micci has worked closely with the Davao regional office of the Department of Tourism (DOT) to popularize and convince hotels, res-taurants and other tourism players here to adapt halal practices.

Ampuan said that, while a siz-able number of Muslims reside in Mindanao, many cities remained inadequate to cater to the rich ha-lal market. Halal prescribes specific practices in food processing and preparation under Islamic laws.

“Becoming halal-friendly, at least, could offer opportunity to a huge market of halal-looking consumers from Muslim countries in Asia and the Middle East,” Ampuan said.

She admitted that organizers here have difficulty looking for food establishments that offer halal-pre-pared food for large groups of foreign Muslim leaders and tourists.

Ampuan said the Micci has pre-pared the required documentary and official coordination with govern-ment agencies to apply as a certifying body for halal. The completed applica-tion would be filed with the National Commission on Muslim Filipinos, the policy-making body for halal practices and other Muslim affairs.

She added that MICCI is working with the DOT to persuade more busi-ness establishments here to become halal-friendly, or complying with the minimum practices, such as remov-ing, or segregating pork from the rest of the food menus in a food business.

Thursday, February 5, 2015 • Editors: Vittorio V. Vitug and Max V. de Leon

Muslim traders form Mindanao business chamber

However, despite these issues, t he country still has an edge over ot her competitors, Executive Di-rector for Ex-ternal Affairs

and Membership of the Information Technology and Business Process As-sociation of the Philippines (Ibpap) Genny Inocencio-Marcial said.

Inocencio-Marcial was one of the resource speakers during the First Public-Private Dialogue on Services held here as part of the First Senior Officials’ Meeting of the Asia-Pacific Economic Coop-eration (Apec) being hosted by the Philippines.

Clients prefer the Philippines to other countries due to its huge pool of educated workers, she said, noting that the country produces half-a-million college graduates each year.

The Philippines has a total popu-lation of 100 million, with more than 39 million within the working age.

Of the total number of graduates, more than 3,000 are certified public accountants who create a huge value for accounting work being done in the Philippines.

In terms of cost competition, the labor cost for English-speaking professionals in the Philippines is still among the lowest in the world, Inocencio-Marcial said.

The country also has a predict-able and manageable inflation and very good IT infrastructure, she said, adding that the Philippines has good round-the-clock trans-

portation and a lot of IT economic zones.

According to Inocencio-Mar-cial, the Ibpap is aggressively partnering with the government, and government investment pro-motions agencies, such as the Phil-ippine Economic Zone Authority and the Board of Investments, are very supportive.

She further noted that the in-dustry enjoys numerous incentives from the government, such as tax exemptions, and that there are ongo-ing talks in both houses of Congress on bills seeking to rationalize fiscal incentives for the sector.

The Philippines, she said, has a proven track record in voice services, basically in customer care, technical support, financial services, and sales and collections.

The industry recorded a year-on-year compounded annual growth rate of 25 percent in 2013 and closed the year with revenues amounting to $16.1 billion.

Employees of the IT-BPM in-dustry increased from 917,000 in 2013 to more than 1 million in the last quarter of 2014, Inocencio-Marcial said.

In an IT-BPM event in Pasay City last week, President Aquino pledged additional support to make the sec-tor more competitive.

This year the government is set to expand its support for the sector by allotting P443.6 million to education and training, a significant increase from its P304.5-million budget in 2014, Mr. Aquino said.

This initiative is being done through the Technical Education and Skills Development Author-ity. PNA

High-power cost threatens PHL’s stature as leading IT-BPM destination, exec says CLARK FREEPORT ZONE—

The Philippines is losing to India in some areas in information

technology and business-process management (IT-BPM) because of the high cost of power and other factors, an industry leader said on Tuesday.

SC denies Relampagos’s plea for TRO

handyman on the roll A street entrepreneur drives his motorcycle loaded with different household utensils that carry much lower price tag compared to similar items from the mall. NONIE REYES

Allocations for the lawmaker’s pork- barrel allocation. They were among the 25 govern-ment officials and employees who al-legedly helped funnel the pork-barrel allocation of lawmakers to bogus non-governmental organizations es-tablished by Napoles.

mArciAl

leather culture Photo shows a man shopping for cowboy boots in Baguio city. cold upland temperature and a cowboy culture among males in the summer capital drive the demand for local and imported cowboy boots that could fetch as high asP10,000 a pair. Mau VIcta

briefslawmaker cites clamor

vs mrt 3, lrt 1, 2 fare hikesA lAwmAker on wednesday urged the House of representatives to defer the additional fare hikes at the light rail Transit lines 1 and 2 and metro rail Transit 3, which was recently implemented by the Department of Transportation and Communications (DOTC). United Nationalist Alliance rep. Gus Tambunting of Parañaque, in House resolution 1881, said that there is a growing public clamor against the mrT and lrT fare increase, alleging that it is unjust and arbitrary imposition. He said the government should solve first frequent breakdowns due to mismanagement before increasing the fare. “There is also a growing public dismay in the deteriorating operating condition and service of the mrT and lrT,” he said. “The operation of mrT and lrT is seemingly performing way below expectation as it continue to succumb to frequent malfunctions and technical glitches, leaving the commuters in disarray,” Tambunting added. The lawmaker, citing the Philippine Statistics Authority-National Statistical Coordination Board, said that, in 2012, the total number of mrT passenger is 174.5 million and lrT is 170.7 million, while the lrT 2 is 70 million. The fare adjustments which took effect on January 4, mark the first such hike in ticket prices for metro manila’s train riders in a decade. The base fare for the lrT lines 1 and 2 and the mrT is now P11, and an additional P1 will be charged for every kilometer from the station of origin. This means that a single journey ticket from Baclaran station to roosevelt station will cost P30 from the present fare of P20. Passengers, who use stored- value tickets for end-to-end trips on the lrT 1 and 2 will get a P1 discount. For mrT 3 single journey and stored value tickets from Taft station to North Avenue station or vice versa, the journey will cost P28 from the current P15. The DOTC said the fare adjustments would enable the government to save P2 billion in annual subsidies, or 17 percent of the P12 billion that it allots each year to subsidize the lrT and mrT train systems. Jovee Marie N. dela Cruz

palace still vetting new aquino appointees to vacant key postsmAlACAñANG is taking time to finish its rigid scrutiny of potential Palace nominees to a number of looming vacancies in key government posts, including at least four Constitutional Commissions, that President Aquino must submit to Congress for confirmation soon enough. “we are working on it,” Palace Communications Secretary Herminio B. Coloma Jr. told the BusinessMirror, when asked if the Palace was ready to fill the void that mr. Aquino is expected to fill with competent appointees with known integrity. Coloma, however, did not divulge the names of candidates in the Palace list of possible replacements from which Aquino was to pick those the President would endorse to undergo confirmation proceedings at the Commission of Appointments. The Palace is pressed for time to fast-track screening new appointees as incumbents in vital government bodies started to be vacated by retired incumbents, beginning with Commission on elections Chairman Sixto Brillantes Jr. who stepped down early this week, along with Commission on Audit Chairman Grace Pulido-Tan. Butch Fernandez

By Catherine N. Pillas

The garments industry in the Philippines may receive a much-needed shot in the arm as a result of the country’s qualification for

the preferential trade arrangement under the european Union Generalized System of Prefer-ences (eU-GSP+), according to the Department of Trade and Industry (DTI). But the trade office said that to maximize the benefits of eU-GSP+, the garments and textiles industry road map should be fast-tracked, and both are seen to be completed by year-end. “If you look at the last four years, the gar-ments have been having a little comeback in terms of export value and employment; it’s been increasing. With the eU-GSP+, this can be a tremendous boost to the garments industry. Garment manufacturers, small and large ones are gearing up for this eU-GSP+,” Trade Secretary Gregory L. Domingo said at a news conference of CS Garments Inc. “We expect the garment sector to be robust because of the eU-GSP+. I think some of those who left may be coming back. And if they are coming back, suppliers of raw materials will also be coming back,” Philippine economic Zone Au-thority Director General Lilia B. de Lima said at the the same news conference. CS Garments Inc. is a German-owned com-pany exporting high-end market shirts to europe

that has been operation in the Philippines for over 25 years. The said firm specifically cited the need for the government to attract more manufactur-ers of raw materials as it is currently importing 80 percent of its raw material from abroad for cost-efficiency. The dearth of raw materials in the industry is an offshoot of the garment industry’s decline beginning in the mid-90s. At that time, a World Trade Organization agreement allowing prefer-ential tariffs and quotas to apparel and textile imported the United States, Canada and europe, was beginning to be phased out. The increased global competition following the development led to the decline of the gar-ments industry’s exports in countries with small production volumes like the Philippines. Given that the availment of the eU-GSP+ benefits is hinged on domestic content require-ment for particular goods, the availability of locally sourced materials is significant. For this purpose, Assistant Secretary for In-dustry Development and Trade Policy Rafaelita Aldaba said that the textile and garment industry road maps is likely to be completed by year-end. “We are formulating a road map for garments and textiles industry. It’s important because it will provide direction and identify challenges affect-ing development of both and link them together. We’re hoping by end of this year, we'll be able to

This was the position aired by the militant group Bagong Alyansang Makabayan (Bayan), one of the nine petitioners in the case questioning the constitutionality of the DAP.

In a news statement, Bayan Secretary-General Renato Reyes Jr. also downplayed the modifi-cation made by the High Court in its latest ruling, which now al-lows funding of projects and pro-grams not covered by the General Appropriations Act (GAA).

Reyes cited the portion of the decision that provides for liability of “authors” of the DAP, “unless there are concrete findings of good faith in their favor by the proper tribunals determining their crimi-nal, civil, administrative and other liabilities.”

“The latest SC decision should now pave the way for holding Presi-dent Benigno Aquino III and Budget Secretary [Florencio] ‘Butch’ Abad accountable for large-scale corrup-tion, bribery and malversation of public funds. They are the principal

‘authors’ of the DAP who should be investigated and made accountable. Abad concocted the DAP, while Aqui-no signed all the DAP memoranda that illegally pooled the savings from various implementing agen-cies,” he said.

Abad, seen as the designer of the DAP, has been charged with plunder in connection with the funding program.

The group already said earlier it also plans to file similar charges against President Aquino once he steps down and loses immunity from suit.

Reyes also rebutted the claim of the Palace that the latest ruling where the SC partially reconsidered its appeal, was a “de facto reversal.”

“Malacañang cannot claim the SC DAP ruling as a victory for its fiscal dictatorship and impunity. The ruling does not exculpate the President. On the contrary, it says that the actual accountability of the authors of the DAP need to be de-termined by the proper tribunals,” he explained.

[email protected] Thursday, February 5, 2015 A5BusinessMirrorEconomy

“Despite the SC modifications, the DAP, by and large, remains unconstitutional. The ruling on il-legally declared savings and the il-legal cross-border transfer of funds were upheld. The authors of the DAP should still be held accountable,” Reyes added.

But while the portion of the de-cision on the liability of “authors” of the DAP is considered an obiter dictum or a “by the way” statement or surplusage not needed or relevant to disposition of the case, SC Spokes-man Theodore Te stressed that it could be used as basis for filing of case against said authors.

Te said the authors would have to be identified by the proper body.

Te explained that while the obiter dictum is not necessary for the reso-lution of the case, it does not mean it has no jurisprudential value.

“It is still part of the decision, but it’s not doctrinal, at least not yet,” he noted.

“Since it forms part of the deci-sion, it can be used [to file cases]; but if it is used as authority or precedent in a similar case, then it may be ar-gued that, since it was obiter, it does not constitute precedent, unless the SC decides that it will adopt a previ-ous obiter as ratio in the new case,” he pointed out.

Defeat for aquinoPARTy-lIST Rep. Terry l. Ridon of Kabataan is puzzled why President Aquino and Abad are rejoicing over the final ruling of the SC that af-firmed the unconstitutionality of the DAP. “The Aquino administration is misleading the nation by labeling the latest SC decision on the DAP as a de facto reversal’” of the July 1,

2014, decision. There is no reason for the Palace to rejoice, especially as the SC—in large part—affirmed and upheld the DAP’s unconstitutional-ity,” Ridon stressed.

In the SC’s final ruling on DAP issued on Tuesday, the High Court partially granted the motion for reconsideration of the Office of the Solicitor General, reversing its ruling on the portion about the augmenta-tion of funds for projects, activities and programs not covered by any appropriation in the GAA. This, in effect, reduced the num-ber of unconstitutional acts under DAP from four to three. “The Palace is emphasizing this point, as if it were an unequivocal victory on their part. let us re-member, however, that that part of the ruling does not reverse the fact that the government cannot create new items not found in the GAA and realign savings to such items,” Ridon explained.

Ridon noted that even the SC spokesman explained that the modified interpretation “nonethe-less does not take away the caveat that only DAP projects found in the appropriate GAAs may be subject of augmentation by legally accumu-lated savings.”

“The question remains: Did the 116 DAP projects have legitimate appropriation covers, or were these projects totally new concoctions by the Executive branch? We reviewed the projects, and we believe that the latter is correct. In other words, the argument that Aquino and Abad used the DAP to commit malversa-tion of public funds still stands,” Ridon argued.

He also stressed that nothing has changed in the three other acts

under the DAP previously declared unconstitutional by the SC, includ-ing the withdrawal of unobligated allotments and the declaration of such as savings, the “cross-border” transfer of savings; and the use of unprogrammed funds despite the absence of a certification by the National Treasurer that the revenue collections exceeded the revenue targets.

“While the SC also removed the words ‘proponents’ and ‘imple-menters’ from the list of those who can be held liable for the DAP, the High Court has retained the word ‘authors.’ Essentially, the SC is just reiterating that DAP is unconstitutional, and its mas-terminds—no other than Aquino and Abad—should be held liable,” Ridon said.

looking for legal options MAlACAñANG has yet to firm up its legal options in the wake of a recent SC ruling holding li-able unnamed Executive officials who “authored ” the outlawed DAP devised by Abad to divert mid-year “savings” to bankroll various administration programs and projects. Asked if Palace lawyers would still move to appeal that part of the unanimous SC ruling affirming the DAP as unconstitutional, Com-munications Secretary Herminio B. Coloma Jr. admitted they still have to fully comprehend the impact of the latest verdict handed down by the Justices. “We need to read the entire deci-sion and understand its full implica-tions,” Coloma said in a text message to Palace reporters on Wednesday. With Butch Fernandez and Marvyn Benaning

sc ruling on Dap paves way for aquino, abad’s prosecutionBy Joel R. San Juan

THE ruling of the Supreme Court (SC) that affirmed the liability of the “authors” of the

Disbursement Acceleration Program (DAP) should pave the way for the investigation and possible prosecution of President Aquino and Budget Secretary Florencio B. Abad for bribery and malversation of funds.

ClARK FREEPORT, Ange-les City—Senior officials of member-economies of the

Asia-Pacific Economic Cooperation (Apec) on Tuesday began holding dialogues that seek to create a new framework cooperation that would promote and advance services in the Asia-Pacific region.

Senior analyst of the Apec Policy Support Unit Gloria O. Pasadilla said that the ultimate objective of the Public-Private Dialogue on Services is the creation of a framework on a cooperation mechanism that could help promote services and, at the same time, lower barriers on trade and investment.

Pasadilla said, although services

have already been tackled in vari-ous working groups, such as those on health, tourism, transportation, information technology, energy, human-resources development, tel-ecommunications, and small and medium enterprises, the Apec has no coordinating mechanism in place.

“So far, the Apec has no coordi-nating framework on regulations and capacities,” she said at the start of the Public-Private Dialogue on Services at the ongoing Apec Senior Officials’ Meeting held at the Fon-tana leisure Resorts here.

The 2015 Public-Private Dia-logue on Services is the first of a series of dialogues envisioned to guide the Apec’s public and private

stakeholders in fostering collabora-tion and best-practice exchanges for services growth.

Pasadilla expressed hope that, through the series of dialogues, senior officials of the Apec member-econ-omies would be able to understand the intricacies of universal services.

“We hope that Apec’s public and private stakeholders would be able to examine the developments, chal-lenges and opportunities for the serv-ices sector; identify new strategies for building the full potential of the service sector; generate policy options toward removing barriers to services trade; and develop an innovative ap-proach, pursuing the services agenda of Apec,” she said. PNA

Apec execs push for enhanced cooperation to promote services sector

say it with flowers A mother and daughter team operating a flower shop at the Dangwa district in Manila, also known as Metro Manila’s flower capital, prepares for the expected influx of customers with the approach of Valentine’s Day next Saturday. The days preceding “love day” is expected raise the demand for cut flower and fresh-flower arrangements that will raise the price of the dainty and fragrant commodity by as much as 300 percent. ALySSA SALen

lpg price rollback Petron, one of the biggest oil refiner in the country, has announced a price rollback of about P1.45 per kilogram of their Gasul and Fiesta liquefied petroleum gas (LPG) and P0.81 per liter for Xtend Auto LPG, amid the global plunge in oil and LPG prices this month. Other LPG players are also expected to follow the rollback. STePhAnIe TUmAmPOS

PHL’s EU-GSP+ entry seen to revive garments industry

complete both,” Aldaba said. Aldaba said that the road maps will work on building the two industries by addressing chal-lenges including high power costs that discour-

ages investors from locating, the importation of raw materials, and availability of accessories and inputs to be used by garments manufacturers to move up the value chain.

“By doing the road map we can come up with business models to be used by our investment promotion agencies when they promote the in-dustry abroad,” Aldaba said.

Thursday, February 5, 2015

OpinionBusinessMirrorA6

Investments in peaceeditorial

GROWTH, both social and economic, thrives in an atmosphere of peace and cast-iron certainty for that peace to continue in the future. Any dis-ruption of that environment by violence, even

small and isolated, strikes at all attempts for develop-ment where it hurts the most: investment.

Terrorism has hurt economies more than the natural cycle of boom and bust. Based on the paper by Khusrav Gaibulloev in the Journal of Peace Re-search “The Impact of Terrorism and Conflicts on Growth in Asia,” violence creates serious and costly ramifications for growth.

Too often, terrorist organizations hit countries where their damage can cause the greatest harm. Based on the Gaibulloev study, Euskadi Ta Askata-suna (ETA), an armed Basque nationalist and separatist organization, targeted hotels and resorts in the 1980’s to shake the tourism industry in Spain. The same is true with the Islamist extremist group, Jemaah Islamiyah.

Gaibulloev also said the al-Qaeda terrorist network’s attack on the World Trade Center cost close to a hundred million dollars “in direct and indirect economic losses,” severely impacting the global stock markets.

Back here at home, the presence of Malaysian terrorist Zulkifli bin Hir, a.k.a. Marwan, jeopardizes not only the ongoing peace accord between the Philippine government and the Moro Islamic Liberation Front (MILF), it also hinders campaigns to convince investors to invest in Mindanao.

Several factors come into play. Terrorism forces government to focus its expenditure on proactive measures to capture terrorists and hinder their as-sets from funding the organizations.

Further terror campaigns thwart development by raising the cost of doing business “in terms of higher wages, larger insurance premiums,” and more out-lays. These extra expenditures result in reduced profits and smaller returns on investment. The study also included destruction of infrastructure during terrorist bombings, which disrupts business in the area.

The Irish Republican Army attacks at London’s Baltic Exchange in 1992 and the Bishopsgate bombing, (a major thoroughfare in London’s financial district), the year after, respectively cost £800 million and £350 million in direct damages.

Ultimately, violent attacks can severely impact gross domestic product per-haps not immediately but in the longer term. But tourism and transportation infrastructure and facilities for example are both particularly vulnerable to attacks and can create immediate economic disputation.

The recent wave of attacks in Mindanao raises questions as to the effective-ness of the government’s campaign to secure peace and order. The operations to extract Malaysian terrorist Marwan within the marshlands of Mamasapano, Maguindanao, have cost government money, credibility, future economic suc-cess and most sadly the precious lives of 44 elite police officers,

This administration must rethink its strategy on how to finally end hos-tilities without undue and perhaps unnecessary loss of human life. The lives we lost that day in Mamasapano were our investments in peace. To lose our investment in peace is also to lose our chance at genuine and sustainable social and economic growth.

OVER the last several months, I have described the global financial and asset markets in chaos using the traditional definition of “complete disarray and turmoil.” The price

movement of crude oil in the last two weeks is an example of that.

THE Reserve Bank of Australia, that Asia-Pacific bastion of hard-money policies, has just joined a dozen other monetary powers in slashing rates as the risk of deflation deepens. The

move by Governor Glenn Stevens surprised many and demonstrates how our chaotic times are rewriting the laws of central banking.

The boom/collapse scenario

Australia joins the rate-cutting party

An unmanipulated pricing mech-anism should account first for basic supply and demand as the primary determinate of the price of any good or service. Then expectations of those two factors in the future would also be factored in to the price.

Yet demand for oil is not growing while supply is constant-to-rising. The nearly 9-percent increase in the oil price has been rationalized by the idea that lower prices have caused some oil production in the US to be cut back. Capital expenditures in the industry for 2015 are reduced and the amount of drill rigs being used is sig-nificantly lower than even a month ago. All of this is supposed to reduce supply in the future. But this is all speculation as no one can estimate how much oil production might go down or how much closer supply and demand will come together.

But this supports the idea of ‘cha-os’; disorder and confusion.

The original Greek word meant a ‘gap’ or ‘hole’ from which something would follow, in ancient thought, the creation of the world. In our case, it may the creation of a “New World.”

Contrary to popular belief, the global “Great Depression’ was not a result of the 1929 US stock market crash. That event was a symptom but not the illness. Bank lending, al-lowing one dollar of cash to buy ten dollars worth of stocks, caused banks to fail when the market, as markets always do, went down.

The Great Depression actually started when one major bank in Aus-tria, Creditanstalt (CA), failed. The bank went down because its major borrower could not pay its debt. The Austrian government forced CA to absorb the loss and then eventually bailed out the bank sometime after it went bankrupt.

Many times I have talked about the Philippine peso exchange rate

and its relation to both the PHL economy and the local stock market. Global capital flows are the most im-portant aspect of the world economic system. Nearly everything else is a result of these flows. It was as true 100 years ago as it is today.

The failure of bank CA and the resulting pressure on the Austri-an government’s financial health caused money to flee first to Ger-many. But Germany was in no better condition because of the financial restraints from the World War I treaty. Capital then fled to Britain. Here also capital did not find a safe haven. It eventually moved to the US as sovereign debt collapsed in those countries.

The US stock market bottomed out from the crash at the same time foreign capital moved in. That for-eign capital also marked the begin-ning of the US economic recovery with the gross domestic product growing from $57 billion in 1933 to $93 billion four years later. The Dow Jones Industrial Average moved from 41 to 195 in the same period.

Then the market crashed again losing 50 percent in one year-and this is important- as interest rates skyrocketed by 50 percent to stop the capital flight to the US which caused a strong dollar.

Here is the point of all this.We are seeing a modest capital

flight into the US Dollar. The US stock market is still going higher.

But a real bull market bubble only happens when it is fueled by foreign capital flows targeting one nation. Capital poured into Japan after the 1987 US stock market crash creat-ing the 1989 Japanese stock mar-ket bubble.

Greece may be the new Credi-tanstalt causing a domino effect of debt default in Europe. Money will flee to the US creating a stock market bubble and an eventual increase in interest rates as the bubble becomes obvious and then a crash will ensue.

The only accurate way to mea-sure capital flows in the currency exchange rate. While it is true that central banks can manipulate rates, they cannot do it forever. Thailand’s stock market more than doubled between 1993 and 1994 and then crashed.

We watch the peso to see if too much foreign capital is moving in. Currently there is stability but in-vestors–and the central bank–must not let the guard down.

The Philippine stock market is not in a bull market bubble as it is fueled with domestic funds and neither is the economy for the same reason.

E-mail me at [email protected]. Visit my web site at www.mangunon-markets.com. Follow me on Twitter @mangunonmarkets. PSE stock-mar-ket information and technical analysis tools provided by the COL Financial Group Inc.

Until recently, Stevens and his hawkish ilk acted according to the William McChesney Martin school of money management. Martin is the former Federal Reserve governor who famously said a central banker’s job is to “take away the punchbowl just as the party gets going.” These days, it’s to leave the monetary brew out on the table and steadily strengthen it. This worries purists, who think central bankers acting as enabling bartenders only fuel the next asset bubbles.

The issue Down Under is property. Economist Craig James of Common-wealth Bank of Australia speaks for many when he says that as the RBA cuts rates, the risk is that “people will

decide to put more of their money into the housing market, thinking it’s an easy way to make money. We would be concerned about that and too much stimulus is going into the economy.” Lower oil prices and a 9 percent drop in the Aussie in 12 months, he says, are stimulus enough. The RBA cut the overnight cash rate anyway–by 25 basis points to 2.25 percent.

Stevens can avoid adding to Aus-tralia’s asset imbalances, however. All he needs to do is emulate what his peers in Wellington, New Zealand, and Singapore are doing to minimize housing bubbles without being total economic party poopers.

First, New Zealand, the place that pioneered the kind of inflation

targeting that countries such as Ja-pan are now trying. In Wellington, Reserve Bank of New Zealand Gov-ernor Graeme Wheeler has been ex-perimenting with strategies to deflate bubbles without killing the economy. Mostly, that’s meant so-called mac-roprudential policies, tools that Paul Krugman and other economists ad-vocated using after the 2008 global crisis. Wheeler ran with the idea be-ginning in 2013, embracing curbs on leveraged lending such as the “10/80 rule.” This requires that no more than 10 percent of mortgages be underwrit-ten with loan-to-valuation ratios of more than 80 percent. It’s a means of controlling excessive household debt that weakens consumer balance sheets and fuels bubbles. Bankers who try to circumvent these regulations lose their licenses.

While this is still a work in prog-ress, New Zealand’s performance–growth of 3.2 percent and inflation of just 0.8 percent–already speaks for itself. Though house prices rose 6 percent in 2014, that’s a far cry from the 15 percent annual house-price inflation that existed just before the global crisis hit. In those days, Wheeler’s predecessor Alan Bollard hiked short-term rates to a record high of 8.25 percent. Now, as com-

modity prices slide and China slows, New Zealand’s central bank has room to lower rates (now at 3.5 percent) without fueling the housing markets.

Singapore’s handiwork also is worth a look. Since 2013, the tiny city-state has been ramping up ef-forts to bring down record property prices. Steps have included a cap on debt at 60 percent of a borrower’s income, an increase in real-estate taxes and higher stamp duties on home purchases. Slowly but surely, the curbs have reined in property values. Residential prices are down as much at 8 percent from their mid-2013 peak, while prices in Hong Kong continue to race higher. Granted, Singapore’s $298 billion economy is just one-fifth the size of Australia’s. Still, Stevens–and many other cen-tral bankers around the globe–could learn from what Singapore has done.

In today’s policy statement, the RBA said that it’s “working with other regulators to assess and contain eco-nomic risks that may arise from the housing market.” Let’s hope it means that macroprudential steps will soon be taken in Sydney. As China slows, resource-dependent Australia needs all the inspiration it can get to keep businesses and households in a partying mood.

HOM

BusinessMirror A broader look at today’s business

Publisher

Editor in Chief

Associate EditorNews Editor

City & Assignments EditorSpecial Projects Editor

Online Editor

Research Bureau HeadCreative Director

Chief Photographer

Chairman of the Board & OmbudsmanPresident

VP-FinanceVP-Corporate AffairsVP Advertising Sales

Advertising Sales Manager Circulation Manager

T. Anthony C. Cabangon

Jun B. Vallecera

Jennifer A. NgDionisio L. PelayoVittorio V. VitugMax V. de Leon

Ruben M. Cruz Jr.

Dennis D. EstopaceEduardo A. DavadNonilon G. Reyes

Judge Pedro T. Santiago (Ret.)Benjamin V. RamosAdebelo D. GasminFrederick M. AlegreMarvin Nisperos EstigoyAldwin Maralit TolosaRolando M. Manangan

BusinessMirror is published daily by the Philippine Business Daily MirrorPublishing, Inc., with offices on the 3rd floor of Dominga Building III

2113 Chino Roces Avenue corner De La Rosa Street, Makati City, Philippines. Tel. Nos. (Editorial) 817-9467; 813-0725. Fax line: 813-7025.

(Advertising Sales) 893-2019; 817-1351, 817-2807. (Circulation) 893-1662; 814-0134 to 36. E-mail: [email protected].

www.businessmirror.com.ph

regional offices

Printed by brown madonna Press, Inc.–San Valley Drive KM-15, South Superhighway, Parañaque, Metro Manila

Ambassador Antonio L. Cabangon ChuaFounder

nDXQR -93dot5 HOME RADIO CAGAYAN DE ORO STATION MANAGER: JENNIFER B. YTING E-MAIL ADDRESS: [email protected] ADDRESS: Archbishop Hayes corner Velez Street, Cagayan de Oro City CONTACT NOs.: (088) 227-2104/ 857-9350/ 0922-811-3997

nDYQC -106dot7 HOME RADIO CEBU STATION MANAGER: JULIUS A. MANAHAN E-MAIL ADDRESS: [email protected] AD-DRESS: Ground Floor, Fortune Life Building, Jones Avenue, Cebu City CONTACT NOs.: (032) 253-2973/ 234-4252/ 416-1067/ 0922-811-3994

nDWQT -89dot3 HOME RADIO DAGUPAN STATION MANAGER: RAMIR C. DE GUZMAN E-MAIL ADDRESS: homeradiodagupan@ yahoo.com ADDRESS: 4th Floor, Orchids Hotel Building, Rizal Street, Dagupan City

CONTACT NOs.: (075) 522-8209/ 515-4663/ 0922-811-4001

nDXQM – 98dot7 HOME RADIO DAVAO STATION MANAGER: RYAN C. RODRIGUEZ E-MAIL ADDRESS: [email protected] ADDRESS: 4D 3rd Floor, ATU Plaza, Duterte Street, Davao City CONTACT NOs.: (082) 222-2337/ 221-7537/ 0922-811-3996

nDXQS -98dot3 HOME RADIO GENERAL SANTOS STATION MANAGER: AILYM C. MATANGUIHAN E-MAIL ADDRESS: [email protected] ADDRESS: Ground Floor, Dimalanta Building, Pioneer Avenue, General Santos City CONTACT NOs.: (083) 301-2769/ 553-6137/ 0922-811-3998

nDYQN -89dot5 HOME RADIO ILOILO STATION MANAGER: MARIPAZ U. SONG E-MAIL ADDRESS: [email protected] ADDRESS: 3rd Floor, Eternal Plans Building,

Ortiz Street, Iloilo City CONTACT NOs.: (033) 337-2698/ 508-8102/ 0922-811-3995

nDWQA -92dot3 HOME RADIO LEGAZPI STATION MANAGER: CLETO PIO D. ABOGADO E-MAIL ADDRESS: homeradiolegazpi@ yahoo.com ADDRESS: 4th Floor, Fortune Building, Rizal St., Brgy. Pigcale, Legazpi City CONTACT NOs.: (052) 480-4858/ 820-6880/ 0922-811-3992

nDWQJ -95dot1 HOME RADIO NAGA STATION MANAGER: JUSTO MANUEL P. VILLANTE JR. EMAIL ADDRESS: [email protected] ADDRESS: Eternal Garden Compound, Balatas Road, Naga City CONTACT NOs.: (054) 473-3818/ 811-2951/ 0922-811-3993

Since 2005

OUTSIDE THE BOXJohn Mangun

BLOOMBERG VIEWWilliam Pesek

Thursday,February 5, 2015

[email protected]

Caring for those who look for love

We are to praise the Lord, for He is good and gracious; He heals the brokenhearted and sustains the lowly (Psalm 147:1-2, 3-4, 5-6). Jesus cured many who were sick and

drove out many demons; he want to nearby villages and preached in their synagogues (Mark 1:29-39).

God’s graciousnessPSALM 147 is a summons to the faithful ones and to the whole earth as well to praise God who cares for those who look to Him for love. “Hal-lelu” (praise) “jah” (the Lord). It is good and fitting to sing praises to God: he is so gracious. An example of God’s goodness is how He rebuilds Je-rusalem and gathers the dispersed of Israel, as if in answer to the petition of Psalm 51:18—“Do good to Zion in your good pleasure; rebuild the walls of Jerusalem.” It fulfills the promise in Jeremiah (33:11) that in Jerusa-lem shall indeed be heard the sound of thanksgiving to the Lord whose mercy endures forever, because “I will restore this country as of old, says the Lord.” More than just po-litical restoration, it means a second covenant, a second creation almost, for the chosen people turned sinful.

Not only to Israel but to all who suffer, God extends His mercy and compassion. Like a nurse caring for the wounded with tenderness, God

attends to the needs of those in dis-tress. “Bless the Lord, O my soul, and do not forget all his benefits—who forgives all your iniquity, who heals all your diseases” (Psalm 103:2-3). And to the brokenhearted who look to the stars for comfort and good luck, a reminder that it is the Lord who created them—“Lift up your eyes on high and see who has cre-ated these? He leads out their army and numbers them, calling them all by name. By his great might and the strength of his power not one of them is missing” (Isaiah 40:26). Worthy of praise, in addition to His power, is God’s wisdom and justice: He sustains in loving care the little ones, while the wicked are punished.

He cured the sick and drove out demonsJeSUS’S preaching of the kingdom of God was accompanied by his au-thority to drive away evil spirits. His disciples witnessed it happen in the synagogue, and coming from there

into the house of Simon and Andrew they told him of Simon’s mother-in-law downed by a fever. Their confi-dence that Jesus can banish what torments life was not disappointed: taking the woman by the hand, Je-sus lifted her up like raising her up to a life where there is healing, and she began to minister to them. Re-leased from the grip of death in sick-ness, she was restored to family and community where service to others brings fullness.

The word was out; Jesus has the power to restore life to whole-ness. At sunset when the Sabbath’s regulations no longer applied, the townsfolk brought their sick ones and demon-possessed relatives and friends to Jesus to be cured and liberated. Without ado, he healed them; he banished from the suffer-ing ones many demons and many diseases. Like before he command-ed the evil spirits to silence. Their knowledge of him was partial and incomplete, easily misconstrued and leading to false conclusions; their information about Jesus could never be for the good.

He prayed, and throughout the land preachedAS his fame spread, Jesus sought the so litude of a deserted place to pray and to remain focused and centered. He needed his prayerful commu-nion with God his Father; prolonged prayer and extended quiet from the jostling crowds strengthened him in clarity and direction and protected him from the many distractions.

But to his disciples the crowds were the measure of success; they wanted him to exploit his popularity. Already misunderstandings and apparent contradictions: what Jesus wanted different from what the crowds and also what the disciples wanted; who Jesus really is and who the demons would like him to be before the crowds.

The crowds were coming to Jesus for miracles, but Jesus wanted them to come to hear the message about the kingdom of God. He wanted fol-lowers, not fans. exorcisms and cures are signs of the new saving revela-tion of God, not for entertainment or self-reference only. In his radical identification with the Good News for all humankind Jesus knew he must move on, and not be fixated to any one location. There are many other people to whom the message must be brought.

Alálaong bagá, the Gospel must be preached both in word and deed. The long-awaited reign of God proclaimed by Jesus means the dislodgment of resident evil and the liberation of peo-ple from whatever enslaves them. In his power and wisdom Jesus heals the brokenhearted and sustains the poor. It is not in the stars but in God’s mercy and compassion that we who look for love experience His infinite gracious-ness. Hallelujah!

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

AlálAong BAgáMsgr. Sabino A. Vengco Jr.

44

IF not because of our 44 fallen heroes, I will not be interested to read the proposed Bangsamoro Basic Law (BBL). I found the need to answer my qualms in allowing our government to give even

one peso of the Filipino taxpayer’s money to this effort for peace despite the unforgiving brutality that our policemen suffered from the hands of the people who will be given the power to spend it.

A nation under siege

DECISIon TIMEAriel nepomuceno

By Lee SaundersCQ-Roll Call/TNS

MOST members of Con-gress today are million-aires. Their wealth has

increased 28 percent since 2007, while that of the average American fell 43 percent.

So when President Barack Obama told members of Congress during his State of the Union address to try living on $15,000 a year if they think it’s so easy, the lack of response was telling.

The smackdown was an uncom-fortable reminder of how far out of balance our economy is and how many of our elected officials are benefiting from a system rigged to favor only the wealthy and power-ful. It’s no wonder most lawmakers

sat stone-faced after the president’s remark, perhaps hoping Ameri-cans wouldn’t notice this economic anomaly.

But we have noticed and we’re outraged. We are tired of being told that if we just work harder, we can get ahead when we know that hard work has very little to do with achieving success in a system that is rigged. There’s no guarantee any-more that putting in more hours at work will result in a raise or a pro-motion. There’s no guarantee that getting a college degree will result in anything more than crushing student debt.

A recent Oxfam study found the world’s wealthiest 1 percent is on track to own more than the rest of the world combined. The report said the 80 richest people in the world

have more combined wealth than the 3.5 billion people at the bot-tom. This staggering disparity, the authors note, hits working people twice as hard. We have to make do with a tiny slice of the pie and, as the rich accumulate more, the pie itself gets smaller.

It hasn’t always been this way. There was a time in our not-so-distant past when poor Americans could work their way into the mid-dle class. There was a time when people in the middle class could af-ford to buy a home, send their kids to college and save for retirement. Today, middle-class families must make a choice–a home, college or retirement. They no longer can do all three.

This fast-disappearing upward mobility was made possible by the

American labor movement, which helped workers gain a fair share of the nation’s prosperity through collective bargaining and political activism. Unions were and continue to be the only organizations willing to stand up and fight for working people and the middle class. And it is unions that can get us out of the mess we’re in now.

While extremists in Congress refuse to raise the minimum wage, it is unions at the bargaining table who are hammering out contracts that raise wages for working peo-ple. As corporate lobbyists seek to eliminate regulations that protect workers, it’s the shop steward who fights for a safer workplace.

When anti-worker governors come up with another scheme to steal pensions, it is union

members who go door to door to warn the public.

The benefits to workers who form a union are concrete and undeniable. Unionized workers earn on average $207 more per week than their non-union counterparts, according to the latest data from the Bureau of Labor Statistics, and are more likely to have employer-sponsored health care and access to a guaranteed re-tirement plan.

At a time when so many Ameri-cans are feeling beat down by an economy rigged against them, the peace of mind that comes with a good union job is immeasurable. Unions provide better wages and benefits, job security, and a better standard of living.

Unions have the ability and the track record to rebuild the Ameri-

can middle class and help close the yawning divide between the rich and the rest of us.

Obama acknowledged as much in his State of the Union address, calling for new laws that make it easier for workers to join unions. No one should have to survive in our nation today earning only $15,000 a year.

The New York Times recently re-ported on a study that shows union workers are just plain happier, and no wonder. Not only do they earn more, but they’ve got a real voice at work. Unions are the agents of change that our nation so desper-ately needs.

Lee Saunders is president of the American Federation of State, County and Municipal Employees.

We built the middle class, and we can rebuild it

THe country mourns the brutal killing of the 44 brave commandos of the Special Action Force (SAF) of the Philippine National Police. Their death represents the

extreme cost for a lasting peace in Mindanao. And this incident has further worsened the many challenges that confront a nation that has been long under siege with countless economic, social and political problems.

We are still engaged in a pro-tracted war on poverty. At least 15 million Filipinos are believed to be experiencing extreme material de-privation. And the immediate fu-ture for them is uncertain. Around 6 million have no permanent and decent homes and are scattered in major metropolis particularly in the highly dense Metro Manila. Crimi-nality is high especially those that are related to illegal drugs. Traffic is turning worse. Infrastructure is improving but is still below what is necessary. The investment and busi-ness climate is good but the situation in our neighbors is better.

Political solution to an economic problemTHe political landscape must inspire competence and integrity amongst those in the bureaucracy and the private sector. We have witnessed the positive economic impact of the perception that the current admin-istration of President Benigno S. Aquino III is serious in ending or significantly curving corruption. Trust in our leaders and institutions has assisted in improving business and investments. The continuous and relentless inquiries on possible abuses or anomalies have pushed our bureaucrats on their toes. Not everyone will agree or support the manner these inquiries in Congress are being handled. But the net effect is concrete on the ground of public service.

Couple these with the no non-sense advocacies and efforts of Com-missioner Kim Henares of the Bureau of Internal Revenues who is seen to relentlessly collect what is due to the government. Plus the timely revela-tions of the Commission on Audit’s Grace Pulido-Tan on the document-ed lapses in spending government funds. equally waging their own difficult battles are Secretary Leila de Lima of the Justice Department and Conchita Carpio-Morales of the Office of the Ombudsman.

Many in the private sector be-grudge the demeanor and decisions of these iron ladies, but we have to acknowledge their direct and indi-rect contribution in building a more accountable and responsive culture in governance and private business.

The average six percent economic growth and the increase in Foreign Direct Investments are clear indica-tors of the economic dividend from a political investment primarily de-livered by Malacañang’s choice of feisty officials.

Economic solution to a political problemMUCH of our political and social problems are rooted in poverty and the lack of economic opportunities. Our economic and business leaders must urgently exhaust all remedies to ending our long years of economic hardships.

We must focus and further strengthen our assets—agriculture, tourism, and foreign employment. We have to squarely accept the reality that we have already been left behind in terms of heavy industrialization. But we still have all the chance to be ahead of the competition in the said fields.

Our agricultural sector is be-stowed with huge and rich farm-lands. We must manage these well. Our country has the natural jewels to regularly attract millions of tourists. We just have to focus on encouraging investments and infrastructures to provide the necessary facilities that will serve our international guests. We can organize, for example, a tour-ism Police Force within our National Police. They must specialize in pro-tecting and servicing the needs of the tourists in the places where they frequently visit. And lastly, we must further support our overseas foreign workers who remit at least $25 billion annually. We must ensure that their hard earned money is efficiently and safely sent to their love ones. We are obliged to consistently check if they are properly taken cared of in the countries that they stay.

Tears of sacrificeTHe extreme sacrifice of the SAF commandos must not be in vain. The heartbreaking tears of the families that they left behind must not fall on empty grounds. Our entire coun-try is besieged with many problems that plagued us for so many years. We must now stay the course to-wards slowly addressing our prob-lems. We owe it to them. We owe it to ourselves.

The Supreme Court once cited that during the height of the Mus-lim empire, early Muslim jurists tended to see the world through a simple dichotomy: there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode of War). The first referred to those lands where Islamic laws held sway, while the second denoted those lands where Muslims were persecuted or where Muslim laws were outlawed or ineffective. This way of viewing the world, however, became more complex through the centuries as the Islamic world became part of the international community of na-tions. (GR 183591).

The goal of the government in persisting to enact the BBL is to erase this dichotomy and to create lasting peace in Mindanao. In order to achieve this, the government is

offering fiscal autonomy, among others, with the end goal of making the Bangsamoro self-sufficient and not dependent to the National Gov-ernment to provide for the needs of its people. But every Filipino should know the extent of the tax and fis-cal autonomy that will be given to the Bangsamoro and ponder if they deserve it.

Under the BBL, the Bangsam-oro Government will have its own version of the Bureau of Internal Revenue and consequently its own Commissioner of Internal Revenue who will be in charge of its tax col-lections. Also, in terms of what it may tax—aside from those that were granted previously to Autono-mous Region in Muslim Mindanao (ARMM), the Bangsamoro Govern-ment can now collect capital gains tax, donor’s tax, estate tax and docu-

mentary stamp tax on transactions within its territory. On top of that, they get a 75 percent share of all the other taxes that will be imposed by the national government. These na-tional taxes include income taxes and value added tax.

Clearly, the role of the national government is now limited in assist-ing in the matter of tax administra-tion. The power of the Commissioner of Internal Revenue will be greatly diminished since his powers are gen-erally devolved to the Bangsamoro Government’s version of him. The Bangsamoro Parliament may enact its own tax laws and regulations that may be completely different from the rest of the Philippines.

There is also an Annual Block Grant (ABG) mechanism. This re-fers to the automatic appropriation that will be released regularly to the Bangsamoro Government. Imme-diately following the year the draft BBL takes effect, the amount of the ABG shall be equivalent around to 4-percent of the net national inter-nal revenue collection of the Bureau of Internal Revenue. This amounts to billions of pesos of government resources.

The Bangsamoro Government will receive additional funds for development projects and infra-structure projects in the first years of the Bangsamoro. A Special De-velopment Fund (SDF) will also be established for the rehabilitation of

the territories within the Bangsam-oro. The Bangsamoro Transition Authority will also be funded to enable it to organize the bureau-cracy, hire personnel and exercise its functions.

Based on the foregoing, the Bangsamoro will get funds from the National Government that will be culled out from every Filipino’s tax contribution. It will also have a lion’s share of the resources within its territory. The amount of funds that will be entrusted to its leaders will be enormous. These funds will give them power, lots of it.

Tax is the lifeblood of our na-tion. It is taken mostly from an ordinary working Filipino’s sweat and blood. The one who will be given the power to spend it must be worthy…trustworthy.

Atty. Irwin C. Nidea Jr. is a junior partner of Du-Baladad and Associates Law Offices (BDB Law), a member firm of World Tax Services (WTS) Alliance.

The article is for general information only and is not intended, nor should be construed as a substitute for tax, le-gal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal is-sue should be supported therefore by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at [email protected] or call 403-2001 local 330.

TAx lAw for BuSInESSAtty. Irwin C. nidea Jr.

We must focus and further strengthen our assets—agriculture, tourism, and foreign employment. We have to squarely accept the reality that we have already been left behind in terms of heavy industrialization. But we still have all the chance to be ahead of the competition in the said fields.

A8

2ndFront PageBusinessMirror

www.businessmirror.com.phThursday, February 5, 2015

Miners can contribute ₧52.7 billion in revenues to government annually

Toyota plans to aid Japan revival viasuppliers

PENTAGON LISTS CHINA, RUSSIA, MILITANTS AS U.S. THREATS

Metro Manila firms hadmore layoffs than quits

CHINA FORUM Stephen F. Austin State University Political Science professor Dr. Michael Tkacik talks during the Rising China: Specific Policy Options for the Philippines and the United States forum held at the Asian Institute of Management in Makati City. ALYSA SALEN

By Recto Mercene

Agovernment agency that was formed to promote transparency and accountability in the extractive

industry on tuesday reported that it has reconciled the mining sector’s revenue streams at P52.7 billion, a culmination of 18 months of data gathering from various government agencies.

By Cai U. Ordinario

More Filipinos working in Metro Ma-nila were laid off by their employers in the third quarter of 2014, accord-

ing to data released by the Philippine Statistics Authority (PSA). In the results of the Labor Turnover Survey in the third quarter, the PSA said the incidence of separations due to layoffs/terminations reached 7.04 percent. It was about twice the reported cases of separations due to resigna-tion or quits at 3.72 percent. The highest incidence of layoffs was recorded in the Services sector at 7.13 percent, followed by Industry at 6.83 percent. “The survey aims to capture ‘job creations’ and ‘job displacements’ in large business enterprises based in Metro Manila by collecting quarterly data on accessions and separations of workers,” the PSA explained. The PSA said layoffs, instead of quitting, were most apparent in the subsectors of construction, where layoffs reached 14.76 percent compared to quits in the sector at 2.28 percent. other sectors where there were more lay-offs than quits were wholesale and retail trade; repair of motor vehicles and motorcycles; and water supply. This was also observed in mining and quar-rying; manufacturing; administrative and sup-port service activities; arts, entertainment and recreation; and other service activities. The PSA said the rest of the subsectors re-ported higher quit rates than terminations. This

was most common in financial and insurance activities at 9.29 percent compared to layoffs at 0.77 percent. Data also showed that sectors that had higher quits than layoffs were accommodation and food service activities, and professional, scientific and technical activities. Meanwhile, more employers hired work-ers due to replacements than expanding their businesses. Data showed that 10.57 percent of workers were hired to replace other workers, while accession due to expansion of business activities was only at 2.54 percent. This was most notable in construction, where the accession rate due to replacements was at 23.76 percent; followed by wholesale and retail trade; repair of motor vehicles and motorcycles; and administrative and support service activities. Around 10 industry groups registered more hiring of workers due to business expansion than replacement of workers.

ToyoTa Motor Corp., which analysts estimate will earn more profit this fiscal

year than all the other Japanese carmakers combined, could be ready to spread the wealth. as Toyota raised its fiscal-year profit forecast to a record ¥2.13 trillion ($18.1 billion), the manufacturing giant said it may ease up on its usual practice of squeezing suppliers to lower prices of auto parts. The idea: leave some gains to companies lower down the supply chain so they have the resources to boost wages. “We are having discussions on price revisions right now and we are trying to escape from the deflationary environment in Japan,” Toyota Managing officer Takuo Sasaki told reporters on Wednesday in Tokyo. “We hope this will lead to a virtuous cycle for the Japanese economy.” If implemented, Toyota’s move would provide some of the momentum Prime Minister Shinzo abe needs to overcome Japan Inc.’s apathy toward wage increases and help asia’s second-largest economy out of two decades of deflation. It’ll also be payback for the stimulus and monetary easing that has weakened the yen and lined the pockets of exporters led by the auto industry. Even after lifting its annual profit forecast for the second time in as many quarters, Toyota’s projection is still short of the ¥2.16 trillion that analysts’ estimate the company will earn for the year ending in March. Japan’s seven other carmakers may report about ¥1.8 trillion in combined net income for the same period, according to data compiled by Bloomberg. Japan’s economy probably limped out of its fourth recession since 2008 last quarter, with a report on January 30 showing industrial production eking out a gain last December after a slide the previous month.

Rising costsFor Japanese consumers, rising living costs and an increase in the sales tax last april led to prices outpacing their first base wage gain in eight years in 2014. So while average earnings climbed 0.8 percent, pay adjusted for inflation fell 2.5 percent last year, the labor ministry said on Wednesday in Tokyo. This trend is putting pressure on Japanese companies to pass on some of the gains from a weaker yen by boosting domestic wages and investment. Toyota and its labor unions are entering spring negotiations that are set to conclude in March and establish pay and bonuses for the upcoming fiscal year. If Toyota abstains from demanding price cuts, its largest suppliers have said they would, in turn, skip asking for reductions from the smaller peers that provide them parts and raw materials, Managing officer Koki Konishi told reporters. “We understand we are at very important phase for the Japanese economy,” Konishi said. “We think it is important to have economic revitalization to penetrate second- and third-tier suppliers and for the whole Japanese economy to set a positive attitude.” Bloomberg News

ruSSIAn military activ-ity is at its highest level since the Cold War; de-

structive state-sponsored at-tacks on uS computer systems are on the rise; and Islamic State (IS) is expanding into unstable parts of north Africa, the Pen-tagon’s top intelligence official told Congress on Tuesday. The warnings came against the grim backdrop of the re-lease of a video that appeared to show a Jordanian military pilot being burned alive by his IS captors, and a day after Presi-dent Barack obama proposed reversing a five-year decline in military spending to help battle

the Sunni Muslim extremists who control parts of Iraq and Syria. Lt. Gen. Vincent Stewart, director of the Defense Intelli-gence Agency, said the militant group IS has steadily extended its reach despite near-daily uS-led coalition air strikes that be-gan in August. More than two dozen extremist groups around the world have merged with or pledged allegiance to IS, and its ranks continue to swell with new recruits. “With affiliates in Algeria, egypt, Libya, the group is be-ginning to assemble a growing

“The survey aims to capture ‘job creations’ and ‘job displacements’ in large business enterprises based in Metro Manila by collecting quarterly data on accessions and separations of workers,” the PSA explained.

Called the Philippine extractive Industries Transparency Initiative (PH-eITI), it reported that the un-reconciled amount was only P58.2 million, or less than 1 percent of the total revenue. This information, among many others, are contained in two books

that the agency launched at the Sofi-tel Hotel during a daylong affair. The books contained a report of its recon-ciliation of payments and collections from mining and other agencies us-ing declared figures from 2012. eITI is a global standard of trans-parency that requires extractive

industries to publish what they pay to the government. In return, the government publishes what they col-lect in a process called reconciliation. eITI’s aim is to promote trans-parency and accountability in the extractive industries, and publish a comprehensive report to shed light on how much the government earns from extractive industries, how much the industry actually pays the government and how the citizens benefit from the earnings of the extractive industries, according to Finance Assistant Secretary Ma. Teresa Habitan. Habitan said the two-volume report by the PH-eITI is the result of collabo-ration and pooling of resources and ideas from many sectors to promote transparency and good governance. “All that we have worked for is for the sake of the Filipino people to help us advance toward creating systems

of transparency and accountability, to help ensure that the people’s mon-ey goes to the aid and development of the people,” she said. Habitan said the PH-eITI objec-tive is to strengthen the business en-vironment and increase investments in the country, through transparency and accountability. “Countries that followed the eITI formula, such as nigeria, were able to recover $400 million of missing pay-ments, based on calculation of what has been paid to their government over a three-year period versus what they should have been paid,” she said. She said 25 percent of Indone-sia’s revenue comes from extractive industries, and it has expanded its coverage from 129 companies to 263 during its second year of reporting. The first PH-eITI report covers 52 companies, seven national agen-cies and 32 local government units.

This is comprised of 40 large-scale mining, 11 oil and gas and one coal-mining operation, collectively called companies. The national agencies include the Bureau of Internal revenue, Mines and Geosciences Bureau, Department of energy, Philippine Ports Author-ity, Bureau of Customs and national Commission of Indigenous Peoples. The local government units are lim-ited to the provinces and municipali-ties that host large-scale companies. In 2010 the country’s total metal-lic mineral reserves were assessed at 14.5 billion metric tons, while non-metallic reserves were estimated to be 67.66 billion metric tons. The country’s mineral reserves are estimated to reach $1.387 bil-lion, with gold, nickel and copper contributing 75 percent of the total value. Most of these reserves are lo-cated in Mindanao and Luzon.

See “Pentagon,” A2

BusinessMirror February 5, 2015

Documents

Transcript of BusinessMirror February 5, 2015